Buying a House in Iowa: Everything You Need to Know in 2025
If you are considering buying a house in Iowa, you are not alone. Many people are realizing the benefits of owning a home in the Hawkeye State. This guide will help you, whether you are a first-time buyer, moving from another state, or looking to qualify with less-than-perfect credit. You will find everything you need to know.
Why Buying a House in Iowa Makes Sense in 2025
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Buying a house in Iowa means settling in a state with affordable homes, a low cost of living, safe neighborhoods, great schools, and all four seasons. Iowa’s average home price in 2025 is about $217,000, which is still below the national average. That makes it one of the best-value states for homeownership.
Iowa also has a strong economy, with growing industries like agriculture, manufacturing, finance, and renewable energy. Plus, it has one of the country’s highest high school graduation rates.
Ready to Buy Your First Home in Iowa? Let Us Help You Get Started
From down payments to first-time buyer programs, we’ll guide you every step of the way.
What You Need to Buy Your First Home in Iowa
If you’re buying a house in Iowa for the first time, here’s a quick list of what you’ll typically need:
- Steady income (W-2, 1099, or self-employed options available)
- Proof of employment or consistent deposits
- A down payment (ranges from 0% to 20%, depending on loan type)
- Acceptable credit (FHA loans go as low as 500)
- Pre-approval letter from a mortgage lender
Good news: You don’t need perfect credit to buy a home in Iowa. At Gustan Cho Associates, we specialize in helping people who’veturned down by other lenders.
Iowa Homebuyer Programs and Local Perks
Knowing about local resources can help when buying a house in Iowa. The Iowa Finance Authority (IFA) offers programs that help first-time and repeat buyers with down payment assistance, grants, and reduced mortgage rates.
Popular options include:
- FirstHome Program – Low-rate mortgages with down payment assistance
- Homes for Iowans – For repeat buyers who meet income limits
- Military Homeownership Assistance – $5,000 for eligible service members
Credit Score Requirements to Buy a House in Iowa
One of the most common questions we get is: “Can I buy a house in Iowa even if my credit is bad?” The answer is yes! At Gustan Cho Associates, we have mortgage options that don’t require a perfect credit score. We can help folks with credit scores as low as 500 FICO.
Here’s how it breaks down:
- FHA Loans: 580+ for 3.5% down; 500-579 with 10% down
- VA Loans: No minimum score required (must be an eligible veteran or spouse)
- Non-QM Loans: 500+ credit allowed with flexible guidelines
If you’re worried about your score, we’ll help you put together a plan to improve it and still move forward with buying a house in Iowa.
Best Mortgage Options for Buying a House in Iowa
Let’s look at loan programs that can help you qualify in 2025:
1. FHA Loans
FHA loans are an excellent option for first-time homebuyers, offering a low down payment requirement of just 3.5%. These loans also cater to those with credit scores as low as 500, making homeownership more accessible to a wider audience.
2. VA Loans
VA loans offer several key benefits, including no down payment and no requirement for mortgage insurance. They also feature flexible credit requirements, making them accessible for a wider range of applicants. These loans are specifically designed for active military personnel, veterans, and their spouses, providing valuable financial support to those who have served.
3. USDA Loans
USDA loans are a fantastic option for anyone wanting to buy a home in rural areas since you don’t need to put any money down. Plus, a big chunk of Iowa qualifies for this! These loans also come with low interest rates and flexible credit requirements, which means more people can take advantage of them.
4. Conventional Loans
Conventional loans require a credit score of 620 or higher, making them a suitable option for borrowers with solid finances. These loans often come with lower private mortgage insurance (PMI) costs for those with strong credit, making them an appealing choice for individuals looking to leverage their financial stability.
5. Non-QM Loans (Offered by Gustan Cho Associates)
Gustan Cho Associates offers various non-QM loans that cater to unique financial situations. Their options include bank statement loans, which do not require tax returns, making them particularly suitable for self-employed individuals. Additionally, they provide DSCR loans specifically designed for investors and asset depletion, no-documentation, and interest-only options. These loans are perfect for those with unconventional income sources or specific financial needs.
First-Time Homebuyer in Iowa? We’ve Got You Covered
Explore your financing options and find the best loan programs available for Iowa buyers.
How to Get Pre-Approved for a Mortgage in Iowa
Getting pre-approved is your first big step in buying a house in Iowa. It shows sellers you’re serious and ready to make an offer.
What you’ll need:
- Income documentation (or 12–24 months of bank statements)
- Two years of employment history (or self-employed history)
- Recent tax returns (for traditional loans)
- Credit report (we’ll pull it for you)
Pre-approval letters from Gustan Cho Associates are fast, and we can often get your loan to the closing table in 21 days or less.
Down Payment Requirements for Buying a House in Iowa
Down payments vary depending on your loan:
- VA Loans – 0% down
- USDA Loans – 0% down (if eligible area)
- FHA Loans – 3.5% down with 580+ credit; 10% down with 500-579 credit
- Conventional Loans – 3% to 20% down
- Non-QM Loans – 10% to 30% down, depending on the loan type
Need help with your down payment? Ask us about grant programs or gift funds from family.
Where to Buy a House in Iowa in 2025
Looking for the best cities and towns for buying a house in Iowa? Here are some great options:
Des Moines
Des Moines, the capital city, has a median home price of $225,000. Its growing job market, low crime rates, and wealth of entertainment options make it an appealing place to live.
West Des Moines
West Des Moines is an excellent place for families. It has awesome schools, lots of parks, and plenty of services. The warm atmosphere makes it easy for families to feel welcome. It also offers many fun activities for people of all ages.
Ames
Ames is a vibrant city that is home to Iowa State University, contributing to its dynamic atmosphere. The area boasts a strong rental and resale market, making it an attractive option for both investors and residents. Additionally, Ames offers affordable homes, which enhances its appeal as a desirable place to live.
