First-Time Home Buyer Programs In Idaho For 2023

Idaho has a lot more to offer than just potatoes. This western state is filled with gorgeous mountainous scenery and boasts a rich agricultural community with a reasonable cost of living. Whether you already live in this beautiful state, or you’ve been considering moving out west to buy your first home, Idaho is a great place to consider planting your roots.

If you don’t know much about buying a house in Idaho – or have never been there at all – you may not know where to start looking for a home, or what resources may be at your disposal to help you. This guide is here to answer your questions. Let’s talk about Idaho’s real estate market, programs offered there to first-time home buyers and what you need to know before starting your house hunt.

Idaho First-Time Home Buyer Assistance And Loan Programs

If you’ve never bought a house before or haven’t lived in a home that you own for the past 3 years, you’re considered a first-time home buyer. First-time home buyers often qualify for assistance, grants and other perks intended to help make homeownership more accessible across the U.S.

Idaho, like many states, has a few programs available to help first-time home buyers finance their purchase. Through groups like the Idaho Housing and Finance Association (IHFA), you may qualify for down payment assistance, low interest rates, home buyer education and even counseling.

Let’s explore a few benefits you could potentially take advantage of, should you decide to take the leap and buy a home in Idaho.

Idaho Housing Home Loans

First, we’ll talk abut loan products you can potentially take advantage of. To qualify for the following benefits, you’ll typically need to be both a first-time home buyer and you will have to fall within certain income, debt-to-income (DTI) and minimum credit score requirements. For more details on what you may need to reap the rewards of these programs, visit the IHFA website.

First Loan

The first product you may consider researching is the Idaho Housing First Loan program. Through the IHFA, you may qualify for a loan through a participating lender that has low rates, low mortgage insurance and down payment assistance. To get one of these discounted loans, you will need to buy in an eligible Idaho county, fall within the income restrictions and stick to the specified home purchase range. This loan program can be used with FHA and USDA loans as well, though your lender may have additional requirements of you in this case.

For more information on qualifying for a First Loan product, check out the IHFA income requirements on their site.

Idaho Heroes Loan

This program offers low-interest rate loans with flexible requirements to law enforcement officers, firefighters, paramedics, EMTs, nurses and teachers.

Unlike the First Loan program, you don’t have to be a first-time home buyer to qualify for a Heroes Loan. With this program, in addition to low rates, you can also get up to 7% of your home’s sale price in combined assistance for your down payment and closing costs.

To see more information and whether or not you may qualify, visit the IHFA’s Heroes Loan page.

Idaho Housing Closing Cost And Down Payment Assistance 

The IHFA offers closing cost and down payment assistance in almost all of its programs, but it doesn’t do so through grants. Let’s talk about the ways you’ll receive assistance, should you apply for a loan through Idaho Housing.

Second Mortgage

One of the means through which IHFA offers down payment assistance is through a second mortgage. To finance your down payment or closing costs, you may take out a second mortgage that you will pay for alongside your primary one. This can be helpful to buyers who cannot afford to make a large down payment upfront and would rather finance it. Idaho Housing offers second mortgages at a fixed interest rate of 7% over 15 years.

Forgivable Loan

The second way you might access down payment assistance is via a forgivable loan. A forgivable loan is a 0% interest loan that will be gradually forgiven over time. Depending on how much assistance you receive, your primary mortgage’s interest rate will rise. The rate will typically go up 0.125% for every 0.5% of forgivable loan utilized.

Additional Idaho Home Buyer Programs

If you’re unsure if the programs we listed above will work for you, don’t worry – there are still other options to make buying a house in Idaho easier for you. Let’s review a few other opportunities you may have at your disposal.

Mortgage Credit Certificate (MCC) 

The mortgage credit certificate program (MCC) allows home buyers to claim a federal tax credit for a portion of the mortgage interest they paid per year, up to $2,000. This benefit is offered across the country by state and local housing finance authorities, like the IHFA in this case.

To qualify, you’ll need to be a first-time home buyer, meet the program’s income and purchase price restrictions and you’ll need to be using the property you’re purchasing as a primary residence, meaning you must live in it for a majority of the year. To learn more about this benefit, visit the National Council of State Housing Agencies (NCSHA) website.

Finally Home!® Buyer Education Course

Finally Home!^® is an online or in-person home buying education course designed to teach first-time buyers the ins and outs of homeownership, budgeting and what loans may be available to them. Some lenders and housing authorities may recommend that buyers take the course. It’s only $50 – $70 to complete and is filled with real world advice and tips that can help buyers for a lifetime. Plus, the program comes with HUD-approved counseling and support, so if you think of questions, there are experts to help you out.

