Iowa FHA Loans –  Requirements and Loan Limits for 2024

iowa fha lenders

Iowa home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Iowa FHA loan. There are many FHA lenders in Iowa, but not all of them participate in all of the FHA loan options available.

We have been helping homebuyers to purchase or refinance a home for well over 20 years and FHA loans are our specialty. We will take you through the Iowa FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified.  

If you already know that an FHA loan is right for you, then click to connect with an Iowa FHA lender whether you live in Des Moines, Cedar Rapids, Davenport, Sioux City, or anywhere else.

FHA Loan Benefits

These are the benefits of an FHA mortgage versus a conventional loan:

  • Lower credit scores permitted
  • Lower down payment requirement
  • FHA interest rates are lower than conventional rates
  • Gift funds allowed
  • Seller closing cost contributions are allowed
  • FHA loans are assumable
  • Co-signers allowed
  • Higher debt to income ratios permitted
  • Shorter bankruptcy waiting periods
  • More programs available for creative financing

These are just some of the basic benefits of an FHA loan. There may be other reasons why the loan program

Iowa FHA Loan Requirements for 2024

These are the basic FHA loan eligibility requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, an FHA lender can help.

  • Down payment of 3.5% or 10% if your credit score is below 580
  • 2-year employment history with some exceptions allowed
  • Fully document your income for the past two years
  • Minimum FICO score requirement of 500 – down payment will vary
  • Mortgage Insurance Premium (MIP) is required for every FHA loan
  • Maximum debt to income ratio of 43% with exceptions up to 56%
  • Property requirement – the home must be your primary residence
  • No bankruptcies or foreclosures in the past two years

This government backed mortgage is setup to best help first time home buyers. We have a loan calculator below which can help you to quickly get an idea of what your payment could look like.

FHA Down Payment Requirements in Iowa

The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.

If you do not have the down payment needed, you can also use gift funds from a relative.

FHA Down Payment Assistance Programs in Iowa

There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Iowa. Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.

HomeStart Down Payment Assistance Program

Iowa Finance Authority Down Payment Assistance

Cedar Rapids Down Payment Assistance

Dubuque Home Buyer Assistance

Waterloo Down Payment Assistance

We also have a lender provided down payment assistance option for you. There is a minimum credit score requirement but the ability to include the assistance in the lender offer package is much easier than dealing with separate companies. If this is something you would like more information about, then contact us.

Loan Application and Pre-Approval Process

If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved.

  1. The first step is to make sure you have the minimum down payment needed to qualify. There may be down payment assistance options
  2. Next, check your credit and try to cleanup anything that is pulling down your scores
  3. Get a copy of your tax returns for the past two years
  4. Get copies of your pay stubs for the past month
  5. Get copies of your last two months’ bank statements
  6. Speak to an FHA lender about your loan scenario
  7. Fully complete the loan application. 
  8. Your loan officer will pull your credit and the liabilities will be imported into your loan application.
  9. The automated underwriting system will quickly analyze your scenario and will return an approval if you meet the minimum standards.
  10. The loan officer will issue the pre-approval letter so you can begin shopping for a home

Speak to a lender early in the home shopping process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.

Top Iowa FHA lenders

These lenders are just a few options for you to consider. Please note that each lender is different and may have different eligibility requirements. It is possible that none of these options are best for you depending upon your scenario. We can help you to find the best option for your needs. Simply complete this short form.

  1. Bank IowaContact
  2. Bank of England IowaContact
  3. Iowa State BankContact
  4. Boone Bank and TrustContact
  5. Home Point FinancialContact
  6. Iowa Finance AuthorityContact

Let us help you to find the best FHA lender in your area by completing this FHA loan scenario form with some basic loan scenario information. No credit report will be pulled and we can connect you with the best option.

Iowa FHA Loan Limits

Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Iowa for most counties is $498,257. Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.

