Idaho First-Time Homebuyer Guide

The process of buying a home for the first time in Idaho can be challenging, especially if you don’t know where to start. Fortunately, there are many resources available to help you navigate the process and find the perfect home for your lifestyle. By learning the local real estate market, setting a realistic budget, and enlisting the help of a reputable agent, you can be well-prepared to make a smart purchase decision in the Gem State.

The state of Idaho offers first-time homebuyers several programs that can make homeownership more accessible and affordable. These include discounted mortgage rates, down payment assistance programs, and homebuyer education courses. These programs can also be combined with FHA, VA, or USDA loans to offer prospective buyers even more competitive financing options.

While there is no minimum income requirement to buy a home in Idaho, it is important to understand various loan programs’ different requirements and eligibility criteria. To make an informed decision, it is a good idea to consult with a trusted loan officer from NAF and discuss your unique financial situation and goals.

Idaho Housing and Finance Association (IHFA) Programs

1.1 First Loan

The First Loan program is particularly beneficial, offering competitive fixed interest rates and down payment assistance

• Description: Offers competitive fixed interest rates and down payment assistance.
• Eligibility:
  • Minimum credit score of 640.
  • Income limits vary by county and household size.
  • Must complete a homebuyer education course.
• Benefits:
  • Low fixed interest rates.
  • Up to 3.5% down payment assistance.

1.2 Second Loan

In conjunction with the First Loan program, IHFA‘s Second Loan provides additional support for down payment and closing costs.

• Description: Provides down payment and closing cost assistance.
• Eligibility:
  • Must be used in conjunction with the First Loan program.
  • Income limits and credit requirements as per First Loan.
• Benefits:
  • Up to 3.5% of the purchase price for down payment and closing costs.
  • Only interest or payments once the home is sold or refinanced.

Federal Programs Available to Idaho Residents

2.1 Federal Housing Administration (FHA) Loans

Federal programs also play a crucial role in assisting Idaho’s first-time homebuyers. FHA Loans, backed by the Federal Housing Administration, are popular. These loans have lower down payment requirements, starting as low as 3.5%, and are accessible to buyers with credit scores of at least 580.

• Description: Government-backed loans with lower down payment requirements.
• Eligibility:
  • Minimum credit score of 580 for 3.5% down payment.
  • Debt-to-income ratio below 43%.
• Benefits:
  • Low down payment (as low as 3.5%).
  • Flexible credit requirements.

2.2 Veterans Affairs (VA) Loans

VA Loans offer significant benefits for veterans and active-duty service members, including no down payment, no private mortgage insurance, and competitive interest rates.

• Description: Loans for veterans, active-duty service members, and their families.
• Eligibility:
  • Must be a veteran, active-duty service member, or eligible surviving spouse.
  • Valid Certificate of Eligibility (COE).
• Benefits:
  • No down payment required.
  • No private mortgage insurance (PMI).
  • Competitive interest rates.

2.3 United States Department of Agriculture (USDA) Loans

The USDA Loans, aimed at rural homebuyers, provide another excellent option. With no down payment requirements and low interest rates, they make homeownership more attainable in Idaho’s less urban areas.

• Description: Loans for rural homebuyers with low to moderate incomes.
• Eligibility:
  • Must meet income eligibility requirements.
  • Home must be in an eligible rural area.
• Benefits:
  • No down payment required.
  • Low interest rates.
• Local and Additional Programs

3.1 Mortgage Credit Certificate (MCC) Program

The Mortgage Credit Certificate (MCC) Program provides a federal tax credit for a portion of the mortgage interest paid annually, which can substantially reduce your federal income tax liability. This program is available to first-time homebuyers or those who last owned a home in the last three years and meets specific income and purchase price limits.

• Description: Provides a federal tax credit for a portion of the mortgage interest paid annually.
• Eligibility:
  • Must be a first-time homebuyer or not owned a home in the last three years.
  • Income and purchase price limits apply.
• Benefits:
  • Reduces federal income tax liability.
  • Increases take-home pay, potentially qualifying you for a larger mortgage.

3.2 HOME Investment Partnerships Program

Local programs such as the HOME Investment Partnerships Program offer funds to local governments and non-profits to assist low-income families with down payment, closing costs, and home rehabilitation. These programs are designed to ensure that even the most financially vulnerable can achieve homeownership.

• Description: Provides funds to local governments and non-profits to help low-income families.
• Eligibility:
  • Must meet income limits.
  • Must be used for home purchase or rehabilitation.
• Benefits:
  • Assistance with down payment and closing costs.
  • Funds for home rehabilitation and improvements.
• Homebuyer Education and Counseling

4.1 Finally, Home!® Homebuyer Education

Education is another critical component of the homebuying process. The IHFA’s Finally Home!® Homebuyer Education course is a comprehensive resource available to all first-time homebuyers. This online and in-person course covers the entire homebuying process, financial management, and home maintenance, ensuring buyers are well-prepared for homeownership. HUD-approved housing counseling agencies also provide personalized financial advice, budgeting assistance, and guidance on selecting the right mortgage product and assistance programs.

• Description: IHFA offers a comprehensive homebuyer education course.
• Eligibility: Open to all first-time homebuyers, required for some IHFA programs.
• Benefits:
  • Online and in-person options available.
  • Covers the entire homebuying process, financial management, and home maintenance.

4.2 Housing Counseling Agencies

• Description: HUD-approved agencies provide counseling and education.
• Eligibility: Open to all prospective homebuyers.
• Benefits:
  • Personalized financial advice and budgeting assistance.
  • Guidance on selecting the right mortgage product and assistance programs.

By leveraging these programs and resources, first-time homebuyers in Idaho can achieve their dream of homeownership with greater confidence and financial security. Prospective buyers should always check with the Idaho Housing and Finance Association and other relevant agencies for the most current information and eligibility requirements. With the right support, the journey to owning your first home can be a smooth and rewarding experience.