If you’re planning to plant roots in Idaho, buying your first home in the state doesn’t have to feel out of reach. The Idaho Housing and Finance Association offers first-time and repeat homebuyers affordable loans and down payment assistance to help make a home purchase more manageable. Here’s a look at what’s available.
Idaho first-time homebuyer loan programs
The Idaho Housing and Finance Association (known as Idaho Housing) has a suite of conventional, FHA, VA and USDA loans for homebuyers purchasing a single-family home, condominium, townhome or manufactured home. In general, you can qualify for loan through the agency if your income is under $110,000 a year (or under $120,000 a year if you’re buying in Blaine County), your credit score is at least 620 and your debt-to-income (DTI) ratio is below 50 percent.
Idaho Housing’s programs for first-time homebuyers include:
HFA Advantage and HFA Preferred loans
Freddie Mac HFA Advantage and Fannie Mae HFA Preferred loans allow homebuyers to obtain a competitively priced mortgage through Idaho Housing with as little as 3 percent down. There are several loan options based on income level, with different benefits for each:
- HFA Advantage 50% AMI – For borrowers with income under 50 percent of the area median income (AMI), which is based on county; includes a gift of 1 percent of the loan principal to assist with closing costs or the down payment, and can be combined with other down payment assistance programs; also comes with lower mortgage insurance
- HFA Advantage 80% AMI – For borrowers with income under 80 percent of the AMI; includes a gift of 0.5 percent of the loan principal, and can be combined with other down payment assistance; also comes with lower mortgage insurance
- HFA Advantage Over 80% AMI – For borrowers with income above 80 percent of the AMI
- HFA Preferred 80% AMI – For borrowers with income under 80 percent of the AMI; can be combined with other down payment assistance programs; also comes with lower mortgage insurance
- HFA Preferred Over 80% AMI – For borrowers with income above 80 percent of the AMI
You don’t have to be a first-time homebuyer to be eligible for the HFA Advantage or HFA Preferred programs, but you do need to complete a homebuyer education course if you’re borrowing an HFA Advantage 50% AMI or 80% AMI loan, or an HFA Preferred 80% AMI loan. If you’re borrowing an HFA Advantage or HFA Preferred Over 80% AMI loan, you’ll only need to complete the course if you’re a first-time buyer or pairing the loan with down payment assistance.
In addition, you can’t buy a manufactured home with any of the HFA Advantage loans, but you can with an HFA Preferred loan.
Idaho Housing First Loan
Idaho Housing’s First Loan program, which comes with an FHA, VA or USDA loan, is available to first-time homebuyers or repeat buyers purchasing in a targeted county. A first-time buyer is considered someone who hasn’t owned a home in the last three years.
To be eligible for a First Loan, your income must fall within the program’s income limits, which vary by county, and the home you’re buying must not exceed purchase price limits, also based on county. If you’re obtaining an FHA or USDA loan, you’ll be subject to a homebuyer education course if you’re combining the mortgage with down payment assistance. If you’re getting a VA loan, however, there is no homebuyer education requirement.
Idaho Housing Idaho Heroes loan
Idaho Housing’s Idaho Heroes program offers low-interest loans to veterans, members of the military, teachers, firefighters, retail workers, healthcare professionals, law enforcement officers and paramedics. The program comes with a $1,000 grant to help with closing costs (available on a first come, first served basis), and the option to get a second mortgage up to 7 percent of the purchase price if additional assistance is needed. There’s no minimum credit score requirement for the second mortgage.
You don’t have to be a first-time homebuyer to be eligible, but there are separate income and purchase price limits, based on county, that can affect whether you qualify.
Idaho down payment assistance
Idaho Housing offers two down payment and closing cost assistance programs:
Idaho Housing Second Mortgage
This down payment assistance loan comes at a fixed rate of 5 percent, to be paid back monthly over 10 years, and can finance either 2.5 percent or 3.5 percent of the home’s purchase price depending on the loan it’s paired with.
To be eligible, you must have a credit score of at least 680 (unless your first mortgage program has a lower requirement), complete a homebuyer education course and contribute at least 0.5 percent of the purchase price from your own funds to the transaction.
Idaho Housing Forgivable Loan
This no-interest, seven-year down payment assistance loan can finance up to 3.5 percent of the home’s purchase price. The amount borrowed is forgiven in tiers over the seven-year period, and completely forgiven after the seventh year.
Notably, this loan can be combined with the Second Mortgage assistance program if your first mortgage is a First Loan or an HFA Advantage 50% AMI or 80% AMI loan.
To be eligible for the Forgivable Loan, you’ll need to complete a homebuyer education course and contribute at least 0.5 percent of your own funds to the purchase.
Other Idaho homebuyer assistance programs
Mortgage credit certificate (MCC)
Like many states, Idaho offers a mortgage credit certificate (MCC) to first-time homebuyers that allows you to claim a federal tax credit up to 35 percent of your annual mortgage interest, up to $2,000 each year. The credit can be used for the life of your mortgage so long as you continue to live in the home as your primary residence, and can be rolled over up to three years.
The MCC can be used in tandem with the HFA Advantage 50% AMI, 80% AMI and Over 80% AMI loans; the HFA Preferred 80% AMI and Over 80% AMI loans; and Idaho Heroes loans. It can’t be used with the First Loan program.
Other first-time homebuyer loan programs
In addition to Idaho state-level first-time homebuyer programs, there are other nationally-available loans, including FHA, VA and USDA loans, with lower credit minimums and a low or no down payment requirement. There are also specialized loans, such as the Native American Direct Loan (NADL) or an energy-efficient mortgage (EEM), that can help make homeownership more affordable for some borrowers. Many of these programs have competitive interest rates, as well. To find out what you might be eligible for, head to Bankrate’s first-time homebuyer loans and programs guide.
For other Idaho homeownership programs, visit HUD.gov.
Your first step as a new homebuyer is to learn what programs you might qualify for. Go to the Idaho Housing and Finance Association’s website for more about their home loan and down payment assistance programs and to connect with a mortgage lender.
Regardless of which program you ultimately choose, be sure to shop around with a few lenders to ensure you’re getting the best mortgage rate and offer based on your credit profile and financial situation.
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