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Iowa First-Time Homebuyer Programs

Secure Your First Home with FSB!

 
First-Time Homebuyer Grants

Making Homebuying More Affordable For First-Time Homebuyers

Buying your first home can be a stressful process. What makes you a first-time homebuyer? If you haven’t owned a home in the last three years, you are considered a first-time homebuyer, and several loan programs are available to those who qualify. We can help put you in a home sooner than you might think!

Apply Online

Must be 18 or older to apply. All loans are subject to credit approval.

Low Down Payment Loan Programs

Federal Housing Administration (FHA) Loans

FHA Mortgage Loan Option

  • Flexible qualification guidelines including lower credit scores and higher debt-to-income ratios
  • Low down payment as low as 3.5%
  • 100% gift funds acceptable for down payment and closing costs

Veteran Affairs (VA) Loans

VA Mortgage Loan Option

  • Available to eligible service members and veterans
  • No private mortgage insurance requirements
  • Less than perfect credit can apply

US Department of Agriculture (USDA) Loans

USDA Mortgage Loan Option

  • Available to eligible homebuyers in USDA-defined rural areas
  • 100% financing option available
  • Flexible credit guidelines for less than perfect credit
  • Great rates and terms better than FHA or conventional loans

Iowa Finance Authority (IFA) Loans

IFA Mortgage Loan Option

  • Available to all eligible Iowa homebuyers
  • Fixed-rate 30-year financing
  • 3% down payment can be gift funds
  • Lower or no private mortgage insurance options

Apply for an Iowa First-Time Homebuyer Loan

FSB offers various mortgage loan programs tailored for first-time homebuyers in Iowa. Take advantage of our low down payment options and find the perfect loan for your needs.

Apply Online Contact a Lender

First-Time Homebuyer Grants

FHLB Home$tart Grant

FHLB Home$tart Grant

  • Available to homebuyers earning up to 80% of the median income
  • Provides funds to help with home purchases
  • Can also be used for down payment and closing costs

Iowa Finance Authority (IFA) Grant

Iowa Finance Authority (IFA) Grant

  • Supports both first-time and repeat homebuyers purchasing a primary residence in Iowa
  • Income restrictions apply
  • Includes down payment and closing cost assistance

Military Homeownership Assistance Program

Military Homeownership Assistance Program

  • Available to eligible service members and veterans
  • Offers grants for down payment and closing costs
  • No repayment required if eligibility is met

Cedar Rapids Down Payment Assistance Program

Cedar Rapids Down Payment Assistance Program

  • For first-time homebuyers purchasing within Cedar Rapids
  • Forgivable loan to assist with down payment & closing costs
  • Must meet specific income and property eligibility criteria

Check Your Eligibility

Ready to take advantage of these grant opportunities? Contact an FSB lender today to see if what mortgage grants you may qualify for.

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Need Personalized Guidance?

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Qualify for a Discounted Mortgage Rate

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FAQs for First-Time Homebuyers in Iowa

What Are the First-Time Homebuyer Requirements in Iowa?

Individuals who haven't owned a home in the past three years are considered a first-time homebuyer.

Why is My Credit History Important for Buying a Home?

Credit history is important because it shows lenders how you make payments, manage credit, and handle debt.

Timely monthly payments, responsible credit management, and a clean history free of missed payments or bankruptcies signal to lenders that you're a trustworthy borrower.

However, if your credit has a few blemishes, there are loan programs available for borrowers with less-than-perfect credit.

How Can I Improve My Credit Score Before Applying for a Mortgage?

Improving your credit score can significantly reduce interest costs on your home loan. Here's how you can improve it:

  • Make small purchases with your credit card while keeping usage at 30% or less of the credit limit
  • Ask for a higher credit limit to lower overall utilization
  • Don't close your old credit cards, just don’t use them anymore
  • Pay your bills on time and let any balance hit the statement first

Be patient; some credit blemishes can only be repaired with time.

What Do I Need to Get Pre-Approved?

To get pre-approved for a mortgage, you'll need:

  • Last two pay stubs with year-to-date income
  • W-2 forms & possible tax returns from the previous two years
  • Two months of bank statements (all pages & assets)
  • Other income & loan documentation showing amount and source

Contact a Mortgage Lender for assistance!

What is Private Mortgage Insurance (PMI)?

Private Mortgage Insurance (PMI), is an additional insurance policy included in a monthly mortgage payment if the down payment is less than 20% of the home's purchase price.

It is an added protection for the lender, not for the buyer. This premium is based on the risk of the loan. The riskier the loan, the higher the premium.

What is Earnest Money, and How Does it Work?

Earnest money is a good faith deposit when buying a home. It shows the seller that the buyer is serious about purchasing and the funds go toward the down payment at closing.

Typically ranging from $500 to $1000, it helps secure the property while inspections and financing are secured. If the deal falls through due to unforeseen issues like unfavorable inspections or loan denial, then the earnest money is returned to the buyer.

However, backing out of the purchase because you’ve changed your mind or find a house you like better means forfeiting the money.

What is Included in My Closing Costs? 

Beyond the down payment and purchase price, closing costs cover additional fees for securing the new home. Expect to pay for:

  • Loan processing fees
  • Home Appraisal
  • Credit report fees
  • Title work
  • Potential inspections
  • Pre-paid homeowner's insurance (1-year)
  • Reserve account (escrow) for taxes

While it might seem overwhelming initially, remember your lender is there to guide you through every step before you submit an offer.

What is an Escrow Account?

Think of an escrow account as a savings account for the home. Included in your monthly payment each month are 1/12 of your homeowner’s insurance cost and 1/12 of your annual tax premium.

This portion of your payment is held in your escrow account so that when the tax bill comes due and the insurance comes due, these bills are paid in full from this escrow account.

Still Have Questions?

FSB's lenders are here to help! Reach out for personalized guidance and answers to all your homeownership questions.

Get Personalized Assistance

 

Take Your Money to the Next Level

New checking account customers can earn a $250 cash bonus5 by opening an eligible checking account with direct deposit. Plus, enjoy up to $350 off closing costs5 with an FSB Mortgage.

Offer Details

5Qualifications and restrictions apply - click button for full disclosure.

Exciting updates to FSB's website are just around the corner! Stay tuned for more details.

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