Iowa Home Loan Programs for Veterans

The Iowa Finance Authority (IFA) offers veteran-friendly home loan programs with lower interest rates, lower down payments, and other perks for veteran borrowers who meet the program’s requirements.

IFA loans are issued through a network of participating lenders and, in many cases, require credit checks, income limits, and purchase price limits. These loans are intended to help qualifying first-time home buyers, veterans, and those who have not owned a home recently (within the last three years) get affordable housing with down payment assistance possible in qualifying cases.

The IFA programs include:

• FirstHome Mortgage Program
• Homes For Iowans
• Military Homeownership Assistance Program

IFA FirstHome Mortgage Program

This is a first-time home buyer program open to veterans (who don’t have to be first-time buyers) that features lower interest rates (not affected by credit score) and lower fees, according to the official site.

Like many such programs, there are income limits, purchase price limits, and you may be required to purchase a home in a targeted area.

For qualified borrowers, there is a 3% down payment requirement, which is 0.5 percentage points lower than the minimum required investment for borrowers who choose the FHA home loan program.

This 3% down payment is not available to all applicants; it is a need-based offer for those with a qualifying income below 80% of the median income for your area.

Down payment assistance is available for IFA FirstHome Mortgages, and you can request a free Iowa Title Guaranty Owner’s Certificate on your closing day. What does this do? In cases where a title issue arises, “Iowa Title Guaranty will be there to step in and assume attorneys’ fees, costs, and expenses associated with defending the title to your home,” according to the official site.

What can you expect from the FirstHome Mortgage Program requirements? These numbers will change over time, but as a reference, they can help you decide whether the program is right for you. In FY 2020, requirements included:

• Household Income Limit: This varies by county; a typical 2020 household of two people could qualify for up to $101,200.
• Home Purchase Price Limit: this was capped at $294,000 in FY 2020, with certain exceptions allowing higher amounts in qualifying targeted areas.
• The applicant must be a first-time homebuyer, OR someone who has not owned a primary residence in the last three years, OR be a veteran with any discharge other than Dishonorable. Military members must not have previously used a mortgage revenue bond program such as FirstHome to finance a home purchase.

IFA Home For Iowans Mortgage Program

The Home For Iowans program is very similar to the FirstHome program; all requirements are similar, including income caps (actual dollar amounts may vary), purchase price caps, and other rules.

The biggest difference between the Home For Iowans program versus FirstHome? The Home For Iowans program is for both first-time home buyers AND repeat borrowers.

You may be required to certify that the home purchased under these programs is to be your primary residence. These offerings are not for investment property or for any home you don’t intend to occupy as your primary residence.

Military Homeownership Assistance Program

This IFA program is designed to help qualifying military members offset down payment and/or closing costs with a $5,000 grant. This program can be used in addition to the VA home loan benefit, or on a separate loan.

These funds can be used to purchase qualifying homes, and there is an annual cap on funds. First-come, first-served procedures apply, and once a given year’s funding runs out, the program will not approve new applicants until the next round.

Military service requirements for this homeownership program include:

• 90 days of active duty between Aug. 2, 1990, and April 6, 1991, or Sept. 11, 2001, to the present
• Those listed as being on “federal status as an injured service member who served on active duty between Aug. 2, 1990, to April 6, 1991, or Sept. 11, 2001, to the present day
• The applicant may be a surviving spouse of an eligible, honorably discharged service member

This assistance program requires the buyer to have prior approval before closing on the home; the applicant must use a participating lender.

That said, the official site adds that the IFA program may be able to approve a grant with a non-participating lender, provided the lender can show “that such financing is a fixed rate, permanent, fully amortizing mortgage loan that is lower-cost than the most comparable IFA mortgage product available at the time the applicable loan estimate is issued.”

This assistance is for eligible homes located within the state, purchased by an eligible applicant, and the home must be occupied as the borrower’s primary residence within 60 days of closing in most cases.

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