Buying your first home is exciting, but many people hesitate because they think they don’t have enough saved. In Iowa, there are two special programs that can help first-time buyers get into a home with far less cash up front.
Who counts as a first-time home-buyer? In real estate, anyone who hasn’t owned a home in the last three years is considered a first-time home-buyer. So even if you’ve owned before, you might qualify again.
What programs are available? Iowa has created options to make buying a home more realistic for people with limited savings. The Iowa Finance Authority (IFA) offers two main assistance programs:
1. Down payment assistance loan. This program gives you a second loan worth 5% of your home’s purchase price. That usually covers almost all of your down payment. If the seller pays your closing costs, you could buy a home with only $1,000 to $2,000 out of pocket. The loan is repaid when you sell, but it doesn’t accrue interest while you own the home.
“Get into a home sooner without waiting years to save for a large down payment.“
2. Closing cost grant. If you’d rather get help with closing costs, this grant gives you $2,500 upfront to cover those expenses. It’s not repaid, making it a straightforward way to lower your entry costs.
Who qualifies for these programs? These requirements are designed to help buyers who need the help most, while still making the process straightforward:
● A credit score of 640 or higher is preferred.
● Income limits apply; about $99,000 for a single person, and up to $173,000 for larger households.
●The purchase price must generally be under $665,000, though some programs cap closer to the mid-$500,000s depending on the location.
Why use these programs? The biggest advantage is getting into a home sooner without waiting years to save for a large down payment. Many buyers close with only a small amount, sometimes just $1,000.
If you’re dreaming of owning a home but worried about the upfront costs, Iowa’s first-time buyer programs could be your best opportunity.
If you have any questions, reach out to me at (515) 681-5677 or send an email to timothyschutteteam@solddesmoines.com, and let’s see if you qualify.