Johnston
Johnston is an up-and-coming area characterized by new development, making it an appealing location for potential homebuyers. The current median home price in Johnston is $260,000, reflecting the area’s growing popularity and investment in its future.
Iowa City
Iowa City is home to the University of Iowa, contributing to its vibrant and dynamic atmosphere. The city boasts a strong arts scene that enriches the cultural landscape, making it an appealing destination for both residents and visitors. Its walkable neighborhoods further enhance the charm of Iowa City, allowing people to easily explore and enjoy the city’s various offerings.
Other honorable mentions: Ankeny, North Liberty, Coralville, Bettendorf, Clive, and Waukee.
Buying a House in Iowa with Bad Credit
You’re not out of luck if you have collections, late payments, or even a bankruptcy. At Gustan Cho Associates, we work with lenders that offer FHA, VA, and Non-QM loans with no lender overlays.
That means if HUD says you qualify, we won’t add extra rules like big banks do.
So, if you’re ready to buy a house in Iowa, don’t let your credit hold you back.
Buying a House In Des Moines, Iowa
West Des Moines – this is a western suburb of the capital of Iowa, Des Moines, and it would be perfect for those working in the city. The suburb is fairly densely populated as its home to over 60,000 people.
Dreaming of Owning a Home in Iowa? We Make It Possible for First-Time Buyers
With great loan options and expert advice, we’ll help you make your Iowa homeownership dream a reality.
Is It Cheaper to Rent or Buy in Iowa?
In 2025, the average rent for a 3-bedroom in Iowa is $1,400/month. However, a mortgage with taxes and insurance on a similar home can be as low as $1,200/month, depending on your rate, credit, and down payment.
With home prices rising steadily (about 4.7% annually), buying now could save you big in the long run.
Steps to Buy a House in Iowa
- Get Pre-Approved – Contact Gustan Cho Associates for a free quote
- Save for Your Down Payment – Or apply for down payment assistance
- Hire a Local Realtor – Especially one familiar with Iowa housing markets
- Start House Hunting – Focus on location, budget, and needs
- Make an Offer – Your agent will help you with the back-and-forth.
- Get an Inspection & Appraisal – Confirm the value and condition
- Close on Your Loan – We’ll help with paperwork, title, and signing
- Get Your Keys – Move into your new Iowa home!
Work with Experts Who Know Iowa
At Gustan Cho Associates, we help buyers across Iowa and the country. Over 75% of our borrowers were previously denied by other lenders. Why? Because we understand that life happens, and we have the products and experience to help you move forward.
When buying a house in Iowa, you deserve a lender who works for you, not against you.
- Fast closings
- No lender overlays
- Bad credit OK
- Bank statement and non-QM programs
- Licensed in 50 states, including Iowa
Final Thoughts on Buying a House in Iowa
Buying a house in Iowa is more than just a wise investment—it’s a chance to build the life you want in a state full of opportunity, safety, and charm.
Whether you’re a first-time buyer or someone with past credit challenges, there’s a loan program for you. And Gustan Cho Associates is here to help you every step of the way.
Let’s get you home.
Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on buying a house in Iowa, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.
Frequently Asked Questions About Buying a House in Iowa:
Q: Can I Still Buy a House in Iowa if My Credit is Bad?
A: Yes, you can. With the right loan, buying a house in Iowa with bad credit is possible. FHA and non-QM loans work for credit scores as low as 500. Gustan Cho Associates helps buyers who have been turned down by other lenders.
Q: How Much Money do I Need to Buy a House in Iowa?
A: The money you need for a down payment depends on the loan type. VA and USDA loans require no down payment. FHA loans require at least 3.5% down. You might need 10% to 30% if your credit is low. Ask us about help with your down payment when buying a house in Iowa.
Q: What is the Average Home Price in Iowa in 2025?
A: The average price of a house in Iowa in 2025 is about $217,000, which is still much cheaper than most places in the U.S.
Q: What Types of Loans Can I Get When Buying a House in Iowa?
A: You have options like FHA, VA, USDA, Conventional, and non-QM loans. Gustan Cho Associates offers all these programs and can help you choose the best one for your credit, income, and goals.
Q: Can Self-Employed People Qualify to Buy a House in Iowa?
A: Yes! If you’re self-employed, you can still qualify when buying a house in Iowa. We have special programs like bank statement loans that don’t require tax returns.
Q: Is it Cheaper to Rent or Buy in Iowa Right Now?
A: In most cases, it’s cheaper to buy a house in Iowa than to rent. The average rent is about $1,400/month, but many buyers pay less on their mortgage—and they’re building equity.
Q: What Help is Available for First-Time Homebuyers in Iowa?
A: The Iowa Finance Authority (IFA) provides support such as down payment assistance, grants, and reduced interest rates. These initiatives facilitate the home-buying process in Iowa, particularly for those purchasing their first home.
Q: Where are the Best Places to Buy a House in Iowa?
A: Iowa’s best locations for purchasing a home are Des Moines, West Des Moines, Ames, Johnston, and Iowa City. Each area offers its own advantages, including quality schools, job opportunities, and reasonable housing prices.
Q: How Long Does it Take to Close on a Home in Iowa?
A: At Gustan Cho Associates, we can close most loans in 21 days or less. That means you can go from pre-approval to moving into your new home fast when buying a house in Iowa.
Q: Who Should I Work with to Buy a House in Iowa?
A: Work with a team that knows Iowa and helps buyers with all types of credit. At Gustan Cho Associates, we’re experts in buying a house in Iowa with fast closings, no lender overlays, and programs for every situation.
This blog about “First Time Buying a House in Iowa? Start Here” was updated on July 15th, 2025.
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