Buying a first home in the Des Moines metro rarely takes 20% down — most qualified buyers get into a house for 3% or even nothing down, then stack the Iowa Finance Authority's down payment assistance on top to cover thousands more. The barrier between renting and owning here is usually not the price of a house; it's knowing which of the state and federal programs apply to your situation.
As an Executive Mortgage Consultant at HomeServices Lending in Urbandale, I work with Polk, Dallas, and Warren county buyers every week, pairing each one with the low or no down payment loan that fits their credit and budget, and navigating Iowa Finance Authority (IFA) programs that most national mortgage sites never mention. This guide walks through the two IFA mortgages, the down payment help that pairs with them, and the low-to-zero down payment loans that can get you to closing.
What is the Iowa Finance Authority and how do its mortgage programs work?
The Iowa Finance Authority (IFA) is the state's housing finance agency, created in 1975 to make homeownership affordable for Iowans. IFA doesn't lend directly — it buys the loans from approved lenders, which lets those lenders offer below-market interest rates and reduced fees. In fiscal year 2024 alone, IFA helped 2,665 Iowa families buy homes — a 15% increase over the prior year — with more than 91% of them also receiving down payment or closing cost assistance (IFA FY24 Performance Report).
IFA runs two mortgage programs for Des Moines metro buyers: FirstHome and Homes for Iowans.
IFA FirstHome — for first-time buyers
FirstHome is the flagship program, and it is reserved for buyers who have not owned a primary residence in the last three years (or who are military veterans, or who are buying in a targeted area). The numbers worth knowing:
Down payment: As low as 3% depending on the loan type paired with the program. Borrowers with qualifying income below 80% of the Area Median Income may get reduced mortgage insurance coverage (IFA FirstHome).
Interest rates: Below market — and your credit score does not affect your rate, which matters a lot for buyers in the 640–680 range.
Purchase price limit: $566,000 standard, up to $692,000 in targeted areas.
Income limits: Vary by county and household size — range is $102,100 to $171,360.
Credit score: Minimum 640.
Debt-to-income: Maximum 50%.
Homebuyer education: Required for all borrowers.
Free Iowa Title Guaranty Owner's Certificate at closing — this replaces the costly private title insurance you would pay for in other states.
IFA Homes for Iowans — open to repeat buyers too
Homes for Iowans mirrors FirstHome in most features but is available to both first-time and repeat buyers. The limits are higher:
Income limit: $171,360 (flat, not county-specific)
Purchase price limit: $692,000
Credit score: Min 640
DTI: Max 50%
Terms: 25 or 30 years, new purchase only (no refinances)
Both programs require that you move into the home within 60 days of closing and that you work with an IFA participating lender — not every mortgage lender in Des Moines is approved, so that is the first question to ask when you call. (IFA Homes for Iowans)
What down payment assistance does the IFA offer?
Both FirstHome and Homes for Iowans come with two down payment options — and you pick one per loan:
Option 1: The $2,500 down payment grant
A straight grant with no repayment required. It can be applied toward the down payment, closing costs, or both. In FY24, 357 homebuyers used the FirstHome $2,500 grant, and it is available with FirstHome mortgages only (IFA FY24 Performance Report).
Option 2: The 5% interest-free second loan
This is a loan of up to 5% of the home's sale price or appraised value (whichever is lower). No monthly payments — it is repaid only when you sell, refinance, or pay off the first mortgage. Subordination is not permitted, meaning you cannot move this debt behind a new loan. In FY24, 1,672 FirstHome buyers and 396 Homes for Iowans buyers used the 5% second loan option.
This second loan can cover down payment AND closing costs AND prepaids, making it the most flexible option for buyers with thin savings. The same $2,500 grant or 5% second loan option applies under the Homes for Iowans mortgage too, with the grant now discontinued for that program (1 buyer used it in FY24 before it ended).
