Find Your Path to Homeownership
Buying a home in Cedar Rapids, Marion, Iowa City, or nearby communities? FHA loans1 are designed to help more families achieve homeownership with flexible guidelines and down payments as low as 3.5%.
What Is an FHA Loan?
An FHA loan is a government-insured mortgage that makes homeownership more accessible with a low down payment and flexible credit and income guidelines.
These loans also provide fixed-rate stability and allow gift funds or seller credits to cover costs. While first-time buyers often use them, anyone who qualifies can apply.1
Key Benefits of FHA Loans
Explore the main advantages that make FHA loans a popular option for Eastern Iowa homebuyers.
Low Down Payment
Buy a home with as little as 3.5% down if you meet credit requirements.
Flexible Credit Guidelines
FHA loans allow more flexibility for buyers with limited or past credit challenges.
Fixed-Rate Stability
Choose 30-year or 15-year fixed-rate terms for predictable monthly payments.
Gift Funds Allowed
Family members can contribute toward your down payment and closing costs.
Seller Credits
Sellers can help cover your closing costs, lowering your out-of-pocket expenses.
Refinance Options
FHA Streamline refinancing makes it easier for current FHA borrowers to reduce their rate.
FHA Loan Requirements
Qualifying for an FHA loan is often easier than a conventional mortgage, but there are still guidelines you’ll need to meet. To qualify for an FHA loan in Eastern Iowa, you’ll need:
- Minimum credit score of 580 for 3.5% down
- Two years of employment or proof of income
- Debt-to-income (DTI) ratio under 43%
- Primary residence only
- FHA appraisal and property standards met
- Mortgage insurance premiums (MIP) required
FHA Loan Process in 3 Steps
Getting started with an FHA loan is simple. Follow these three steps to move closer to homeownership.
- Apply Online in Minutes
- Choose Your FHA Loan
- Receive Your Funds
Local FHA Loan Expertise
FSB has served Eastern Iowa families for more than 95 years. Our mortgage team lives and works in the same communities you do. We’re here to make financing straightforward, answer your questions, and help you buy with confidence.
Frequently Asked Questions: FHA Loans
Find answers to the most common questions from homebuyers in Iowa about FHA Loans.
Who can qualify for an FHA loan?
FHA loans are open to a wide range of buyers. You’ll need a valid Social Security number, steady employment or income, and a credit score of at least 580 to qualify with a 3.5% down payment. Borrowers with scores between 500 and 579 may still qualify with 10% down. The home must be your primary residence, and you’ll need verifiable income and acceptable debt-to-income ratios.
What is the downside to an FHA loan?
The biggest trade-off is mortgage insurance. FHA loans require an upfront Mortgage Insurance Premium (MIP) plus annual premiums built into your monthly payment. This adds to the overall cost compared to some conventional loans. FHA loans also have stricter property standards, which means the home must pass an FHA appraisal before approval.
How do you qualify for an FHA loan in Iowa?
To qualify in Iowa, you’ll need a minimum credit score of 580 for a 3.5% down payment or 500–579 with 10% down. Verifiable income, recent tax returns, and bank statements are required to show repayment ability. The home must be your primary residence and meet FHA appraisal standards. Working with a local lender like FSB helps ensure you understand both the federal guidelines and Iowa-specific assistance programs.
How much down payment is needed for FHA?
The standard down payment for an FHA loan is 3.5% of the purchase price if your credit score is 580 or higher. If your score is between 500 and 579, a 10% down payment is required. Gift funds from family members or approved assistance programs may be used to cover all or part of the down payment.
Is there down payment assistance for FHA loans?
Yes, FHA loan borrowers may qualify for several down payment assistance programs offered through FSB. These programs can be used alongside an FHA loan, helping reduce upfront costs:
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FHLB Home$tart Grant Program – up to $15,000† for eligible buyers.
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IFA FirstHome Plus Program – assistance for Iowa residents buying a primary home.
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City of Cedar Rapids Assistance Program – forgivable loans for qualifying homebuyers in Cedar Rapids.
Each program has specific requirements. Visit our mortgage grants page to learn more.
†Actual amount depends on need as determined by program guidelines. This is a Federal Home Loan Bank (FHLB) grant. Funds can be used towards down payment and closing costs. Income limits are adjusted based on household size. For specific grant availability and detailed information on eligibility, visit FHLB Home$tart grant website or the FHLB Des Moines website.
Finance Your Home with a Local Eastern Iowa Bank
We’re Iowa’s Faster. Stronger. Better.® community bank, locally owned, family operated, and committed to helping Iowans achieve homeownership with FHA loan options. Learn more about FHA Loans in Iowa->
With over 95 years of experience serving Eastern Iowa communities, including Cedar Rapids, Marion, and Iowa City, our team understands the challenges buyers face. FHA loans make it easier with low down payments, flexible credit requirements, and local lenders who guide you through the process from start to finish.
If you’re ready to explore FHA loans, we’re ready to help.1
FHA Loan Disclosures
1Must be 18 or older to apply. All loans are subject to credit approval and program guideline. To qualify in Iowa, you’ll need a minimum credit score of 580 for a 3.5% down payment or 500–579 with 10% down. Verifiable income, recent tax returns, and bank statements are required to show repayment ability. The home must be your primary residence and meet FHA appraisal standards. FHA loans require an upfront Mortgage Insurance Premium (MIP) plus annual premiums built into your monthly payment. Not all loan programs are available for all loan amounts. Interest rate and program terms are subject to change without notice.
