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2022 Idaho First-Time Homebuyer Programs
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If you’re looking to buy your first house in Idaho, the state offers several programs to help you afford your new purchase. We’ll go over some of the major statewide first-time homebuyer programs you may find as you search for a loan. Keep in mind that you will often have to meet eligibility standards, and some programs may require you to live in your new home for a certain period of time in order to avoid penalties or repayment.
Idaho statewide and local first-time homebuyer programs
Idaho has a few statewide first-time homebuyer programs, including down payment assistance. To be able to access the assistance, you may need to take out a first mortgage through the Idaho Housing home loan program.
| Program name | Assistance amount | Assistance type | Where it’s available |
|---|---|---|---|
| Idaho Housing home loan | Subject to loan limits set by county | First loan with low down payment and interest rate | Statewide |
| Second Mortgage | Up to 5% of home purchase price or value | Loan for down payment and closing cost assistance | Statewide |
| Forgivable Loan | Up to 5% of home purchase price or value | Forgivable loan for down payment and closing cost assistance | Statewide |
| Homebuyer Tax Credit | Up to $2,000 per year | Federal tax credit | Statewide |
What to know about different types of down payment assistance
Down payment assistance may come in one of several different forms, depending on the program and the organization offering it. Commonly, you’ll run into the following:
- Grants. Grant money is given to you that doesn’t need to be paid back — provided you meet specific requirements. Grants may be based on a percentage of the home sales price.
- Second mortgages. These are loans in addition to your mortgage that you can use to help pay for your down payment and closing costs. You may need to make monthly payments, or the loan may come due when you sell or refinance your home. The latter type is known as a “soft second.”
- Forgivable loan. Forgivable loans are a type of second mortgage, but the balance is reduced over time until you no longer owe the money back. This typically happens over a period of a couple of years to several years. If you sell or refinance the home, any money not forgiven must be repaid.
Idaho’s down payment assistance comes as either a second mortgage or forgivable loan. The second mortgage option must be paid back with monthly payments over 10 years at a 5% interest rate. The forgivable loan can be reduced to zero over 10 years, at a rate of 10% of the loan per year, and the balance isn’t due until you sell or refinance the home.
How Idaho first-time homebuyer programs work
The process of qualifying for a first-time homebuyer program in Idaho is similar to that of a mortgage in any other situation — with a few additional steps. Here’s the basic process, as prescribed by Idaho Housing. Keep in mind, you may need to live in the home for nine or 10 years to avoid penalties or repayment, depending on your program.
Step 1: Take a homebuyer education course
A homebuyer education course is required in most cases for Idaho’s first-time buyer programs. The state offers a course called Finally Home! Homebuyer Education, which is available online or in person numerous times throughout the year at seven regional sites. The Finally Home! course covers the types of mortgage loans available, budgeting and planning for housing expenses and the process of buying a home.
Step 2: Find an approved lender
Only approved lenders are able to take part in Idaho’s statewide first-time homebuyer programs. You can search for options in your area on the Idaho Housing website. Find a few lenders that may work, and contact a loan officer to see if they can prequalify you for an Idaho Housing first mortgage. You will be able to compare loan offers to see where you might get the best deal.
Step 3: Look for a home
You can start your house hunting by making a list of qualities you’re looking for in a home, such as the number of bedrooms or proximity to your work. Consider hiring a realtor who can help you find homes that might fit the bill and guide you through the process of making an offer.
Step 4: Close on your loan
Once your offer has been accepted, you can settle in on an approved Idaho Housing lender and work with your loan officer to complete your formal application. Your lender will ask for documentation of your income and assets, verifying that you can afford the loan and meet all the requirements. You may have a few extra documents to sign and fees to pay to participate in some programs, such as the Homebuyer Tax Credit. Once you’ve gone through this underwriting, you’ll be ready to close on the mortgage and get the keys to your new home.
