Idaho isn’t just one of the most beautiful states in the country. It’s also a great place to buy a home. If this is your first time buying a home, don’t worry — many programs in Idaho can assist you with down payments and more. Here’s everything about first time home buyer programs Idaho residents need to know.
Best First Time Home Buyer Programs in Idaho:
- Idaho Housing Home Loans
- Idaho Housing Second Mortgage
- Idaho Housing Forgivable Loan
- Home Buyer Tax Credit
Best National First Time Home Buyer Programs:
- Best National FHA Lender: Rocket Mortgage® by Quicken Loans®
- Best National VA Lender: Veterans United
- Best National USDA Lender in Idaho: Fairway Independent Mortgage Corporation
First Time Home Buyer Programs in Idaho
Idaho has a few programs that can help make your mortgage more affordable. Here’s an overview along with the eligibility requirements of each program. You can also check your eligibility on Idaho’s housing program website.
1. Idaho Housing Home Loans
The Idaho Housing and Finance Association partners with lenders to offer affordable mortgages. It offers FHA, VA, USDA and conventional mortgages. The association also offers a program called First Loan, which is specifically for a first time home buyer. You can also combine Idaho Housing home loans with Idaho’s other homeownership programs.
- Income: Your household can make up to $110,000 per year, depending on the type of mortgage you’re applying for. The First Loan mortgage has lower limits that vary by area.
- Education: You may be required to take a home buyer education class.
- Credit score: Each type of mortgage has its own credit score requirements. The First Look mortgage requires a 620 credit score or higher.
- Price limits: Price limits vary depending on the type of mortgage. A First Look mortgage has a sales price limit of $253,800 in most areas.
2. Idaho Housing Second Mortgage
This program provides a second mortgage that you can use to help with your down payment, closing costs or both. The second mortgage is a loan with a fixed rate of 5%, and you can pay it off over 10 years. You may be able to qualify for up to 3.5% of the home sales price.
- Income: Your household can make up to $110,000 per year.
- Education: You are required to take a homebuyer education class.
- Credit score: You need a credit score of 640 or higher if you’re combining the second mortgage with a First Loan mortgage. You need a credit score of 680 or higher if you’re combining it with another type of mortgage.
- Contribution: You must contribute at least 0.5% of the sales price out of your own funds.
3. Idaho Housing Forgivable Loan
The Idaho Housing Forgivable Loan is another option for closing cost and down payment assistance. Instead of having to repay the loan, this loan is forgiven after 7 years of homeownership. You may be able to combine the forgivable loan with a second mortgage, depending on the type of mortgage you choose. You may be able to qualify for up to 3.5% of the home sales price.
- Education: You must complete a homebuyer education class.
- Contribution: You must contribute at least 0.5% of the home sales price with your own funds.
4. Home Buyer Tax Credit
You may qualify for a Mortgage Credit Certificate if you’re a first time home buyer. This allows you to claim up to 35% of your mortgage interest as a tax credit on your federal taxes. You can claim up to $2,000 per year.
- You must be a first time home buyer or have purchased a home in a targeted area.
- You must live in the home.
- You must meet income limits, which vary by county and household size.
- You must meet sales price limits, which vary by county.
- You can’t have a First Loan mortgage.
Best National First Time Home Buyer Programs
As a first time home buyer, you have more options than just Idaho’s state programs. Here are the best national programs for first time home buyers, along with the best lender for each program.
FHA loans offer low down payment and credit score requirements, which makes them a great fit for first time home buyers. The Federal Housing Administration (FHA) guarantees these loans, which are offered through private lenders.
- Credit score: You can have a credit score as low as 500, but if your credit score is below 580, you have to make a 10% down payment.
- Down payment: If you have a credit score of 580 or higher, you can make a down payment as low as 3.5%.
- Income limit: There is no income limit, but you do have to earn enough to cover the mortgage.
