Making Homeownership Affordable: Programs and Strategies for First-Time Buyers and Repeat Buyers

** Originally written for and published on UrbanAcres.com**

If you’ve noticed that first-time homebuyers seem a bit older these days, you’re not imagining things. The national average age has crept up to around 40—a full decade older than previous generations when they bought their first homes.

Here in Iowa, the story is a little different. The average age of first-time homebuyers using homeownership programs has held steady at 32 from 2021 to 2025, according to data from Iowa Finance Authority.

But between rising home prices, higher interest rates, and the challenge of saving for a down payment, getting into homeownership looks different than it used to.

While we can’t sugarcoat the challenges, we can share the resources and programs that are helping people achieve affordable homeownership in Johnson County and surrounding counties. Our REALTORS® are big proponents of giving everyone who wants to own a home access to the information and tools to make it happen.

Why Home Affordability is a Challenge Right Now

Home prices in the Iowa City area have increased significantly over the past several years. Johnson County is one of the most expensive places to live in Iowa, though Iowa ranks among the best states for housing affordability overall. Interest rates, while not at historic highs, are higher than the rock-bottom rates many people got used to during the pandemic years.

For many in the Corridor, student loan debt adds another layer of complexity, particularly in Iowa City and Coralville, where many residents have ties to the University. And trying to save for a down payment when rent, groceries, and utilities keep climbing? That’s a squeeze nearly everyone is feeling.

But these challenges aren’t insurmountable, especially when you know what resources are out there.

First-Time Homebuyer Programs You Should Know About

One of the biggest misconceptions about down payment assistance programs is that they’re only for low-income buyers. Jessica Greving, a loan officer at Residential Mortgage Network who works with Corridor homebuyers, says that’s simply not true.

Here are some of the programs she recommends for people buying their first home.

Iowa Finance Authority (IFA) Homebuyer Programs

At a Glance:

$2,500 grant available
Up to 5% of the purchase price for down payment/closing costs
Can pair with conventional loans for full down payment coverage
Income and price limits apply
Additional $5,000 grant available for veterans

IFA’s FirstHome Program is the largest program for first-time buyers in our area. It offers a $2,500 grant, or you can use up to 5% of your purchase price toward down payment assistance. That money can also be used for closing costs or prepaid expenses.

“People will do a conventional loan that requires a 3% down payment and pair it with IFA and get their full down payment covered—and this way they’re still getting a fixed-rate loan,” Jessica explained.

The program has specific eligibility requirements around income limits and purchase price limits, so you’ll need to work with an approved lender who’s familiar with the program. The homes you’re considering must also meet certain criteria. Your lender can walk you through all the specifics.

For veterans, IFA also offers an additional $5,000 grant for qualifying service. Combined with a VA loan, which has a lower interest rate, this grant can make your home significantly more affordable.

In 2025 alone, 26 Johnson County residents used the FirstHome Program to buy their first home, according to IFA.

“Many borrowers are often surprised to learn they qualify for an IFA program,” said Rhonda Kimble, Homeownership Director at IFA. “We hear this often, and in some cases, borrowers don’t discover their eligibility until they’ve already closed.”

IFA offers an Eligibility Quick Check tool that takes just a few minutes and can show you which programs you might qualify for.

FHA Loans

At a Glance:

Just 3.5% down required
More flexible credit requirements
Great for buyers building credit history
Not just for people with bad credit

Even though conventional loans get all the glory, FHA loans provide a great alternative for those with less-than-perfect credit or limited savings. But there’s a common misconception that FHA loans are only for people with bad credit.

“FHA is great for any homeowner, but particularly first-time homebuyers if they’re new to establishing credit,” Jessica said.

These loans require just 3.5% down and have more flexible credit requirements, making them accessible for buyers who haven’t had years to build extensive credit history.

USDA Rural Development Loans

At a Glance:

Zero down payment option
Available to repeat buyers, not just first-timers
Works in qualifying rural communities
Ask your lender if your target area qualifies

Exploring homes just outside of Iowa City or in counties surrounding Johnson County? USDA rural development loans offer zero down payment options, and they’re not just for first-time buyers.

If you’re looking at homes in cities like Tiffin, Washington, Wellman, Kalona, or other qualifying rural areas, this is a loan you’ll want to look into. Beyond the $0 down, these loans often have lower interest rates than conventional financing, which helps make your monthly payment more manageable.

Beyond the Loan: Strategies to Make Your First Home More Affordable

The programs above are powerful tools. But other strategic decisions can impact your ability to buy and what you can afford.

Reconsider Where You’re Looking

If your budget is around $200,000 and you’re set on living in Iowa City proper, you might be limiting yourself. The outlying communities in the Corridor often give you more house for your money.

This is when it’s beneficial to work with a local agent who’s familiar with these areas. We know which neighborhoods are on the upswing, where you can get more space, and which communities offer the lifestyle you’re looking for at a price point that fits your budget.