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First-Time Homebuyer Programs and Grants in Iowa

Up to $15,000 in Down Payment Assistance & More

Iowa first-time home buyers can access grants up to $15,0002 in down payment assistance, low down payment loan programs, and free preapprovals1 through FSB. Whether you qualify for the FHLB Home$tart grant, FirstHome Plus, Homes for Iowans, or Cedar Rapids city programs, our local mortgage team walks you through every step.

Start My Application

Programs & Grants for First-Time Iowa Homebuyers

Explore first-time homebuyer programs designed to help reduce upfront costs and make homeownership more affordable.

Limited-Fund Grant

FHLB Home$tart

Up to $15,0002

A down payment assistance grant for qualifying homebuyers earning up to 80% of the area median income, based on Iowa HUD Income Limits adjusted for household size.

Who Qualifies

  • Have not owned a home in the past three years
  • Completion of a homebuyer education class
  • Qualification for a mortgage loan with FSB1
  • Become an FSB customer
Limited-time funds: 2026 funds are currently available.

Contact our Mortgage Department for more information and to check availability.

Reduced Rate

FHLB Mortgage Rate Relief

Program Rate: 4.875% APR2

An exclusive Federal Home Loan Bank program that offers below-market mortgage rates to help make monthly payments more affordable for eligible buyers.

Who Qualifies

  • Household income less than 80% of the area's median income4
  • Primary residence purchase only
  • Credit score of 680 or higher
  • Become an FSB customer
Stack your savings: Combine this with the FHLB Home$tart grant for additional down payment assistance.

Contact our Mortgage Department for more information and to check availability.

Financial Assistance

IFA FirstHome Plus

Down Payment + Closing Costs

An Iowa Finance Authority program that helps eligible first-time homebuyers cover down payment and closing costs when paired with the FirstHome mortgage program.

Who Qualifies

  • First-time homebuyers only
  • Purchasing a primary residence in Iowa
  • Must use alongside the IFA FirstHome mortgage

Contact our Mortgage Department for more information and to check availability.

Financial Assistance

Homes for Iowans

Down Payment + Closing Costs

Similar to FirstHome Plus, but available to both first-time and repeat buyers. Covers down payment and closing costs when paired with the Homes for Iowans mortgage program.

Who Qualifies

  • First-time and repeat homebuyers
  • Purchasing a primary residence in Iowa
  • Must use alongside the IFA Homes for Iowans mortgage

Contact our Mortgage Department for more information and to check availability.

Financial Assistance

Military Homeownership Assistance

Down Payment + Closing Costs

An annual Iowa program that provides down payment and closing cost assistance to service members, veterans, and eligible surviving spouses.

Who Qualifies

  • 90+ days active duty (Aug 1990 to Apr 1991 or Sep 2001 to present)
  • Federal status injured service persons from qualifying periods
  • Surviving spouses with other-than-dishonorable discharge status

Funds are limited annually. Contact our Mortgage Department to check availability.

Forgivable Loan

Cedar Rapids First-Time Homebuyer

Forgivable Down Payment Loan

The City of Cedar Rapids provides forgivable loans to first-time homebuyers to assist with down payment costs on qualifying properties within city limits.

Who Qualifies

  • First-time homebuyers within Cedar Rapids city limits
  • Income eligible (includes income, assets, and debt ratio)
  • Property must be owner-occupied, outside the 100-year flood plain
  • Property must pass City Housing Quality Standards inspection

Contact our Mortgage Department to check availability.

Ready to Start the Mortgage Process?

Apply online1 or contact a lender for guidance on program availability and eligibility.

First-Time Homebuyers Love FSB

These homebuyers partnered with FSB to make it happen. You can too. Just apply online to get started!1

Current Mortgage Rates

For information about USDA and FHA rates, contact FSB's Mortgage Department at 319-730-6990 or submit a secure form.

15-Year‡
5.500%
Interest Rate†
30-Year‡
6.000%
Interest Rate†
VA Loans
6.125%
Interest Rate†

Getting Started with an FSB Mortgage in Iowa

1

Start Your Application1

Apply online or submit a quick form, and we'll be in touch to guide you through the process.

2

Get Preapproved

We’ll review your credit, income, and finances to determine how much home you can afford.