Military Homeownership Assistance — $5,000 for veterans
Eligible service members, veterans, and surviving spouses qualify for an additional $5,000 grant from IFA, administered in partnership with the Iowa Department of Veterans Affairs. In FY24, 434 military members or veterans used this grant to buy a home in Iowa (IFA FY24 Performance Report). This can stack with the FirstHome or Homes for Iowans mortgage but not with a second down payment option — you get one assistance package total.
Which low-to-no down payment loans work best in Des Moines?
Beyond the IFA programs, Des Moines metro buyers have several mainstream loan options that pair naturally with the IFA down payment assistance. The right choice depends on your credit score, whether you qualify for a zero-down loan, and where the home sits in Polk, Dallas, or Warren counties.
Loan type | Minimum down | Typical credit score | Best for |
|---|---|---|---|
Conventional (Fannie Mae/Freddie Mac) | 3% | 620+ | Buyers with solid credit who want lower monthly mortgage insurance they can cancel later |
FHA | 3.5% | 580+ | Buyers with lower credit scores or higher debt-to-income ratios |
VA (active duty / veterans) | 0% | 620+ (varies by lender) | Eligible military buyers — no ongoing mortgage insurance |
USDA Rural Development | 0% | 640+ (varies) | Homes in eligible rural/suburban areas of Polk, Dallas, and Warren counties — income limits apply |
Dan Buchholz at HomeServices Lending in Urbandale runs these numbers weekly for Des Moines buyers: on a typical $275,000 Iowa home, a 3% conventional down payment runs $8,250, and the FHA option at 3.5% lands near $9,625 — not the $55,000 a 20% conventional would demand. Stack the IFA $2,500 grant on the 3% conventional and your cash-to-close from savings drops substantially. Dan can confirm whether HomeServices Lending is an IFA participating lender and check current program funding for your exact county.
If you have served in the military, the VA loan remains the single most powerful option: zero down, no mortgage insurance, and you can still pair it with a participating IFA lender for the below-market rate. The funding fee can be rolled into the loan, so you close with essentially nothing out of pocket beyond earnest money and the appraisal.
The USDA option for metro outskirts
Parts of Polk, Dallas, and Warren counties qualify as USDA-eligible rural areas, particularly on the edges of the metro — Adel, Van Meter, Mitchellville, and portions of northern Polk County. USDA loans require 0% down and allow the seller to pay up to 6% of the purchase price toward your closing costs. The catch: income limits apply (generally 115% of the area median income), and the property must be your primary residence.
How does the Urbandale 'local advantage' work?
What separates a smooth Iowa closing from a stalled one is knowing the state-specific mechanics that national lenders get wrong. Two matter most for first-time buyers here: Iowa Title Guaranty and the homestead tax exemption.
The way I read limits and price caps locally also matters. Polk, Dallas, and Warren are all targeted-area eligible for higher FirstHome limits in defined zones, and income caps shift by household size — so a buyer who assumes they're over a limit based on a generic national number is often actually qualified once a local officer runs the county-specific check. That's the gap a participating in-market lender fills.
Finally, Iowa's homestead tax exemption — replaced in 2026 by a new exemption equal to 10% of a home's taxable value, with a minimum of $5,500 and a maximum of $20,000 — lowers your ongoing property tax bill once you close (Iowa Department of Revenue). The bill, signed May 18, 2026, applies retroactively to assessment year 2026. Filing it with your county assessor by July 1 is a one-time step that pays every year you own the home.
What to ask an IFA participating lender before you apply
Before you commit to any program, confirm four things: (1) the lender is an approved IFA participant, (2) program funding is currently available — IFA assistance is first-come, first-served and can run out mid-year, (3) current county income limits for your exact household size, and (4) whether a local city-level down payment fund stacks on top of the state grant.
Des Moines metro first-time buyers can stack state IFA assistance with low-down-payment conventional, FHA, VA, or USDA loans. Reach out to Dan Buchholz at HomeServices Lending in Urbandale to check current IFA funding, confirm your county income limits, and see which program puts you in a house this year.
Dan Buchholz | Executive Mortgage Consultant | NMLS# 688239 HomeServices Lending | Urbandale, IA
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