Mortgage Rates in Iowa
As of Sunday, April 11, 2021, current rates in Iowa are 3.20% for a 30-year fixed, and 2.42% for a 15-year fixed.
Compare today's average mortgage rates in the state of Iowa. Bankrate aggregates mortgage rates from multiple sources to provide averages for Iowa.
Iowa mortgage overview
The state of Iowa has both first-time homebuyer programs and programs for current homeowners moving into a new home. Funds from the state can help residents with making a down payment and paying closing costs for a mortgage, which are often barriers to purchasing a home.
First-time homebuyer programs in Iowa
Iowa’s first-time homebuyer program is operated by the Iowa Finance Authority (IFA) and provides buyers assistance with the down payment and closing costs. Through the FirstHome program, borrowers who obtain a mortgage through the Iowa Finance Authority can take advantage of either a down payment assistance grant or a loan through the 2nd Loan program.
- The FirstHome grant is a $2,500 grant to put toward the down payment and closing costs.
- The 2nd Loan is a no-monthly-payment loan of up to 5 percent of the sale price of the home, or $5,000, depending on which is less, that can help with the down payment and closing costs. The loan must be repaid when the first mortgage is paid off, or when the home is refinanced or sold.
To be eligible for the FirstHome program, borrowers must meet household income limits, which depend on the location of the home and vary. The income limit for a two-person household ranges from $79,700 to $101,200. The maximum purchase price limit is $294,000, unless you’re buying in a targeted area, where the purchase price limit is $360,000.
The FirstHome program also has a minimum credit score requirement of 640, although alternative credit history may be considered, and the maximum debt-to-income ratio is 45 percent.
To participate in the program, the borrower must be either:
- A first-time homebuyer (or have not owned a home in the past three years)
- A member of the military who was discharged honorably and has not already participated in the program Buying a home in a targeted area
Military Homeownership Assistance Program
Iowa’s Military Homeownership Assistance Program is a $5,000 grant for service members, veterans and surviving spouses that can be used toward the down payment and closing costs. The money can be used together with the FirstHome program and the Homes for Iowans program (for current homeowners). There are certain eligibility requirements, including length of service, and the borrower must work with an IFA-approved lender to qualify.
Iowa mortgage refinancing
The Iowa Finance Authority does not currently offer a mortgage refinancing program. Refinancing to a lower interest rate can help you save thousands of dollars over the life of your mortgage, and make the payments more affordable. If you’re considering a refinance, shop around for lenders and compare the terms of each loan offer to get the best possible refinance rate.