Idaho first-time homebuyer program requirements
Each first-time homebuyer program has its own requirements, such as credit score minimum and debt-to-income (DTI) ratio maximum, to qualify. Here’s a quick rundown of what you’ll need to be approved.
| Program name | Credit score minimum | DTI ratio maximum | Maximum income limit | How long you have to live in the home |
|---|---|---|---|---|
| Idaho Housing home loan | 620 | 50% | $125,000 in most counties; $135,000 in Blaine County | N/A |
| Second Mortgage | 680 in most cases; 640 if using the First Loan; waived for eligible borrowers | 50% | $125,000 in most counties; $135,000 in Blaine County | N/A |
| Forgivable Loan | Not specified | 50% | $125,000 in most counties; $135,000 in Blaine County | 10 years for full loan forgiveness |
| Homebuyer Tax Credit | Not specified | 50% | Varies by county | 9 years to avoid “recapture tax” |
THINGS YOU SHOULD KNOW
Like many states, Idaho’s first-time homebuyer programs have income limits your household must fall within to be eligible. This limit for most programs is $125,000, with the exception of Blaine County (home to the Sun Valley ski resort). In Blaine County, the household income limit is $135,000.
For the Homebuyer Tax Credit program, the income limits vary by county and household size. The limit can be as low as $69,000 for a one- or two-person household in some counties to as high as $106,960 in Teton County.
Some first-time homebuyer programs you come across may have income limits based on the area median income. You can look up your area’s median income through the Department of Housing and Urban Development’s lookup tool.
National first-time homebuyer programs
If you take out an Idaho Housing first loan, you’ll typically get a mortgage through one of the four primary mortgage programs: conventional, FHA, VA or USDA loans. You’ll generally need to qualify for a loan through one of these programs in addition to meeting all the requirements for assistance discussed above. These loans aren’t just for first-time homebuyers, but first-time buyers can take advantage of them to finance a home.
→ Conventional loans. Conventional loans are loans that aren’t part of any government program. They usually require that the borrower have a credit score of at least 620 and may offer down payments as low as 3%. Usually, you will need to pay for private mortgage insurance with less than a 20% down payment.
→ FHA loans. These loans are insured by the Federal Housing Administration, which gives lenders confidence to make loans to people with low down payments and lower credit scores. You can qualify for a down payment as low as 3.5% with a credit score of 580 or for a down payment of at least 10% with a score as low as 500. Because of these more lenient requirements, FHA loans are a popular choice for first-time buyers.
→ VA loans. VA loans are a benefit for military service members and veterans. The program is run through the Department of Veterans Affairs and offers qualified borrowers the ability to buy a home with no down payment. There’s also no specific credit score required. Instead, lenders will review your entire financial situation to make sure you can afford the loan.
→ USDA loans. USDA loans are designed to help low- and moderate-income families buy homes in rural areas. These loans, offered through the U.S. Department of Agriculture, do not require down payments, but you must meet income limits to be approved.
FAQs about Idaho’s first-time homebuyer programs
Who qualifies as a first-time homebuyer in Idaho?
A first-time homebuyer is defined by the U.S. Department of Housing and Urban Development as someone who has not had an ownership interest in their primary home in the past three years. You may still qualify if you owned a home with a spouse you are no longer married to or if you owned a vacation or investment property.
Can I qualify for down payment assistance in Idaho?
In most cases, you may qualify for down payment assistance if your household income is up to $125,000. You may also need a credit score of 640 or 680 to qualify, depending on your assistance program.
How much of a down payment do I need to buy a house in Idaho?
Idaho offers down payment assistance that can cover most of the payment required to buy a home. However, you will still need to put down at least 0.5% of the purchase price using your own money. On a $200,000 house, this equates to a down payment of $1,000.
Home price trends in Idaho’s major areas
Median home prices in most of Idaho fall between $150,000 and $300,000, according to data from the National Association of Realtors (NAR). However, prices are rising fast — by 18% to 20% or more over the past year, in fact. In Ada County, home to the state’s capital, prices have risen 25% over the past year, to a median home price of $452,219. That equates to a typical monthly mortgage payment of $1,716, up from $1,413 a year earlier, according to the NAR data. In Blaine County, home prices have risen 18.5%, to a median of $543,640. This translates to a monthly mortgage payment of $2,063, up from $1,792 a year ago.