Idaho First-Time Home Buyer Programs of 2021

NerdWallet
By NerdWallet 
Edited by Alex Richards

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If buying a first home feels like a stretch, you might benefit from a first-time home buyer program offered nationally or within the state of Idaho. A variety of loan and grant programs are available to put homeownership within reach for residents of the Gem State.

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National first-time home buyer programs

Offered by most lenders, these nationally available loans have low down payment requirements, which makes qualifying easier for many first-time buyers.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

Idaho Housing first-time home buyer programs

The Idaho Housing and Finance Association offers purchase and refinance loans through a network of approved lenders for first-time and repeat home buyers, as well as down payment and closing costs assistance. The association’s home buyer tax credit program is available statewide to first-time buyers and repeat buyers in specific counties. In Idaho, you’re considered a first-time buyer if you haven’t owned a primary residence in at least three years.

Idaho Housing highlights and eligibility requirements

Highlights

  • Offers competitive interest rates for purchase and refinance mortgages.

  • Down payment and closing cost assistance available.

  • Some loan programs have reduced mortgage insurance requirements.

  • Tax credit program is open to repeat home buyers in targeted counties and first-time buyers in all counties.

Eligibility

  • Meet income and purchase price limits in your county.

  • Have a minimum credit score of 620 (this requirement is higher for some programs).

  • Complete a home buyer education course. One of the partners in a couple must complete the course if both are first-time home buyers.

  • Work with a lender approved by the Idaho Housing and Finance Association.

Fannie Mae HFA Preferred

Best for:

Low down payment, low mortgage insurance requirement, down payment assistance, closing cost assistance

What you need to know:

This program allows for a down payment as low as 3% for first-time and repeat home buyers, and may be combined with down payment assistance and/or a mortgage credit certificate. Mortgage insurance requirements may vary based on borrower income. Home buyer education may be required if both borrowers are first-time home buyers or down payment assistance is used.

Freddie Mac FHA Preferred

Best for:

Down payment assistance, closing cost assistance, low down payment, low mortgage insurance requirement

What you need to know:

This program allows for a down payment as low as 3% for first-time and repeat home buyers, and may be combined with down payment assistance and/or a mortgage credit certificate. Mortgage insurance requirements may vary based on borrower income. Home buyer education may be required.

First Loan FHA/VA/RD program

Best for:

Low down payment, low mortgage rates

What you need to know:

Idaho Housing’s First Loan programs offer FHA, VA or USDA "Rural Development" mortgages with reduced interest rates to buyers who have not owned a home in the state’s “non-targeted” counties in the past three years. Sale price and income limits apply to all versions of this loan program, and eligible property types may include manufactured homes. Homebuyer education is required for those who get assistance with down payments and closing costs. The state’s homebuyer tax credit program is not available under any version of the First Loan program.

Forgivable Loan for Down Payment/Closing Costs

Best for:

Down payment assistance, closing costs assistance

What you need to know:

Available for purchase and certain refinance loans through Idaho Housing, this program provides a grant to help with a down payment and closing costs. The assistance is in the form of a zero-interest forgivable loan. After four years, the loan starts being gradually forgiven. After seven, the loan is completely forgiven if the program’s terms are met. Borrowers must contribute 0.5% of the sales price toward the home purchase.

Second Mortgage for Down Payment/Closing Costs

Best for:

Down payment assistance, closing costs assistance

What you need to know:

This program provides a loan at 5% interest over 10 years to help with a down payment and closing costs. Borrowers could qualify for a loan of up to 3.5% of the property’s sales price or appraisal value (whichever is less), but it depends on the type of mortgage chosen. Borrowers must contribute at least 0.5% of the sales price toward the home purchase.

Homebuyer Tax Credit (MCC)

Best for:

Tax credit

What you need to know:

This tax credit is open to all Idaho first-time home buyers and repeat buyers in targeted counties. The program lets a home buyer get a federal tax credit of up to $2,000 annually for mortgage interest paid each year.

Your next step

You can read more about Idaho home buyer programs and check your eligibility by filling out a form on Idaho Housing's website. To apply, you’ll need to work through a participating lender. After searching by location or for a specific company, you can start shopping. For more information on how to weigh options, see our tips for finding the best mortgage lender.

Getting ready to buy a home? We’ll find you a highly rated lender in just a few minutes.

Enter your ZIP code to get started on a personalized lender match.

 

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