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.
Think About Property Type
A condo or townhome might give you access to a location or amenities that would be out of reach with a single-family home. There’s no one ‘right’ kind of first home—the best option is the one that fits your life and budget.
Choosing a property with an HOA can also free up your weekends by taking exterior maintenance and snow removal off your plate. You can enjoy the perks of homeownership without the pressures of yard work or roof repairs.
Get Pre-Approved Early
This is a strategy Jessica recommends to all buyers.
“You should start thinking about your house-hunting budget and putting a number on it even sooner than you think,” she said.
Getting pre-approved tells you your real buying power and helps you shop with confidence. It also gives you time to address any credit issues before you find the perfect place. Knowing your exact budget prevents the heartbreak of falling in love with a home you can’t afford.
Speaking of credit, if you’re worried about your credit score or you haven’t established much credit history yet, talk to a lender anyway. Credit is one of those barriers that feels impossible, but it’s more manageable when you’re partnering with someone who can give you a clear roadmap. Waiting for the ‘perfect’ score can sometimes mean missing out on current interest rates or building equity.
If This Isn’t Your First Rodeo: Options for Repeat Buyers
Already own a home but wondering how to make your next move possible? You have options, too.
Your equity is an asset. If you’ve built up equity in your current home, you can use it toward your next down payment. Bridge loans can help coordinate timing if you need to buy before you sell, or you might negotiate a rent-back agreement with your buyer to give yourself breathing room between closing dates.
For repeat buyers with strong credit, conventional loans often require a lower down payment. VA loans remain an excellent option for qualifying veterans, especially for repeat buyers with money to put down.
Another thing worth considering: Sometimes the smartest move is downsizing or rightsizing. Maybe you don’t need as much space as you once did, or maybe moving to a nearby community with lower costs makes more sense for this season of life. You can stay in the Corridor, stay connected to what you love about living here, and reduce your monthly costs at the same time.
Let’s Talk About That Monthly Mortgage Payment
One common hurdle Jessica’s buyers face is the payment shock of jumping from rent to a mortgage. If you’re going from $1,500 in rent to a $2,000 mortgage payment, that can feel like a lot.
“I always tell buyers that if they’re feeling nervous about that increase and they talk to a lender soon enough, they’ll know what their mortgage payment is going to be every month,” said Jessica.
“When you make your rent payment, take that amount of money, set it aside and start living like that, and see how it makes you feel.”
And while we’re at it, let’s clear up another myth: You don’t need 20% down to buy a home. That’s an outdated benchmark that keeps a lot of people on the sidelines longer than necessary. Putting 10% or 20% down often won’t have a major impact on your monthly payment compared to smaller down payments.
Let’s say you’re buying a $400,000 home with a 7% interest rate:
With a 10% down payment, or $40,000 down, you’d be looking at:
- A $360,000 loan
- $2,395 monthly principal and interest
- ~$150/month Private Mortgage Insurance (PMI)
- Total monthly payment (estimated): $2,545
Put 20% down ($80,000), and your numbers would look like this:
- A $320,000 loan
- $2,129 monthly principal and interest
- ~$0/month Private Mortgage Insurance (PMI)
- Total monthly payment (estimated): $2,129
That’s a difference of $416 a month. It sounds like a lot, but when you consider not having to come up with an extra $40,000 up front, it’s more attainable for most people.
Why Your Local REALTOR® Matters
Our agents are well-versed in these programs. We know which lenders in the area are most knowledgeable about IFA programs, who’s great with VA loans, and which communities qualify for USDA financing. We connect our clients with trusted local professionals so you have the right resources in your corner.
Why do we recommend local lenders? Because they usually offer competitive rates with significantly lower closing costs than big national banks. They’ve built relationships with agents throughout the Corridor, which can simplify the transaction. And if you’re new to the area, working with a local lender gives you another connection to the community.
Lean on Your Resources
Affordable homeownership in 2026 looks different than it did when your parents bought their first home. But the programs we’ve outlined here exist to help people in all financial situations achieve homeownership.
If you’re worried you don’t know enough about the process, that’s okay! That’s what we’re here for. And we never want to pressure you into buying a home. Our job is to empower you with information so you can understand your options and find a home that checks all your boxes.
Just reach out to us! We’ll help you create a plan so that when you’re ready to move, the financial pieces are already in place.
Many of our agents are Iowans by birth, and we’re all Iowans by choice. We want to see everyone who calls this community home get the chance to own a piece of it!
