Single Mom Home Loans Iowa

It can be exciting to embark on your first home purchase; however, many hurdles and obstacles may come your way, including having adequate funds and savings to pay a down payment. This might be challenging for single mothers and other low-income home buyers in Iowa. Fortunately, a lot of home loan options and assistance programs are available for home buyers, including single mothers throughout the state of Iowa. These programs include down payment assistance, affordable mortgages, and first-time home buyer programs. The Housing Finance Agency provides veterans and military members home-buying assistance irrespective of the first-time buyer status. Single moms can take advantage of these programs to become a homeowner soon.

How Can Single Mothers Apply For Home Loans In Iowa?

Irrespective of whether you choose the IFA program or federal programs, you must ensure that you are working with an approved mortgage lender to begin your loan application. When your lender verifies that you can meet the eligibility requirements stated by the loan program, you may be asked to finish a homebuyer education course. Almost every conventional mortgage loan requires some buyers to complete homebuyer education before closing. Your mortgage lender will help you to guide through every step and enable you to seek an affordable loan.

Federal Single-Mom Home Loans In Iowa

Many federal government programs are available in the state of Iowa that are designed for struggling single moms and low-income home buyers who have limited cash to make down payments on low credit scores.

1. Federal Housing Administration, FHA loans

The Federal Housing Administration insures mortgages for single moms or other eligible buyers having low credit scores. These loans have competitive interest rates, and single mothers with higher credit scores must make a down payment of 3.5%, while home buyers with credit scores as low as 500 are required to pay a down payment of 10%. These loans also require mortgage insurance payments.

2. Department Of Veterans Affairs, VA Loans

Veterans, active duty military members, and eligible surviving spouses can apply for loans that the Department of Veterans Affairs backs. The best thing about these loans is that they come with lower interest rates and do not require any down payment.

3. USDA Loans

Loans that the United States Department of Agriculture guarantees are known as USDA loans that are designed exclusively for low or moderate-income borrowers who are planning to purchase a home in the rural regions of lowa.

Iowa First-Time Home Buyer Loan Programs

IFA, or Iowa Finance Authority, has implemented FirstHome and Homes For Iowans Program for single moms and other eligible home buyers. Both these programs have a specific purchase price and income limitation and assist applicants with a 640 minimum credit score. Single mothers can use these programs for conventional, USDA, VA, and FHA loans.

1. IFA FirstHome

The Iowa Finance Authority has designed the FirstHome Program exclusively for first-time home buyers. According to IFA, first-time home buyers have not owned property over the past three years. Candidates who are veterans or buying in specified areas can also qualify for this program. The prime benefit of this program is that it provides loans below-market interest rates. Single mothers with less than 80% of the area’s median income are eligible to get lower mortgage insurance premiums through this program. You can choose a 25 or 30-year term for a conventional first home loan. The eligibility requirement of this program includes paying a 3% down payment for a conventional loan, having a maximum debt-to-income ratio of 45%, a minimum credit score of 640, completing a homebuyer education course, and having an income ranging between $86,900 to $109,000. The home purchase price limit accounts for $349,000 if you are buying a property in non-targeted areas or $427,000 if you are purchasing in targeted areas.

2. IFA Homes for Iowans

This program is similar to FirstHome and is available to first-time and repeat home buyers. Although the program requires candidates to have a minimum credit score of 640, the credit score number will not affect their mortgage rate. The eligibility criteria of this program are similar to the FirstHome program; however, the purchase price of your home should not exceed the mark of $427,000, and your income limit should be less than 80% of the area median income or $1,526,000 if opting for a conventional loan. The debt-to-income ratio of buyers should not exceed 45%, and they must intend to occupy a property as a primary residence within 60 days of closing. This program has more liberal household income and home price limits than the FirstHome Program. The program offers down payment assistance in the form of a $2500 grant or a $5000 second home loan option or up to 5% of the housing price repayable once the house is sold.

3. IFA Military HomeOwnership Assistance Program

The Military HomeOwnership Assistance Program by IFA can be paired with homes for loans or FirstHome mortgages to assist eligible veterans, service members, or surviving spouses with closing costs and down payment. Through this program, eligible candidates can receive a grant of up to $5000 that they can pay towards purchasing their home. It would help if you work with an IFA-approved lender to be eligible for the program.

Other Loan Programs In Iowa

There are a lot of city and county programs that exist in the state of Iowa that boost homeownership among low-income single mothers. First-time home buyers in Iowa can find many government-backed loan programs. Freddie Mac Home Possible and Fannie Mae Home-Ready programs also provide affordable conventional mortgages and require homebuyers and single mothers to pay a down payment of 3%.

Conclusion

Single mothers in Iowa can find a lot of down payment and mortgage help through federal, state, or local programs. Single moms can receive many benefits through assistance programs designed for them to fulfill their home-buying dream. If you’re not able to qualify for conventional mortgages, then you can go out for federal government-backed loans such as FHA, USDA, and VA loans or look for grants and assistance programs provided by the IFA.