3

Shop for Homes

With your preapproval in hand, you’re ready to work with a realtor and make serious offers.

First-Time Home Buyer Loans in Iowa

FSB offers multiple first-time homebuyer loan options in Iowa, including FHA loans with as little as 3.5% down, VA loans with no down payment, and conventional loans starting at 3% down. Each loan can be paired with the grant programs above to further reduce your out-of-pocket costs.

Compare All Loan Options ->

Ready to Buy Your First Home in Iowa?

Use this simple checklist to guide you through the process and feel confident about your next steps.

  • Are You Financially Ready?
  • Check Your Debt‑to‑Income
  • Plan Your Down Payment
  • Boost Your Credit Score
  • Determine What You Can Afford
  • Preparing Your Documents
  • Get Preapproved

Are You Financially Ready?

Buying a home is a big decision. Ask yourself:

  • Do you have a steady income?

  • Have you been consistent in paying bills and rent on time?

  • Can you afford the upfront costs of buying a house, such as the down payment and closing costs, without depleting your savings?

  • Would you be comfortable paying a monthly mortgage payment?

Answering these questions before searching for a home can help you prepare for the next step!

Check Your Debt‑to‑Income

Another key factor to consider is your debt-to-income (DTI) ratio. Lenders usually like this to be under 43%.

This ratio calculates how much of your monthly income goes towards paying debts.

For example, say you make $5,000 a month in gross income, and your debts take up $2,000; your DTI ratio would be 40% ($2,000 ÷ $5,000).

If your DTI is too high, consider paying down debt and avoiding new credit before applying.

Plan Your Down Payment

Ideally, 20% down. A 20% down payment helps you avoid private mortgage insurance (PMI), which keeps your monthly payment lower.

If putting a 20% down payment on a home is not feasible, there are loan programs that allow you to put down as little as 3%.

Remember, closing costs, moving expenses, and repairs all take cash too. Make sure your budget covers more than the sticker price.

Not sure what’s right for you? Submit a quick form and an FSB lender will follow up with you directly.

Boost Your Credit Score

Your credit score matters because it shows lenders how you make payments, manage credit, and handle debt. Most lenders require a minimum credit score of 580.

Here are a Few Strategies to Boost Your Credit Score:

  1. Make small purchases with your credit card while keeping usage at 30% or less of the credit limit

  2. Ask for a higher credit limit to lower overall utilization

  3. Don’t close your old credit cards; just don’t use them anymore

  4. Pay your bills on time and let any balance hit the statement first

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

Determine What You Can Afford

Determining how much home you can afford isn't only about the list price—it includes monthly costs, such as:

  • Principal & interest

  • Property taxes

  • Homeowner insurance

  • PMI (if your down payment was less than 20%)

Banks look at your debt-to-income ratio, ensuring any new monthly payment fits within the 43% DTI guideline.

Calculate Your Monthly Payment ->

Preparing Your Documents

To keep your mortgage application1 moving smoothly, gather these essential documents ahead of time:

✅ Bank Statements

  • Submit your two most recent statements from all checking and savings accounts.

✅ Proof of Income

  • Include recent pay stubs, Social Security, pension, or any other income verification.

✅ Tax Returns

  • Provide your last two years of federal tax returns along with your W2 or 1099 forms.

Having everything ready up front can help avoid delays and speed up the approval process.

Get Preapproved

Getting preapproved tells you how much you can afford and shows sellers you're serious. Fill out an application online in minutes—your local FSB mortgage team will review it with you.

Start Your Application ->

Must be 18 or older to apply. Loans subject to credit approval.

FAQs: First-Time Homebuyers in Iowa

Find answers to the most common questions from first-time homebuyers in Iowa.

In Iowa, a first-time homebuyer is an individual who has not owned a primary residence in the past three years. This can also include buyers who previously owned a home but have not paid mortgage interest during that time. Many programs have income limits, so contact an FSB lender to determine which options you qualify for.

FSB offers access to various grant programs1 for First-Time Homebuyers in Iowa, including:

  • The FHLB Home$tart Grant Program, providing up to $15,0002 for down payment assistance.

  • The IFA FirstHome Plus Program, designed to help with down payment and closing costs for primary residents in Iowa.

