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Everything You Need to Know About IFA Mortgage Loans

The Iowa Finance Authority (IFA) offers affordable mortgage, down payment, and closing cost assistance programs for both first-time and experienced home buyers. Put the dream of homeownership within reach or purchase your next home with confidence. In this article, we’ll explain how the IFA Mortgage Loan program works and how you can benefit.

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What is the Iowa Finance Authority?

Created by the Iowa Legislature in 1975, the purpose of the Iowa Finance Authority (IFA) is to enhance the quality of life for communities across the state. To promote the health of Iowans, the IFA connects people with affordable financing for housing, water quality, and agricultural development. Today, the IFA is a self-supporting public agency. 

The IFA also offers community development programs, including issuing tax-exempt bonds, providing the lowest cost funds for drinking water and wastewater facilities in Iowa, and offering Iowa Title Guaranty, which provides guaranteed title to real property in Iowa. 

How do IFA home loans work?

There are two Iowa Finance Authority mortgage loan programs, one for first-time buyers and one for experienced home buyers. Learn about each of them below.

FirstHome Program

The FirstHome Program is specifically designed to assist first-time homebuyers in Iowa. Benefits include:

  • Lower interest rates
  • Fewer fees
  • Credit score doesn’t affect your interest rate
  • Put as little as 3% down depending on the loan type
  • Down payment and closing cost assistance programs are available to help cover upfront expenses
  • May include reduced mortgage insurance coverage for borrowers with lender’s qualifying income of less than 80% of the Area Median Income
  • Free Iowa Title Guaranty Owner’s Certificate 
  • Pair one of IFA’s down payment assistance programs with your FirstHome mortgage to help with down payment and closing costs.

Homes For Iowans Program

It doesn’t matter if it’s your first or fifth home, this program is not exclusive to first-time buyers. Buying a home is a big investment and the Iowa Finance Authority makes the process easier with benefits such as:

  • Fewer fees
  • Credit score doesn’t affect your interest rate
  • Put as little as 3% down depending on the loan type
  • May include reduced mortgage insurance coverage for borrowers with lender’s qualifying income of less than 80% of the Area Median Income
  • Free Iowa Title Guaranty Owner’s Certificate 
  • Pair one of IFA’s down payment assistance programs with your Home for Iowans mortgage to help with down payment and closing costs.

IFA’s Down Payment and Closing Costs Programs

Overall, you can choose between grants and loans for down payment and closing costs assistance. Review IFA’s programs below and use one in conjunction with an IFA mortgage to make homebuying easier and more affordable. 

FirstHome Down Payment and Closing Costs Assistance Options

Choose between a $2,500 grant or a 2nd loan of up to 5% of the home’s sale price or $5,000 (whichever is less). There is no monthly payment on the 2nd loan; instead, you pay it back when you sell the home, refinance your first mortgage, or pay the first loan off.

Minority Down Payment Pilot Program

This new program offers a $5,000 grant for down payment and closing cost assistance to eligible Iowans with a FirstHome program mortgage. May be combined with IFA’s Plus grant. Subject to funding availability.

Homes for Iowans Down Payment and Closing Costs Assistance Options

Choose between a $2,500 grant or a 2nd loan of up to 5% of the home’s sale price or $5,000 (whichever is less). There is no monthly payment on the 2nd loan; instead, you pay it back when you sell the home, refinance your first mortgage, or pay the first loan off.

Military Homeownership Assistance Program

Eligible service members and veterans can receive a $5,000 grant for down payments and closing costs on qualifying homes. Can be combined with the 2nd loan opportunity from IFA.

Requirements for the IFA Mortgage Loan Programs

Interested in one of the IFA programs? Check your eligibility:

FirstHome Program

  • Household income limits starting at $79,500 depending on household size
  • Home purchase price limit of $311,000
  • Must be a first-time homebuyer (defined as not owning a primary residence in the last three years)
  • Must be owner-occupied as a primary residence
  • Minimum 640 credit score
  • The debt-to-income ratio cannot exceed 45%
  • Homebuyer education is required on conventional loans only

Homes For Iowans

  • Household income limit of $139,580
  • Home purchase price limit of $381,000
  • Available to first-time and repeat homebuyers
  • Must be owner-occupied as a primary residence
  • Minimum 640 credit score
  • The debt-to-income ratio cannot exceed 45%
  • Homebuyer education is required on conventional loans only

"I couldn’t be prouder of the mortgage team for their efforts in achieving the accomplishment of 2020 IFA Top Lender. This recognition exemplifies one of our core values at Lincoln Savings Bank of Building Stronger Communities,” said Jordan Schick, Head of Mortgage. “Through our partnership with Iowa Finance Authority, Lincoln Savings Bank's commitment to helping Iowans achieve their homeownership dreams becomes a reality for homebuyers in our communities."

Interesting in learning more or applying for an IFA loan? Connect with a mortgage lender or contact us today to start your homebuying journey!

 

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