County Name Single Family 2 Units 3 Units 4 Units
ADAIR $498,257 $637,950 $771,125 $958,350
ADAMS $498,257 $637,950 $771,125 $958,350
ALLAMAKEE $498,257 $637,950 $771,125 $958,350
APPANOOSE $498,257 $637,950 $771,125 $958,350
AUDUBON $498,257 $637,950 $771,125 $958,350
BENTON $498,257 $637,950 $771,125 $958,350
BLACK HAWK $498,257 $637,950 $771,125 $958,350
BOONE $498,257 $637,950 $771,125 $958,350
BREMER $498,257 $637,950 $771,125 $958,350
BUCHANAN $498,257 $637,950 $771,125 $958,350
BUENA VISTA $498,257 $637,950 $771,125 $958,350
BUTLER $498,257 $637,950 $771,125 $958,350
CALHOUN $498,257 $637,950 $771,125 $958,350
CARROLL $498,257 $637,950 $771,125 $958,350
CASS $498,257 $637,950 $771,125 $958,350
CEDAR $498,257 $637,950 $771,125 $958,350
CERRO GORDO $498,257 $637,950 $771,125 $958,350
CHEROKEE $498,257 $637,950 $771,125 $958,350
CHICKASAW $498,257 $637,950 $771,125 $958,350
CLARKE $498,257 $637,950 $771,125 $958,350
CLAY $498,257 $637,950 $771,125 $958,350
CLAYTON $498,257 $637,950 $771,125 $958,350
CLINTON $498,257 $637,950 $771,125 $958,350
CRAWFORD $498,257 $637,950 $771,125 $958,350
DALLAS $498,257 $637,950 $771,125 $958,350
DAVIS $498,257 $637,950 $771,125 $958,350
DECATUR $498,257 $637,950 $771,125 $958,350
DELAWARE $498,257 $637,950 $771,125 $958,350
DES MOINES $498,257 $637,950 $771,125 $958,350
DICKINSON $498,257 $637,950 $771,125 $958,350
DUBUQUE $498,257 $637,950 $771,125 $958,350
EMMET $498,257 $637,950 $771,125 $958,350
FAYETTE $498,257 $637,950 $771,125 $958,350
FLOYD $498,257 $637,950 $771,125 $958,350
FRANKLIN $498,257 $637,950 $771,125 $958,350
FREMONT $498,257 $637,950 $771,125 $958,350
GREENE $498,257 $637,950 $771,125 $958,350
GRUNDY $498,257 $637,950 $771,125 $958,350
GUTHRIE $498,257 $637,950 $771,125 $958,350
HAMILTON $498,257 $637,950 $771,125 $958,350
HANCOCK $498,257 $637,950 $771,125 $958,350
HARDIN $498,257 $637,950 $771,125 $958,350
HARRISON $498,257 $637,950 $771,125 $958,350
HENRY $498,257 $637,950 $771,125 $958,350
HOWARD $498,257 $637,950 $771,125 $958,350
HUMBOLDT $498,257 $637,950 $771,125 $958,350
IDA $498,257 $637,950 $771,125 $958,350
IOWA $498,257 $637,950 $771,125 $958,350
JACKSON $498,257 $637,950 $771,125 $958,350
JASPER $498,257 $637,950 $771,125 $958,350
JEFFERSON $498,257 $637,950 $771,125 $958,350
JOHNSON $498,257 $637,950 $771,125 $958,350
JONES $498,257 $637,950 $771,125 $958,350
KEOKUK $498,257 $637,950 $771,125 $958,350
KOSSUTH $498,257 $637,950 $771,125 $958,350
LEE $498,257 $637,950 $771,125 $958,350
LINN $498,257 $637,950 $771,125 $958,350
LOUISA $498,257 $637,950 $771,125 $958,350
LUCAS $498,257 $637,950 $771,125 $958,350
LYON $498,257 $637,950 $771,125 $958,350
MADISON $498,257 $637,950 $771,125 $958,350
MAHASKA $498,257 $637,950 $771,125 $958,350
MARION $498,257 $637,950 $771,125 $958,350
MARSHALL $498,257 $637,950 $771,125 $958,350
MILLS $498,257 $637,950 $771,125 $958,350
MITCHELL $498,257 $637,950 $771,125 $958,350
MONONA $498,257 $637,950 $771,125 $958,350
MONROE $498,257 $637,950 $771,125 $958,350
MONTGOMERY $498,257 $637,950 $771,125 $958,350
MUSCATINE $498,257 $637,950 $771,125 $958,350
O’BRIEN $498,257 $637,950 $771,125 $958,350
OSCEOLA $498,257 $637,950 $771,125 $958,350
PAGE $498,257 $637,950 $771,125 $958,350
PALO ALTO $498,257 $637,950 $771,125 $958,350
PLYMOUTH $498,257 $637,950 $771,125 $958,350
POCAHONTAS $498,257 $637,950 $771,125 $958,350
POLK $498,257 $637,950 $771,125 $958,350
POTTAWATTAMIE $498,257 $637,950 $771,125 $958,350
POWESHIEK $498,257 $637,950 $771,125 $958,350
RINGGOLD $498,257 $637,950 $771,125 $958,350
SAC $498,257 $637,950 $771,125 $958,350
SCOTT $498,257 $637,950 $771,125 $958,350
SHELBY $498,257 $637,950 $771,125 $958,350
SIOUX $498,257 $637,950 $771,125 $958,350
STORY $498,257 $637,950 $771,125 $958,350
TAMA $498,257 $637,950 $771,125 $958,350
TAYLOR $498,257 $637,950 $771,125 $958,350
UNION $498,257 $637,950 $771,125 $958,350
VAN BUREN $498,257 $637,950 $771,125 $958,350
WAPELLO $498,257 $637,950 $771,125 $958,350
WARREN $498,257 $637,950 $771,125 $958,350
WASHINGTON $498,257 $637,950 $771,125 $958,350
WAYNE $498,257 $637,950 $771,125 $958,350
WEBSTER $498,257 $637,950 $771,125 $958,350
WINNEBAGO $498,257 $637,950 $771,125 $958,350
WINNESHIEK $498,257 $637,950 $771,125 $958,350
WOODBURY $498,257 $637,950 $771,125 $958,350
WORTH $498,257 $637,950 $771,125 $958,350
WRIGHT $498,257 $637,950 $771,125 $958,350