  • The Military Homeownership Assistance Program for veterans, service members, and their families

  • The City of Cedar Rapids Assistance Program, providing forgivable loans to assist with down payment costs for eligible households in Cedar Rapids.

Explore Your Options

Discover programs that can help with the cost of buying a home or contact a lender for personalized guidance.

Explore Mortgage Grants Contact FSB's Mortgage Team

1Must be 18 or older to apply. All loans are subject to credit approval.
2Actual amount depends on need as determined impart by program guidelines. This is a Federal Home Loan Bank (FHLB) grant. Funds can be used towards down payment and closing costs. Income limits are adjusted based on household size. For specific grant availability and detailed information on eligibility, visit FHLB Home$tart grant website or the FHLB Des Moines website.

FSB offers several loan types for first-time home buyers in Iowa.

  • Conventional fixed-rate mortgages offer terms up to 30 years for buyers with solid credit

  • FHA loans allow down payments as low as 3.5% and have flexible credit requirements

  • VA loans require zero down payment for eligible veterans and active military

  • USDA loans offer 100% financing for eligible rural properties

  • IFA mortgage programs are designed specifically for Iowa residents

Each loan type can be paired with available grant programs to reduce your upfront costs. Visit our mortgage loan options page or contact a lender to find the right fit.

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.

To get preapproved for a mortgage, you'll need:

  • Last two pay stubs with year-to-date income

  • W-2 forms & possibly tax returns from the previous two years

  • Two months of bank statements (all pages & assets)

  • Other income & loan documentation showing the amount and source

Determining how much you can afford comes down to comparing income to housing costs:

  • Lenders consider home expenses like principal, interest, taxes, private mortgage insurance (PMI) + HOA (Homeowners Association) dues, if applicable

  • Lenders won't consider personal bills like utilities, phone, etc.

Generally, aim to keep housing costs below 36% of your gross income.

Get a Head Start!

Contact a Mortgage Lender

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.

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

  • Flood certifications

  • Title work

  • Potential inspections

  • Pre-paid homeowner's insurance (1-year)

  • Reserve account (escrow) for taxes and insurance

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

Your required down payment depends on the loan type.

  • FHA loans require as little as 3.5% down

  • Conventional loans start at 3% down

  • VA loans offer zero down payment for eligible veterans

  • USDA loans offer zero down for eligible rural properties

A 20% down payment helps you avoid private mortgage insurance (PMI), which keeps your monthly payment lower. Iowa first-time buyers may also qualify for grant programs that cover part or all of the down payment. An FSB lender can review your situation and help you find the lowest out-of-pocket option.


Curious If You're Eligible For Any Programs?

Contact FSB's Mortgage department at 319-730-6990 or fill out the form below. Let us help you maximize your grant eligibility and lower your upfront costs.

 

Mortgage Calculators for First-Time Iowa Homebuyers

Estimate costs, plan your budget, and more with these helpful tools.

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or Buy?

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How Long Will it Take to Payoff Your Mortgage?
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What is Your Payment with an Adjustable Mortgage?
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Mortgage Help When You Need It

Buying a home doesn’t have to break the bank. Discover grants and assistance options available to you.

Explore Mortgage Grant Options

First-Time Homebuyer Disclosures
1Must be 18 or older to apply. All loans are subject to credit approval.
2Actual amount depends on need as determined impart by program guidelines. This is a Federal Home Loan Bank (FHLB) grant. Funds can be used towards down payment and closing costs. Income limits are adjusted based on household size. For specific grant availability and detailed information on eligibility, visit FHLB Home$tart grant website or the FHLB Des Moines website.
†All rates are subject to change without notice. Actual rate may be higher based on credit history, occupancy, LTV and loan type. The rates provided assume the purpose of the loan is to purchase a single family residence that will be used as a primary residence. FSB is not responsible for typographical errors or omissions.
‡As little as 3% down payment to purchase a home, with a loan amount of $125,000 or less and a credit score over 740.  Contact a mortgage lender to see if you qualify for the HomeReady loan program.
*Seminar attendees will receive up to a $350 credit towards their closing costs, with a minimum loan amount of $140,000 on an FSB mortgage loan, if closed by 12/08/2025. The loan must be for the purchase of a primary residence. One credit, valued at up to $350, allowed per household.