Iowa Down Payment Assistance
Those looking to buy real estate might consider Iowa, one of the best states for low mortgage debt and low housing costs! Potential home buyers might also find further help from local and national programs that exist to offer down payment assistance and grants to qualified applicants.
If you're thinking about purchasing a home in Iowa, you may have options to help with the down payment or closing costs. Click on any program below to learn more and see if it can help with your home purchase!
- Home$tart and Home$tart Plus Programs
- Military Homeownership Assistance Program
- FirstHome
- Waterloo Down Payment Assistance Program
- Dubuque First-Time Homebuyer Loan Program
- Cedar Rapids First Time Home Buyer Program
Home$tart and Home$tart Plus Programs
Both Home$tart and Home$tart Plus are offered by the Federal Home Loan Bank of Des Moines. Applicants can receive as much as $7,500 (for Home$tart) or as much as $15,000 (for Home$tart Plus). This can be used to help cover the down payment, closing costs, or rehabilitation.
Funds are awarded first-come, first-serve.
In order to be eligible, applicants must fall within specified total household income limits.
Applicants must also complete homebuyer education.
Military Homeownership Assistance Program
In honor of their service, Iowa offers the Military Homeownership Assistance Program to veterans and service members. Assistance is offered in the form of a $5,000 grant. This can be used to help with the costs of the down payment and closing.
In order to be eligible, an individual has to have served a minimum of 90 days in active duty, or be federally recognized as an injured service person, or be a surviving spouse of an eligible service person with any discharge other than dishonorable.
All applicants must receive approval for the property. Properties must be in Iowa, occupied within 60 days of closing, be a single family residence, condominium, or townhouse, or a property containing up to 4 units.
Through the Iowa Finance Authority, eligible applicants can receive down payment assistance in the form of either a grant or a loan (but not both). Those who receive the grant can access $2,500 to help pay for the down payment or closing. Those who receive the loan can access as much as 5% of the purchase price of the house, but no more than $5,000. This loan does not have any required monthly payments, but must be paid back when the property is sold, refinanced, or when the first mortgage is paid off.
Applicants must meet certain household income limits, which depend on county and household size. The maximum purchase price allowed is $283,000, or $346,000 in specified target areas.
In order to access the FirstHome program, an applicant must be either a first time homebuyer (not have owned a house in the previous three years), a military member with a discharge other than dishonorable (can’t have used a mortgage revenue bond program previously), or be purchasing a house in a specified target area.
Within sixty days of closing, the applicant must be using the property as their primary residence.
The minimum allowed credit score is 640 and the maximum allowed debt-to-income ratio is 45%. In the event where a borrower does not have a credit history, non-traditional credit documentation may be allowed.
Waterloo Down Payment Assistance Program
Residents of Waterloo may be eligible for the Waterloo Down Payment Assistance Program, which offers a forgivable second mortgage to help covers costs associated with the down payment. In the event that the applicant sells their home in within 5 years, the loan amount must be paid back.
Applicants must be residents of Waterloo for at least a year, be first-time homebuyers, and have a total household annual income less than 80% of the area median income. Homebuyer education is required. Ideally, borrowers should be able to pay for the closing costs using their own funds.
Applicants must fall within specified income limits. These limits apply to all members of the household who are at least 18, regardless of whether or not they are on the mortgage.
Dubuque First-Time Homebuyer Loan Program
Available in the city of Dubuque, as much as $5,000 (or $25,000 for those with an annual household income not more than 30% of the area median income) is offered as closing cost and down payment assistance. This is a long-term loan with 0% interest. Those who receive a $5,000 loan repay it over the course of the next 8 years, and those who receive a $25,000 loan can defer payment for 5 years, and then pay $60 per month for a term of 35 years.
Applicants are required to put down a minimum of 3% of the purchase price of the house as the down payment. At least 1% of this must come from the borrower’s own funds, but the remaining 2% can be gifted.
The properties purchased using this program must be an owner-occupied, single-family or duplex home. Properties must be inspected prior to approval.
Cedar Rapids First Time Home Buyer Program
This program was temporarily suspended in March 2020 due to the COVID-19 pandemic. As of this writing, there is no announcement of when the program will resume.
Access to the Cedar Rapids First Time Home Buyer Program down payment assistance is available first-come, first serve. Applications are examined in the order that they are received.
Between $1,000 and $14,999 is offered in down payment and closing cost assistance. This is a forgivable loan with a five-year term. Individuals who have owned a house in the prior three years, who have non-occupying coborrowers or cosigners, or who have an ARM with a fixed term for less than 10 years are not eligible.
The first time homebuyer requirement can be disregarded in the event that the applicant is a displaced homemaker following a divorce or a single parent following a divorce.
Applicants must fall within certain DTI and housing income limits in order to qualify. Applicants must also have no less than $1,000 and no more than $25,000 in non-retirement assets. In the event that an applicant has more than $25,000 in assets, the amount above the limit must be used for the down payment. The amount of assets will determine how much the borrower must put towards the down payment. This amount will be between $500 and $3,000.
In order for a property to be eligible, it must be in the city of Cedar Rapids, not in the 100-year flood plain, not be a current rental property, and cannot have a sales price higher than $164,000 as of 2020. Mobile homes are not allowed, but single-family and condo units are. All houses will be inspected by City staff.