Are you a first-time homebuyer shopping for a new house in Idaho? With its natural beauty from hardwood forests and precious stones to stunning vistas, it’s no wonder why your family would want to set roots in the splendor of the Gem State.
If you’re dreaming of buying a home in Idaho, but you’re not sure how you’ll come up with the cash, help is on the way. Between statewide and locally-run programs, first-time homebuyers can apply for homeownership incentives that can help with everything from down payment assistance, to tax credits and other perks. These programs are the financial boost you need to help you save up for your down payment, secure your home loan or cover closing costs.
Read on to learn more about these programs, their eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in Idaho?
A first-time homebuyer in Idaho is any family or individual who has never owned a home. However, for quick clarification, you’re also considered a first-time homebuyer if you haven’t owned a home in the past three years, according to the majority of these state and regional homeownership programs.
If you’re nearing the three-year mark, it may be worth waiting so you can become eligible again for any of these programs. Taking advantage of these first-time homebuyer perks could save you a lot of money through securing a lower interest rate on your mortgage or a 0 percent interest loan to cover your down payment.
There’s a silver lining, too. The statewide programs listed below apply to first-time homebuyers and repeat buyers alike. If you’re already an established homeowner moving up the property ladder, Idaho Finance and Housing Association programs are still fair game.
As always, when doing your research, be sure to read the fine print.
Statewide Homeownership Assistance Programs
The Idaho Housing and Finance Association offers a series of statewide assistance programs that are worth exploring for first-time homeowners and repeat homebuyers.
The programs differ but they share overarching requirements: homebuyers’ maximum income shouldn’t exceed $110,000, their maximum debt-ratio should be 50%, and they’ll need a minimum credit score of 620. Regardless of the program, the property must be your principal residence.
These programs are available in each county in Idaho. Across the board, you will need to complete a homebuyer’s education course called Finally Home, which can be completed online or in-person at a full-day session.
Here’s a detailed look at each of the programs.
IHFA Purchase and Refinance Loan Program
The Idaho Housing and Finance Authority offers purchase and refinance loans with affordable mortgage rates and down payment assistance options to first-time and repeat homebuyers
Via the program, you can get help with securing 30-year fixed rate FHA, VA, USDA and conventional loan mortgages with interest rates that are as low as 2.125%. Some IHFA loans can lower or eliminate homeowners’ insurance costs, too.
The catch? You’ll need to fall into the eligibility requirements listed above, complete a homebuyer’s education course, and adhere to sales price and income limits. You’ll also need to work with a participating lender to pre-qualify and begin the mortgage loan process.
IHFA Idaho Heroes Loan Program
While the IHFA provides conventional loans to homebuyers, the Idaho Heroes Loan Program is a new addition that launched during the COVID-19 pandemic. Eligible homebuyers can apply for a mortgage rate that’s lowered to 2.25% and they can also receive a gift of $1,000 to be used for closing costs.
The IHFA says the low interest rate and monetary assistance is a gift to say thank you to the state’s heroes. Eligible homebuyers include military personnel and veterans, healthcare professionals, firefighters, paramedics, law enforcement, teachers and retail workers.
You’ll need to secure an IHFA First Loan and you won’t want to wait too long; the grant is available on a first-come, first-served basis. You can also apply for down payment assistance of up to 7% of the sales price for your home purchase.
IHFA Second Mortgage Program
The IHFA Second Mortgage Program is earmarked to help homebuyers with their down payment and closing costs. Homebuyers can apply for a loan at 5% interest amortized over 10 years to cover their down payment and closing expenses.
You can borrow up to 3.5% of your home’s sales price or its appraised value (whichever is less). You have to contribute at least 0.5% of the sales price towards your home purchase.
To get started, you’ll need to qualify for an IHFA mortgage with a participating lender. Once again, the same eligibility requirements apply, from household income limits, home purchase price limits, and credit score to taking a homebuyer’s education course. This program is only available for home purchases and excludes refinancing.
To apply, check out the IHFA Second Mortgage page for more details.
IHFA Forgivable Loan Program
Homebuyers can triple dip with the IHFA Forgivable Loan Program, which provides a 0% interest 7-year loan. The assistance is forgiven gradually following a tier system starting after four years. For example, 25% of your loan is forgiven if it’s paid off after four years and it’s completely forgiven at the 7-year mark if the program’s terms are met.
Borrowers need to contribute at least 0.5% of the sales price towards their home purchase. You can apply for this Forgivable Loan alongside the Second Mortgage, as long as you qualify for an IHFA First Loan via a participating lender.
Check out the Forgivable Loan’s program page for more information.