FHA 203k Loans in Iowa

FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.

If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.

FHA Streamline Refinance in Iowa

The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.

For more information, please read our article on the FHA streamline refinance.

What to Look for in an FHA Lender

We take a few things into consideration when looking at which lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.

A good FHA lender will:

  • Allow for credit scores as low as 500
  • Provide FHA 203k loans
  • Offer competitive rates and fees
  • Have a great processing and underwriting team
  • Work closely with you throughout the loan process
  • Communicate well and will provide you with updates along the way

Purchasing a house is likely one of the biggest decisions of your life. Let us help by taking you through all of the steps needed to close on your home.

FHA Mortgage Calculator

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Frequently Asked FHA Questions

Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.

Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.

Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.

Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.

Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.

FHA Facts and Statistics

1. FHA loans are a type of mortgage loan that is government insured by the Federal Housing Administration (FHA).
2. These loans are specifically designed to help low-to-moderate-income borrowers in Iowa purchase or refinance their homes.
3. A minimum credit score requirement exists for Iowa homebuyers, typically around 580, but can be as low as 500.
4. The down payment requirement as low as 3.5% of the purchase price.
5. Borrowers with higher credit scores and larger down payments may be eligible for lower interest rates on their Iowa home purchase.
6. Some closing costs for these loans can be rolled into the loan amount for refinances, making it easier for borrowers to afford upfront expenses.
7. FHA loans offer flexible qualification criteria, including allowances for higher debt-to-income ratios compared to conventional loans.
8. These loans have limits on how much money you can borrow based on the county in which you’re purchasing a home.
9. Borrowers must go through an approved lender who is authorized to originate FHA-insured loans.
10. Approximately 37% of homebuyers in Iowa utilize FHA loans for their mortgage purchase and refinance mortgages.
12. Over 63% of first-time homebuyers in Iowa finance their homes through FHA loans.
13. In the past year, there has been a 12% increase in the number of FHA loans issued in Iowa.
14. Around 22% of FHA loan borrowers in Iowa choose adjustable-rate mortgages (ARMs) over fixed-rate mortgages (FRMs).
15. The foreclosure rate for homes in Iowa using FHA financing is remarkably low at just 0.87%.
16. The average loan amount for an FHA loan in Iowa is $172,500.
10. Approximately 52% of all single-family homes purchased in Iowa are financed through FHA loans.

We have FHA lenders who can help with your FHA loan in all 50 states

iowa fha loans