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First-Time Homebuyers in Iowa: Resources, Programs, & More

Make Your First Home a Reality

Buying your first home is exciting, but it can also feel overwhelming. At FSB, we help First-Time Homebuyers in Iowa navigate the process with confidence. From exclusive mortgage programs to grants that reduce your upfront costs, our local team is here to guide you every step of the way.1

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Get up to $350 off closing costs* on your FSB mortgage. Don’t miss this exclusive opportunity to save on your first home. See how ->

Programs & Grants for First-Time Iowa Homebuyers

Use the dropdown menu to explore first-time homebuyer programs & grants designed to help reduce upfront costs & make homeownership more affordable.

Mortgage Rate Relief Program

This exclusive loan program3 from the Federal Home Loan Bank is designed to make homeownership more affordable for eligible buyers, with rates as low as 5.125% APR.2

  • Income-based eligibility for households earning less than 80% of the area’s median income4
  • Available for the purchase of a primary residence only
  • Can be combined with the FHLB Des Moines Home$tart grant for additional savings

Ready to See if You Qualify?

Take the next step! Connect with a lender or review income requirements to get started.

Contact a Lender See Income Requirements

1Must be 18 or older to apply. All loans are subject to credit approval.
2Rate is subject to change without notice. Contact FSB’s mortgage department for the most current rate. Loan term of 241-360 months/more than 20 years up to 30 years. The loan must be for a primary residence. Effective March 3, 2025, the program runs until funds are exhausted.
3Must be 18 or older to apply. All loans are subject to credit approval. The credit score must be 680 or higher. Must be an active FSB customer. Limited funds are available.
4Median income is determined by the Federal Housing Finance Agency (FHFA) and varies by county.

FHLB Home$tart Grant

The Home$tart Program offers up to $15,000† in down payment assistance to qualifying homebuyers earning up to 80% of the median income for their area, based on Iowa HUD Income Limits adjusted for household size.

Additional Eligibility Requirements:
  • Have not owned a home in the past three years
  • Completion of a homebuyer education class
  • Qualification for a mortgage loan with FSB1
  • Becoming an FSB Customer

Ready to Start the Mortgage Process?

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

1Must be 18 or older to apply. All loans are subject to credit approval.
†Actual 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.

IFA Grants

The Iowa Finance Authority offers two programs designed to assist homebuyers with down payment and closing costs when used alongside the FirstHome or Homes for Iowans mortgage programs.

FirstHome Plus Program

The FirstHome Plus Program is available to eligible first-time homebuyers who are purchasing a primary residence in Iowa.

Homes For Iowans Plus Program

Available to both first-time and repeat homebuyers, the Homes for Iowans Program supports the purchase of a primary residence in Iowa.

Ready to Take the Next Step?

Apply online1 today or contact a lender to see how you can benefit from these programs.

1Must be 18 or older to apply. All loans are subject to credit approval.
For more information on eligibility and program details, visit the Iowa Finance Authority's website.

Military Down Payment & Closing Cost Assistance

The Military Homeownership Assistance Program is available annually to support service members, veterans, and their families for down payment and closing costs on a qualifying home purchase.

Eligibility Requirements
  • Have served 90 days active duty between August 2, 1990 and April 6, 1991 or September 11, 2001 to present. Active duty needs not be consecutive; it may be cumulative; or
  • Is a federal status injured service person having served in active duty between August 2, 1990 and April 6, 1991 or September 11, 2001 to present; or
  • Is a surviving spouse of said eligible service person, all who have had a discharge other than dishonorable

Please contact FSB's Mortgage Department directly to check if funds are currently available for this year.

Ready to Get Started?

Start your application online1 today or contact a lender for more information on how this program could help you.

1Must be 18 or older to apply. All loans are subject to credit approval.
For detailed program guidelines and additional information, please visit the IFA website.

Cedar Rapids Down Payment & Closing Cost Assistance

The City of Cedar Rapids offers the First-Time Homebuyer (FTHB) Program, providing forgivable loans to assist with down payment costs for eligible households.

Eligible Homeowners Will Meet the Following Requirements:
  • Be a first-time homebuyer
  • Be income eligible — including income, assets, and debt ratio calculations
  • Secure acceptable mortgage financing & purchase an eligible property
Eligible Properties Will Meet the Following Requirements:
  • Homes must be within the City of Cedar Rapids limits (Outside the 100-year flood plain)
  • Homes must be owner-occupied or vacant (Rental property & mobile homes are not eligible)
  • Homes will be inspected by City staff and must comply with Housing Quality Standards (based on health and safety requirements)

Ready to Become a Homeowner in Cedar Rapids?

Apply online1 today or contact a lender for more information on potential grant eligibility.

1Must be 18 or older to apply. All loans are subject to credit approval.
For more detailed guidelines and to see if you qualify, please visit the City of Cedar Rapids website.

Prepare to Buy Your First Iowa Home

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.

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.

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 Mortgage Rate Relief Program2, designed to make homeownership more affordable for eligible buyers, offering a fixed 5.375%3 mortgage rate for those who qualify.

  • The FHLB Home$tart Grant Program, providing up to $15,000† 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

†Actual 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(Opens in a new Window) or the FHLB Des Moines website.
1Must be 18 or older to apply. All loans are subject to credit approval.
2Must be 18 or older to apply. All loans are subject to credit approval. Credit score must be 680 or higher. Income-based eligibility for households earning less than 80% of the area’s median income. Must be an active FSB customer. Limited funds are available. 
3Rate is subject to change without notice. Contact FSB’s mortgage department for the most current rate. Loan term of 241-360 months/more than 20 years up to 30 years. Loan must be for a primary residence. Effective March 3, 2025; program runs until funds are exhausted. 

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.

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.



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 ->

Buy Your First Iowa Home with FSB

Apply1 online to get preapproved or connect with the FSB Mortgage Team for personalized guidance!

Apply Online Contact a Lender

Mortgage Calculators for First-Time Iowa Homebuyers

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

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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.
*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.