In partnership with Union State Bank in Winterset, the Iowa Finance Authority (IFA) received a $210,000 grant from the Federal Home Loan Bank (FHLB) that provides $3,000 for down payment and closing costs for first-time home buyers. IFA participating lenders must use this FHLB AHP Grant in conjunction with FirstHome and FirstHome Plus to help Iowans purchase homes in communities where the population does not exceed 25,000.

General requirements

• Only IFA Participating Lenders may originate loans using RuralHome. Contact IFA with questions before proceeding if you are unsure whether your company is an IFA Participating Lender.
• Lenders must use the IFA FirstHome or FirstHome Plus programs with RuralHome.
• Borrowers may only use RuralHome one time, once per household and only for home purchase; refinancing is not eligible, nor is assignment of subsidy to another.
• Seventy borrowers will be able to use the funds, including 60 borrowers at or below 60 percent area median income (AMI) and 10 borrowers at or below 50 percent AMI. The funds are available on a first-come basis.
• Eligible borrowers must qualify using FHLB 2008 income limits.
• Purchase price limits for borrowers are the same as for FirstHome or FirstHome Plus.

Application process

• The lender completes the Request for Pre-Approval prior to closing for RuralHome.
• The lender will complete the Calculation of Income Worksheet for each household member.
• Before completing the Calculation of Income Worksheet, the lender should first review the Income Determination Guidelines and the Calculation of Income Worksheet Instructions.
• When completing the Calculation of Income Worksheet: If documentation is provided on the Verification of Employment (VOE) form that indicates a change of income within the next 12 months - for example, if an employer indicates that a raise in pay will occur in three months - then the income must be calculated based on the information provided and for the period provided.
• The lender will complete a Third Party Verification of Income. All sources of income must be verified by a third party. The FHLB prefers the Verification of Employment (VOE) document.
• The lender will complete, execute and file the required Deed Restriction.
• At the time of closing, the ender will advance $3,000 in grant funds to the borrower. If the lender has already advanced the homebuyer education fee to the provider, then the amount of such fee (up to $150) will be subtracted from the $3,000 grant. (See bullet #1 under Settlement Statement for additional directions.)
• Send IFA a copy of the completed, executed and filed Deed Restriction, along with a completed and signed HUD-1, to request reimbursement for the grant funds. Please email or send these documents to: 
  Sharon Murphy
  Iowa Finance Authority
  2015 Grand Avenue
  Des Moines, Iowa 50312
• The lender will receive e-mail notification that IFA has received the Request for Approval for RuralHome.
• Only after the loan has been purchased will IFA send a check to reimburse the lender for the approved amount of assistance. Checks may NOT be sent prior to loan purchase.
• Home buyers must complete homeowner education before the loan is closed. The first choice is face-to-face homeowner education provided through the Iowa Home Ownership Education Project (IHOEP). Please visit www.ihoep.com for a list of local providers. See the Waiver Request for other homeowner education options. The Iowa Finance Authority has approved Iowa State University Extension ("A Place of Your Own") as the Web-based homeownership education provider.
• The lender can be reimbursed up to $150 if the lender has already advanced the fee to the homeowner education provider.

Settlement statement

• The amount to be paid by IFA is shown on the first page of the HUD-1 as a credit, entered as “RuralHome Subsidy.” The amount for homeownership education is entered as "Homebuyer Education Fee." 
• IFA will not reimburse cash returned to the borrower in excess of actual out-of-pocket payments made at or prior to closing. Examples of eligible reimbursements include the application fee and hazard insurance premium. Ineligible items will be deducted from the reimbursement requested.
• The application for reimbursement is made to and paid directly by IFA on behalf of the FHLB Des Moines.