Iowa FHA Loans
In nearly every part of the country, the economy is slower than it was five years ago. While this slowdown does have unfortunate repercussions for some people, it also represents a great opportunity when it comes to real estate. Thanks in part to the cyclical nature of the real estate market and to the slower economy, housing prices are substantially reduced in most states and counties. If you've been wondering when the right time to buy your first home is, the answer is most likely now!
Benefits of FHA Loans
But what about the financial considerations of owning a house? Chances are, if you're a first time homebuyer, the Iowa FHA loan program can really benefit you. Iowa's FHA loans are administered by the Federal Housing Administration and provide an opportunity for homebuyers who might have credit problems (even including previous bankruptcies) or have not had the means to save up a large down payment.
Traditional lending programs administered by banks are often reasonably strict when it comes to credit scores and typically require 20% of the purchase price as a down payment, which is very difficult for a good percentage of buyers. The Iowa FHA program, on the other hand, is willing to guaranty your loan to the bank and has much less stringent credit requirements. Additionally, getting an Iowa FHA loan means that you only need 3.5% of the purchase price as a down payment and can roll your closing costs into the loan, drastically reducing the amount of cash you'll need to close on your new house.
Iowa FHA Loan Limits
Before you start house shopping however, you'll need to check with your lender regarding the loan limits for the Iowa FHA loan program. Each year, the Federal Housing Administration sets a maximum limit for the amount of money each borrower can receive from the program. The baseline limit is set by median housing prices in the country and then adjusted for specific areas' cost of living, which means that if you live in a high cost of living area, your loan limit will be adjusted accordingly.
Since all counties in Iowa have an average cost of living, the maximum loan value for the entire state is $271,050, which is the baseline value set for 2009. This loan value is for a single family dwelling, so if you're considering the purchase of a multi-family dwelling, you'll need to check with your lender. Maximum loan values for Iowa FHA loans vary on multi-family dwellings, and you'll have to get the specific limit for the type of building you're purchasing.