- Purchase price limit: Purchase price limits vary depending on where you live. In most areas, the purchase price limit for a single-family home is $331,760. If you live in a high-cost area, your purchase price limit may be $765,600. You can find the purchase price limit for your area.
Best National FHA Lender: Rocket Mortgage® by Quicken Loans®
Rocket Mortgage® by Quicken Loans® offers an online mortgage experience that simplifies the entire process. It’s experienced with handling FHA loans and if you have questions along the way, you can talk to an expert by phone or chat. Rocket Mortgage® offers award-winning customer service, which makes it a perfect fit for first time home buyers. You’ll be supported at every step of the process, and you don’t have to leave your house to find a great lender.
VA loans are another excellent option for first time home buyers who qualify. VA loans are backed by the Department of Veterans Affairs and offered by private lenders. These loans typically have no down payment requirement and no mortgage insurance, which lowers your monthly payment.
- Service requirements: You must be a current service member or a veteran who meets the service requirements. Some spouses are eligible as well. To find out if you meet the requirements, contact the VA to request a Certificate of Eligibility.
- Credit score: The VA doesn’t have a minimum credit score requirement, but individual lenders might require a certain credit score.
- Income: There is no income limit, but lenders will confirm you can repay the mortgage.
- Down payment: You typically don’t have to make a down payment.
- Purchase price limits: There is no maximum loan amount, but if the loan exceeds $453,100 in most areas, you may need to make a down payment.
Best National VA Lender: Veterans United
Veterans United has been the top VA lender for the past 4 years, and for good reason. It offers outstanding customer service ratings and an easy-to-navigate website. Veterans United has representatives available around the clock, so if you have questions along the way, it’s easy to get the answers you need. Veterans United offers a wealth of educational materials on its website to ensure you’re fully informed about the mortgage process.
The Department of Agriculture offers home loans through private lenders to encourage people to buy homes in rural areas. If you qualify, you can buy a home with no down payment, which makes it an excellent fit for many first time home buyers.
- Citizenship: You must be a U.S. citizen, a non-citizen national or a qualified alien.
- Income: Your household income can’t exceed 115% of the median household income for your area. Find the income guidelines for your area.
- Credit score: There is no specific credit score requirement, but lenders do look at your credit history to ensure you can meet your obligations.
- Purchase price: Loan limits vary by location.
Best National USDA Lender: Fairway Independent Mortgage Corporation
Fairway Independent Mortgage Corporation has been offering mortgages for more than 20 years. It has branches throughout the country, so you can talk to someone face-to-face if you have questions. You can also start the application process online. Fairway offers educational tools on its website, and it also offers FHA, VA and conventional mortgages if you want to compare your options. It’s experienced with USDA mortgages, so you’ll be in good hands throughout the application process.
Which Mortgage is Right for Me?
Choosing the right mortgage is a big decision. The right mortgage for you depends on several factors. For example, if you’re self-employed, it can be a challenge to find a lender willing to lend you money. There are lenders who will work with you, though. If you have a low credit score, you’ll want to find a program and a lender that accepts lower credit scores.
There are a couple of things you can do to help streamline the process. First, gather your essential financial documents. Lenders will want to review recent bank statements, recent pay stubs, recent tax returns and your W-2s. Gather these documents together and keep them organized so you can submit them to prospective lenders.
Next, contact multiple lenders. It takes time to sort through multiple quotes but it’s worth it to find the best interest rate and the best terms. For example, if you want to apply for one or more of Idaho’s assistance programs, contact 2 or 3 lenders that work with those programs. Compare each lender’s terms and service. Choose the lender that offers both the best terms and the best customer service.
If you’re not sure where to start, consider taking Idaho’s home buyer education class. These classes are designed to help you navigate the home-buying process. They can tell you more about Idaho’s programs, what to look for in a lender and how to prepare yourself financially. It takes a little time out of your day, but it’s worth it to learn more about the home-buying process.
As a first time home buyer, you’re about to take a big financial step. Review your options carefully, ask questions and you’ll be on your way to realizing your dream of homeownership.