Polk County offering interest-free deferred down payment loans for low-income homebuyers

Philip Joens, Des Moines Register
·2 min read
Homes built by Habitat for Humanity in Des Moines.
Homes built by Habitat for Humanity in Des Moines.

With Des Moines metro home prices rising more than 25% in the past five years and median mortgage interest rates more than doubled since 2021, Polk County is offering a helping hand to low-income families seeking make down payments on home purchases.

The $5 million program will provide eligible homebuyers a 0% interest rate on a $30,000 deferred loan for a home down payment. In a new release, the county said the loans won't have to be repaid until the home is sold, is no longer the buyer's primary residence, or in some instances, when the home is refinanced.

That down payment loan will be paired with a fixed-rate mortgage from more than a dozen participating lenders, including the Neighborhood Finance Corp., which will administer the fund. Funding for the program comes from the county's share of American Rescue Plan Act money, said Polk County spokesperson Jonathan Cahill.

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Prospective homebuyers should apply through their participating mortgage lender to receive the $30,000 deferred loan, Cahill said in a news release. The program will last as long as funds are available, according to the release.

How do homebuyers qualify for the down payment help?

To be eligible, prospective buyers must:

  • Have an annual household income at or below 80% of the area median income.

  • Plan to occupy the property.

  • Not own another property when the sale closes.

  • Complete an eight-hour homebuyer education program prior to closing on the loan.

  • Obtain an eligible fixed-rate mortgage through a participating lender.

  • Arrange a home inspection by a licensed inspector or a property evaluation by an approved nonprofit.

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For people interested in the program, 80% of the adjusted median income of Polk County is, for a family of:

  • One, $55,200.

  • Two, $63,050.

  • Three, $70,950.

  • Four, $78,800.

  • Five, $85,150.

  • Six, $91,450.

Polk County Supervisors Chair Tom Hockensmith said in the release that ensuring quality affordable housing is the primary goal of the program.

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"The commitment of $5 million will give numerous families, who might not otherwise have the opportunity, to take that important first step toward home ownership," Hockensmith said in the release. "We are confident in the ability of Neighborhood Finance Corporation to help ensure that goal becomes a reality.”

Which lenders are participating in the program?

In addition to Neighborhood Finance, participating lenders are:

  • Availa Bank.

  • Bankers Trust.

  • CMG Mortgage.

  • Community State Bank.

  • Fairway Mortgage.

  • Fortress Bank.

  • Guild Mortgage.

  • Habitat for Humanity.

  • Iowa State Bank.

  • Key Mortgage Group.

  • Lincoln Savings Bank.

  • New American Funding.

  • Northwest Bank.

  • Two Rivers Bank & Trust.

  • US Bank.

  • Veridian Credit Union.

Philip Joens covers retail, real estate and RAGBRAI for the Des Moines Register. He can be reached at 515-284-8184, pjoens@registermedia.com or on Twitter @Philip_Joens.

This article originally appeared on Des Moines Register: Low-income Polk homebuyers eligible for no-interest down payment loans