IHFA Homebuyer Tax Credit
The IHFA Tax Credit – or Mortgage Credit Certificate (MCC) – is available to all first-time homebuyers in targeted counties in Idaho. In a nutshell, homebuyers can apply for a federal tax credit worth up to 35% of their mortgage interest paid per year, or up to $2,000.
It’s worth noting, the MCC is an actual tax credit to use toward any federal taxes you may owe and it can be rolled over for up to 3 years. You can keep applying for this tax break for as long as you occupy your home and make mortgage payments. You could end up saving tens of thousands of dollars over time.
To qualify for an MCC, you need to meet certain requirements on income limits, sales price limits, and first-time homebuyer status. You will be responsible for a $300 MCC application fee, which is paid to your lender at closing.
The IHFA encourages homebuyers to double up on programs. If you qualify for an IHFA home loan, check to see if you qualify for a second mortgage, forgivable loan or an MCC if these programs will help you with your home purchase.
The IHFA Mortgage Credit Certificate program has its own official page outlining the fine print and how to apply.
Homebuyer Programs by Location in Idaho
While Idaho’s statewide programs can help you obtain the keys to your first home, it’s important to peruse the local options available in cities, towns and counties, too.
These locally-run programs are a mixed bag – the majority are focused on helping any homebuyers who are from a lower-income bracket, whether you’re a first-time homebuyer or not. Read more for our complete rundown of local programs.
The Blaine County Housing Authority offers confidential and free financial counseling to homebuyers and homeowners. You can choose from one-on-one counseling for pre-purchase help, which prepares you for qualifying for a loan and managing a mortgage, to post-purchase counselling, which touches on securing home insurance, budgeting and avoiding delinquency. Read more about the BCHA counseling on its official website.
The county also provides homebuyer assistance to veterans – they can apply for down payment assistance, interest rate buy downs, coverage for moving costs and adapting homes for those with disabilities. Further details including contact information can be found here.
Are you shopping for a new home in Boise? Idaho’s capital city has the state’s largest selection of new homes to choose from with over 50 new communities. Homebuyers can enjoy plenty of natural surroundings in Boise, from its riverside paths winding through the city to the snow-capped Rocky Mountains creating a picturesque backdrop.
Boise runs a homeownership program for low- to moderate-income families, providing them with a second loan worth up to 25% of their home’s purchase price to help with the down payment. The second loan is set at a lower rate than the Idaho Housing and Finance Association’s posted prime rate and is amortized over 30 years.
To be eligible, you need to earn a maximum of 80% of the city’s area median income, and your home must be located within Boise’s city limits. You’ll need a credit score of 620 and your housing debt cannot exceed 35% of your gross income.
Fill out the application form, and if you meet the program’s requirements, the city will work with your primary lender on the next steps.
Check out the program’s full details on the City of Boise website.
Looking for a new home in South East Idaho? Pocatello, home to the University of Idaho, is also one of the largest cities in the state. The local NeighborWorks chapter operates a homeownership assistance program that’s helped more than 850 first-time homebuyers purchase a home since 1993.
For starters, the program is aimed at helping low-income homebuyers in Pocatello, Bannock and Madison Counties. You don’t have to be a first-time homebuyer, but you must contribute at least $1,000 or 1% of the sales price of your home – whichever is lower – to your purchase. You’ll need to complete the Finally Home homebuyer education course, as well.
Closing cost assistance is also available to first-time and repeat homebuyers. The same conditions apply.
Check out the full details on the NeighborWorks Pocatello website.
If your heart is set on buying a home in Lewiston, the city runs the Home Repair Program that may be helpful if your home purchase needs some sprucing up. Loans are worth up to $25,000 and they must be used to make renovations to your home from replacing the furnace, cooling systems or hot water heaters, to replacing single-pane windows with energy efficient ones or adding insulation throughout the home.
Homeowners can also apply for the funding to make adjustments to their home to accommodate family members living with a disability.
Those who are categorized as “extremely-low-income” homeowners may be eligible for a forgivable loan while homeowners who are classified as “low-income” can qualify for a 0% interest deferred loan which is only repaid when your sell or refinance your property. Finally, “moderate income” homeowners can apply for a low interest 3% deferred loan.
While this may not help first-time homebuyers initially, it’s worth keeping in your back pocket if you know you’ll need to make upgrades to your home once you’ve settled in.
Manufactured homes are included in this program, as long as the home is owned and within Lewiston’s city limits. You’ll also need to be current on your mortgage payments.
Check out the Home Repair Program’s full details, including income limits and how to apply.
Ready to Call Idaho Home?
Owning a piece of the Gem State is more affordable than you may think with these statewide and regional programs at your aid.
Whether you’re shopping for a home in Boise or scoping out properties across South East Idaho, there is no shortage of housing options. You can have your pick of property types too, from family-friendly homes in burgeoning communities to affordable townhouses in your local county.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.