Idaho first-time homebuyer assistance programs
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 a loan through the agency if your income is under $150,000 a year, 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 (but generally mustn’t exceed $150,000), 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 the option to get a second mortgage of up to 7 percent of the purchase price. There’s no minimum credit score requirement for the second mortgage, and you don’t have to be a first-time homebuyer to be eligible for this program.
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 7 percent, to be paid back monthly over 15 years, and can finance up to 10 percent of the home’s purchase price.
To be eligible, you must have a credit score of at least 620 (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 10-year down payment assistance loan can finance up to 3 percent of the home’s purchase price. The amount borrowed is forgiven in tiers over the 10 years and completely forgiven after the tenth year.
This loan can be combined with the Second Mortgage assistance program if your first mortgage is a First Loan, an HFA Advantage 50% AMI or 80% AMI loan or a Heroes loan.
To be eligible for the Forgivable Loan, you must complete a homebuyer education course and contribute at least 0.5 percent of your 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 of up to 35 percent of your annual mortgage interest, up to $2,000 each year. The credit can be used for the life of your mortgage so long as you continue to live in the home as your primary residence and can be rolled over for up to three years.
The MCC can be used in tandem with First Loans (only FHA or USDA products); HFA Advantage 50% AMI, 80% AMI and Over 80% AMI loans; the HFA Preferred 80% AMI and Over 80% AMI loans; and Idaho Heroes loans.
Home$tart
The Home$tart program offers down payment assistance of up to $15,000 [$7,500], in the form of a forgivable loan. Applicants must meet income limits, use a lender who is a member of the Home$tart program, take a homebuying education class, and live in the home as their primary residence for five years. If they do, the money does not need to be repaid.
Homeownership Opportunity Program (HOP)
If you live or are planning to live in Boise, Idaho, you may be able to take advantage of its Homeownership Opportunity Program. To be eligible, applicants must have a gross household income of at least 50 percent, but no more than 80 percent of the Area Median Income (AMI) as published annually by HUD. The funds can pay for closing costs or a down payment; in some cases, the city can also provide direct financing to reduce the size of the buyer’s first mortgage to make it more affordable. Interested homebuyers must contact one of the program’s two partner organizations, Neighborhood Works or LEAP Housing, to begin an application.
Other Idaho first-time homebuyer loans
In addition to Idaho’s homebuyer programs and HFA loans, there are other nationally-available mortgages, whose lower credit minimums and a low- or no-down payment requirement are particularly appeal to first-timers.
- FHA loans: You only need to have 3.5 percent of the purchase price down, plus a credit score of 580, to qualify for an FHA loan depending on the lender.
- VA loans: No down payment required, no minimum credit score to qualify, and competitive interest rates if you are a qualifying service member, veteran or eligible spouse.
- USDA loans: Like VA loans, there is no down payment required, and you may only need a credit score of 640 to qualify with USDA-approved lenders. However, USDA loans are only worth investigating if you want to purchase a home in a rural area (look here to see if your property meets the metrics for this mortgage)
In addition, other specialized loans, such as the Native American Direct Loan (NADL) or an energy-efficient mortgage (EEM), 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.
Get started
Your first step as a new homebuyer is to learn what programs you might qualify for. Buying a house in Idaho (or anywhere) takes patience and persistence to navigate the housing market. Connecting with a local mortgage lender who can guide you through the home-buying process is also a good idea. Visit the Idaho Housing and Finance Association’s website for more about their home loan and down payment assistance programs, too.
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.