Completing the course is a great idea for any home buyer, whether it’s your first time buying a house or not. Finally Home!^® makes sure you go into the buying process knowing exactly what to expect, from loan types that could benefit you to the costs of closing. When it comes to making any big purchase, it’s always a good idea to do your research to save money and avoid being surprised by unexpected costs.

Idaho First-Time Home Buyer Savings Account

The Idaho First-Time Home Buyer Savings Account is a savings account offered to Idaho residents through participating banks and credit unions. This account is meant to help residents save for a house by offering a variety of money-saving perks, such as:

• No minimum deposit to open the account
• No monthly service charges or transaction fees
• Free withdrawals for home costs
• Dividends that are compounded and credited quarterly
• Idaho State tax deduction when funds are used for home costs

Unfortunately, if you’re an out-of-state buyer, you won’t be able to take advantage of one of these accounts – they’re for current Idaho residents (as of the previous year) only.

National First-Time Home Buyer Assistance And Loan Programs

Beyond all the Idaho-specific opportunities, there are also national programs and loans intended to help first-time home buyers that you may want to look into, especially if you can’t qualify for IHFA options. These include: 

• FHA loans: FHA loans are nonconforming loans backed by the Federal Housing Administration (FHA). These loans offer low minimum down payment requirements, low interest rates and less strict credit score requirements. These loans also don’t require you to pay private mortgage insurance (PMI), though you will have to pay a mortgage insurance premium instead.
• VA loans: VA loans are also nonconforming loans. These government loans are backed by the U.S. Department of Veterans Affairs (VA) and are intended to make buying a home more affordable for veterans and qualifying active-duty service members and surviving spouses. If you are eligible for one of these loans, you can take advantage of low interest rates and a 0% minimum down payment requirement.
• USDA loans: USDA loans are loans backed by the U.S. Department of Agriculture Rocket Mortgage^® isn’t accepting USDA loan applications at this time.
• Conventional loans: Briefly discuss how the reader can use a conventional loan backed by Fannie Mae or Freddie Mac to secure financing.

FAQs About First-Time Home Buyers Programs In Idaho

Still have more questions about buying a home in Idaho? Here are a few commonly asked questions and their answers to hopefully help you clear up any confusion.

Can I buy a home in Idaho with no down payment?

Technically yes. If you buy a home with a VA or USDA loan, you don’t need to make a down payment on your loan. You can also potentially use a second mortgage to finance a down payment so you don’t have to pay for it all at once upfront, but keep in mind you will still be paying for a down payment this way, just over a longer period of time – and with interest.

Are there first-time home buyers grants available in Idaho?

The IHFA doesn’t offer grants to first-time home buyers, but there may be federal grants you can obtain via the U.S. Department of Housing and Urban Development (HUD). Check their website to research any offerings they may currently have for eligible buyers.

How much are closing costs in Idaho?

Closing costs are the fees and charges that buyers pay during the final step of their real estate transaction. These costs include things like your application fee, attorney fees, mortgage insurance and title insurance. According to the most recent data from mortgage tech company ClosingCorp, the average price of closing costs in Idaho is $4,082.

How do Idaho first-time home buyer programs work?

If you’re confused on where to start with all the resources in front of you, don’t panic – it’s as easy as following the steps below:

1. Take the Finally Home!^® Buyer education course: It’s a good idea to take a home buying education course anyway, but in order to qualify for many IHFA programs, it will be required. You can sign up online on the Finally Home!^® website.

2. Find an approved lender: If you want to take advantage of a program offered by the IHFA, you’ll have to work with a lender that works with them. The IHFA can help you find a participating lender on their site. In addition to finding a lender, you should also find a reputable real estate agent or REALTOR^®. A good real estate agent can help you find the perfect home and walk you through the home buying process as well as negotiate on your behalf.

3. Submit an offer on a house: Once you and your agent have found a house you’d like to make an offer on in an eligible area, your agent can help you negotiate an offer for your dream home. 

4. Close on the mortgage: If your offer is accepted, all that will be left to do is close on the loan. There may be additional documents or requirements needed for the underwriting process if you’re working with IHFA benefits, which your lender will explain and provide insight on.

The Bottom Line: Idaho First-Time Home Buyer Programs Could Save You Money

Buying a house in Idaho or any other area of the country can seem overwhelming when you’re doing it for the very first time. Luckily, there are plenty of programs designed to help you save money and time along the way.

Ready to get started on your home buying journey? Fill out an application online with Rocket Mortgage® and get started today.