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Best First-Time Home Buyer Programs in Idaho

Are you facing financial challenges preventing you from buying your first home in Idaho? From the down payment to the mortgage, it’s not uncommon for new home buyers to think they can’t afford a house. Here we’ll unlock the mysteries surrounding affordable homeownership in Idaho.
Are you facing financial challenges preventing you from buying your first home in Idaho? From the down payment to the mortgage, it’s not uncommon for new home buyers to think they can’t afford a house. Here we’ll unlock the mysteries surrounding affordable homeownership in Idaho.

Do you panic when you think about buying your first home in Idaho? Aside from saving enough money for a down payment and closing costs, you’ll need to make your mortgage payments each month, pay for homeowners insurance, and make sure the state government gets its share in property taxes.

Don’t forget any maintenance, repairs or moving expenses you might incur. All this may seem like an impossible roadblock to drive through. Fortunately, it’s not.

If you’re ready to plant roots as a first-time home buyer in Idaho, now is a good time to buy. With its strong economy and low cost of living, the state is an affordable place to call home.

Along with low mortgage interest rates, the state offers several programs that can help you with your down payment and help you pay for closing costs. Let’s look at some of your cost-saving opportunities.

Idaho Programs for First-Time Home Buyers

The Idaho Housing and Finance Association, in partnership with private lenders, offers home loans for new home buyers with interest rates as low as 4.25% and assistance with down payments and closing costs. The IHFA also may lower or waive your homeowner’s insurance requirement.

If you need help with your down payment or closing costs, the IHFA offers a Good Credit Rewards program. If you have a good credit score (640 or higher), you can get a second mortgage for the lesser of $8,000 or 2.5% of the home’s value to help with your down payment and closing costs.

However, you must pay .5% of your own money toward the first mortgage. You also need to show you only have liquid assets that total the lesser of three months income or $5,000.

The association also allows you to claim 35% of the interest you pay on your mortgage as a tax credit. You can claim the credit every year until you pay off your mortgage. However, you must pay a one-time, upfront fee of $300 to your lender.

Some of the loans do require you to participate in the Finally Home! education program if you’re a new homeowner. Also, be prepared to take a financial counseling course. Fortunately, the state offers several free classes.

Learn More: 10 First-Time Home Buyer Programs to Look Into

Federal First-Time Home Buyer Programs

Contrary to popular belief, the federal government doesn’t offer mortgages that are specific to first-time homebuyers. However, it does offer federally-insured home loans that benefit low-income borrowers and new homeowners.

Mortgages backed by the Federal Housing Administration (FHA) and programs provided by the United States Department of Agriculture (USDA) are a good starting point for new home buyers.

FHA Loans

The Federal Housing Administration is a division of the Department of Housing and Urban Development that offers home loan programs for lower-income Americans. This is a popular option for many first-time homebuyers.

Mortgages backed by the agency typically offer down payments as low as 3.5% and competitive interest rates. Also, the FHA only requires a minimum credit score of 580 to qualify for the 3.5% down payment option.

In some cases, you can qualify for financing with scores as low as 500. In this instance, the down payment requirement is 10%.

However, the FHA doesn’t provide financing. It only provides insurance to private lenders in case you default on your mortgage. Therefore, you must apply for an FHA loan directly through banks and lenders approved by the agency.

USDA Loans

With its flexible credit requirements and do down payment options, the USDA is an excellent, but often overlooked, resource for first-time home buyers. This agency does more than help with the nation’s farming and agriculture.

What many Americans don’t know is the USDA offers low-to-no cost mortgages for people who live in designated rural areas (you’d be surprised what the USDA designates as rural).

You can apply for a direct home loan where the USDA provides the financing for your house, or you can apply for financing through a lender with the backing of the USDA.

To qualify, you need to show the department you’re in desperate need of a home loan and you can’t get a conventional mortgage because of bad credit, no down payment, or income restrictions. Other restrictions apply, so use the USDA’s handy eligibility tool to see if you qualify.

Learn More: The Complete Guide to FHA Loans by State

Private Lender Programs in Idaho for First-Time Home Buyers

Mortgage lenders throughout Idaho offer home loans established by Fannie Mae and Freddie Mac. These two government-sponsored enterprises work to keep the nation’s housing market stable by buying mortgages from private lenders. Here are two of their programs that can help you as a first-time home buyer in Idaho.

The HomeOne Mortgage Program by Freddie Mac

The HomeOne Mortgage is for first-time home buyers who can’t qualify for a conventional mortgage. The down payment requirement is 3% of the purchase price, and you only need one co-applicant to have a qualifying credit score. An added benefit is the program has no income restrictions (making a decent income doesn’t prevent you from qualifying).

The HomeReady Mortgage Program by Fannie Mae

The HomeReady Program offered by Fannie Mae is for low-to-moderate income Americans and first-time home buyers experiencing challenges qualifying for a conventional mortgage. The down payment requirement is 3%, and the minimum qualifying credit score is 620.

Unlike FHA loans, you can cancel your mortgage insurance once you’ve established 20% equity in your home. You can also receive gifts and grants from multiple sources to help pay closing costs and your down payment.

Learn More: 7 Easiest Mortgage Lenders for First-Time Home Buyers

Why First-Time Home Buyers Need an Agent in Idaho

Finding a new home that meets your needs financially and esthetically isn’t easy if you have no experience in real estate.

You might think you can find the best deal by using all the resources available online. The truth is, no online resource replaces the value an experienced agent brings to the closing table.

Buying your first home is all about saving money, so you need an expert agent who knows what’s going on with the housing market in Idaho. An expert agent, like our top-rated Idaho Clever Partner Agents, will find you a house that you can genuinely afford in a desirable neighborhood. Our expert Partner Agents know how to properly evaluate properties and time the market just right to find you the best home at the best price.

Contact Clever Real Estate today and learn how you can save up to 1% of the purchase price when you choose one of our Partner Agents.

Learn More: How to Get a Home Buyer Rebate

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