FirstHome 2nd Loan

FirstHome 2nd Loan is a deferred second loan for homebuyers in Statewide, Iowa. FirstHome 2nd Loan is IFA's flagship FTHB down-payment assistance — a $5,000 deferred-payment, non-forgivable, 0% interest second mortgage paired with the FirstHome 30-year fixed first mortgage (FHA/VA/USDA-RD/Conventional). Designed for first-time homebuyers. 640 FICO; county-specific income and acquisition caps. FirstHome 2nd Loan provides up to $5,000 in down payment and closing cost assistance, structured as a 0% interest, non-forgivable second mortgage with NO monthly payments. The principal balance is deferred until the home is sold, refinanced, paid off, or no longer the primary residence (or until the first mortgage matures). Paired with the IFA FirstHome first mortgage (30-year fixed-rate FHA, VA, USDA-RD, or Conventional HFA Preferred/Advantage). Buyer cannot combine FirstHome 2nd Loan with the FirstHome Grant — must choose one. Funding comes from State, HFA, and Bond.

FirstHome 2nd Loan is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off. Repayment is triggered by Deferred for life of first mortgage and balance due on sale, refinance, payoff, transfer of title, or end of mortgage term. 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.

FirstHome 2nd Loan is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time" has exceptions here: First-time-homebuyer rule waived in IFA-designated federally targeted census tracts and for qualifying veterans (per federal MRB rules). On credit, the program states: 640 minimum FICO across all eligible loan products. A homebuyer education course is required, through IFA-approved homebuyer education through Framework, Money Smart, or HUD-approved housing counseling agency; required for all FirstHome borrowers prior to closing. Residency requirement: Property must be located in Iowa and used as borrower's primary residence. Citizenship or immigration status: U.S. citizen, permanent resident, or qualifying non-permanent resident alien per first-mortgage product overlays. First-time homebuyer required (no homeownership interest in past 3 years); waived in IFA-designated federal targeted areas and for qualifying veterans. Minimum 640 FICO. Maximum 50% DTI. Property must be primary residence. Household income at or below IFA county-by-county published 2025/2026 limits (top tier ~$173,460 in targeted areas). Purchase price at or below IFA acquisition limit (top tier ~$665,000 targeted, ~$544,000 non-targeted). Must use IFA-approved Participating Lender. Homebuyer education required.

FirstHome 2nd Loan limits household income to $173,460. 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.

FirstHome 2nd Loan caps the purchase price at $665,000. Eligible property types include Single-family detached, condominium, townhouse, PUD, manufactured home (per first-mortgage overlays), 1-2 unit. New construction is eligible. Manufactured homes are eligible.

FirstHome 2nd Loan 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.

FirstHome 2nd Loan serves homebuyers purchasing in Statewide, Iowa. The program targets specific areas: IFA designates federally qualified target areas (typically lower-income census tracts) where the first-time-homebuyer requirement is waived and income/acquisition limits are higher.

Applications for FirstHome 2nd Loan go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through IFA-approved lender reserves funds via IFA's Online Lender Portal at time of loan reservation; subject to bond/program funding availability. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.