Down Payment Assistance Program

What is Down Payment Assistance Program?

Down Payment Assistance Program is a forgivable loan for homebuyers in Iowa City, Iowa.

• Iowa City DPA — up to $14,999 forgivable 5-year 2nd for FTHB at ~120% AMI in city limits. $285,000 max purchase price.
• Iowa City Down Payment Assistance Program provides up to $14,999 in down-payment and closing-cost assistance as a 0% interest forgivable second mortgage. Forgiven over 5 years provided the borrower remains in the home as primary residence. Iowa City city limits only.
• Funding comes from Local, HOME, and CDBG.

Do you have to pay it back?

Down Payment Assistance Program is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Forgiven over 5 years and full or pro-rata repayment if borrower sells, refinances, or vacates within 5 years.
• The assistance is recorded in 2nd Lien position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Down Payment Assistance Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Down Payment Assistance Program limits household income to 80% of the area median income, which varies by county and household size.

• ~120% AMI Johnson County / Iowa City MSA — typically $66,200 (1 person) up to $109,700 (8+ person) by household size.
• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Down Payment Assistance Program caps the purchase price at $285,000.

• Eligible property types include Single-family detached, condominium, townhouse.
• New construction is eligible.
• Manufactured homes are not eligible.

Is there eligibility for specific groups?

Down Payment Assistance Program names veterans, active-duty service members, reservists and National Guard members, and surviving spouses among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

Down Payment Assistance Program serves buyers purchasing in Iowa City, Iowa.

How do you apply?

Applications for Down Payment Assistance Program go through the administering agency, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through HUD-approved homebuyer education through Horizons or other City-approved counseling agencies; required prior to closing..

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Application through Iowa City Neighborhood Services; subject to annual allocation., and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.