What are IFA loans and how do they work?

November 9th, 2012 Barry Green

Whether you’re a first-time homebuyer, or a seasoned pro, don’t finalize your home financing until you’ve considered Iowa Finance Authority (IFA) loans. If you qualify, it could result in substantial savings for you!

What is the IFA?

The IFA was formed in 1975 to help low- and moderate-income Iowans attain housing. Since then, IFA’s role has expanded considerably and includes homeless assistance to multifamily rental to single-family homeownership.

While the organization is not a direct lender, they are able to offer affordable, fixed-rate mortgages with a local lender, such as MidWestOne Bank.

What kinds of loans does the IFA offer?

Together with MidWestOne you can take advantage of the following IFA loans:

FirstHome & FirstHome Plus

The FirstHome program offers first-time home buyers state-sponsored, affordable, fixed rate mortgages. FirstHome Plus must be used in conjunction with a FirstHome grant, which provides $2,500 assistance to help eligible borrowers with settlement costs, down payment and minor repairs.

To qualify for these grants you must meet the following requirements:

  • Your household income must meet the eligibility criteria set by IFA.
  • The home you’re purchasing must be located in Iowa and cost no more than $305,000 if located in a Targeted Area or $250,000 if located in a Non-Targeted Area.
  • You must occupy the home as your primary residence within 60 days of closing.
  • You must demonstrate an ability to repay the loan.
  • You must have an acceptable credit history.

Homes for Iowans and Homes for Iowans Plus

The Homes for Iowans helps both repeat and first-time Iowa home buyers by providing safe, affordable, fixed interest rate mortgage. Homes for Iowans Plus, provides eligible borrowers with up to $2,500 in cash assistance for settlement costs, down payment and minor repairs. It must be used in conjunction with the Homes for Iowans program.

To qualify, you must:

  • Purchase a home that cost no more than $305,000 and is located in Iowa.
  • Meet eligibility requirements. Program income limits vary by county. Use this home buyer eligibility tool to determine if you may be eligible.
  • Occupy the home as your primary residence within 60 days of closing.
  • Demonstrate an ability to repay the loan.
  • Have an acceptable credit history.

IFA benefits

  • The interest rates for FirstHome and Homes for Iowans loans are typically lower than the market rate and are fixed for 30 years.
  • Home mortgages financed with the IFA may require a very low down payment or no down payment at all, and they may be conventional loans or loans backed by the federal government.
  • Interest rates do not change based on the qualified borrower’s credit rating.
  • Borrowers who use IFA loans may request a free Title Guaranty Owner’s Certificate. This certificate protects the borrower’s interest in the property’s title, even after the home is sold.

For more information about IFA loans, or to determine if you may qualify, speak to your local MidWestOne lender.

About the author

Barry Green is Vice President, Home Mortgage Sales Manager of MidWestOne Bank

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