The City of Iowa City and GreenState Credit Union are partnering to increase homeownership opportunities for households that do not meet traditional financial parameters in an effort to close the racial homeownership gap in Iowa City.
GreenState Credit Union will provide financing for underserved neighborhoods and households that have experienced difficulty obtaining a standard 30-year mortgage. They will offer flexibility in credit, assets, and job tenure in consideration of mortgage approval. Potential buyers will receive homebuyer education and financial counseling through Horizons at no cost.
The City of Iowa City will provide up to $15,000 in down payment assistance for eligible homebuyers using federal CDBG/HOME funds.
1. Household income must be under 80% of the Area Median Income to qualify for down payment assistance. This amount is based on household size and includes income for anyone who will live in the purchased home.
Maximum Household Income:
1-person household: $61,050
2-person household: $69,800
3-person household: $78,500
4-person household: $87,200
5-person household: $94,200
6-person household: $101,200
Effective June 15, 2022
2. Buyer must qualify for financing through GreenState for the cost of the home not covered by the City's down payment assistance.
3. All participants must complete a HUD-approved homebuyer education course.
4. Buyers must contribute a minimum of $250 of their own funds for down payment or closing costs and show two months of housing payments in reserves (savings that will be available after the closing in case of emergency).
- Purchased homes must be located within the City of Iowa City municipal boundaries in a low income census tract (link to interactive map).
- Single family and condo units are eligible. Mobile home purchases are not eligible.
- The purchase price of the home cannot exceed $259,000.
- Properties cannot be located within a 100-year floodplain. City staff will complete an environmental review for each home prior to closing.
- Homes must pass a Housing Quality Standards (HQS) inspection and the property must be in compliance with federal lead regulations prior to the closing.
- Homes must be owner-occupied or vacant (not a current rental property with tenants) prior to purchase.
Down Payment Assistance
Up to $15,000 will be provided to eligible homebuyers. The actual amount of assistance will be based on underwriting.
Down payment assistance is provided as a 10-year forgiveable loan. If you live in the home for ten years, the loan will be forgiven. If you sell or rent out your home within the ten year compliance period you would have to repay a pro-rated amount of the assistance.
How to Get Started
1. Complete a mortgage application with GreenState Credit Union. Work with a local GreenState lender to obtain a mortgage pre-approval letter.
Iowa City Lender Contact by Location:
Downtown Iowa Avenue - Pete Johnson (319) 341-2213
Eastside Iowa City - Sara Marshall (319) 248-7182
Westside Iowa city - Sean Pottratz (319) 248-7128
Coralville - Matt Frascht (319) 341-3062
North Liberty Penn St - Eric Baumgarth (319) 341-3070
North Liberty Financial Center - Jessica Campbell (319) 248-7175
2. Complete the HUD-required homebuyer education course through Horizons. GreenState will cover any costs associated with homebuyer education.
3. Once you have been pre-approved by GreenState, you can apply for down payment assistance through the City of Iowa City. Applications will be accepted on a first come, first serve basis while funds are available. Once approved for downpayment assistance, the City will issue a Pre-qualification Letter.
Online Application for Down Payment Assistance
1. Find an eligible home to purchase and make an offer.
2. Complete required home inspections.
3. The City and GreenState will complete the required underwriting for their respective loans.
4. Close on your home.
5. Keep the home as your principal residence for 10 years.