Down payment
Generally three and a half percent of the purchase price for borrowers with a credit score of 580 or higher. Borrowers between 500 and 579 typically need ten percent down.
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FHA loansFHA loans in Des Moines and across Iowa
The program that exists specifically for buyers who do not fit the conventional box. Here is how it works, what it costs, and when it is the right call.
What an FHA loan is
An FHA loan is a mortgage insured by the Federal Housing Administration. The FHA does not lend you the money; it insures the lender against loss, which is why lenders can accept lower credit scores and smaller down payments than they otherwise would. It was created in the 1930s for exactly this purpose and remains one of the most common paths to a first home.
The core requirements
Credit
More flexible than conventional financing. Past credit events like a bankruptcy or foreclosure have waiting periods, but they are usually shorter than conventional requirements.
Debt-to-income
FHA generally allows higher debt-to-income ratios than conventional financing, which matters if you carry student loans or a car payment.
Occupancy
FHA financing is for primary residences. It cannot be used to buy an investment property, though it can be used on a small multi-unit property if you live in one of the units.
Mortgage insurance is the tradeoff
This is the part that gets glossed over, so here it is plainly. FHA loans carry two mortgage insurance charges: an upfront premium, usually financed into the loan balance, and an annual premium collected monthly as part of your payment.
The important detail is duration. On FHA loans with less than ten percent down, the annual mortgage insurance generally stays for the life of the loan. It does not fall off when you reach twenty percent equity the way conventional PMI does. The usual path to removing it is refinancing into a conventional loan once you have enough equity and the credit profile to qualify.
That is not a reason to avoid FHA. It is a reason to go in knowing the plan. For many buyers, FHA is the difference between owning now and waiting two more years, and the insurance cost is worth it. But it should be a decision, not a surprise.
Property condition matters more than you would expect
FHA appraisals check the property against minimum standards, not just value. Peeling paint on a pre-1978 home, a roof near the end of its life, missing handrails, or non-functioning mechanicals can all trigger required repairs before closing.
In a metro with housing stock as varied as Des Moines, this comes up regularly, particularly on older homes in established neighborhoods. It is worth knowing before you write an offer on a fixer, because the repairs generally need to happen before funding, and the negotiation over who pays for them is a real one.
FHA versus conventional
There is no universal winner. FHA usually wins when credit is in the lower ranges or debt-to-income is tight. Conventional usually wins when credit is strong, because PMI on a conventional loan is priced by credit score and can be removed at twenty percent equity.
The honest way to decide is to price both. A side-by-side comparison of the monthly payment, the total cost over the period you expect to own, and the exit path from mortgage insurance will usually make the answer obvious.
Common questions
Questions people ask
What credit score do I need for an FHA loan in Iowa?
FHA guidelines generally allow a three and a half percent down payment at a 580 credit score, and ten percent down between 500 and 579. Individual lenders may set higher minimums than FHA requires, so the answer can vary by lender.
Does FHA mortgage insurance ever go away?
On most FHA loans originated with less than ten percent down, the annual mortgage insurance premium remains for the life of the loan. Refinancing into a conventional loan once you have sufficient equity is the common way to eliminate it.
Can I use an FHA loan for a rental property?
No. FHA financing requires you to occupy the home as your primary residence. You can, however, use it on a two-to-four unit property if you live in one of the units, which is a strategy some first-time buyers use.
Are there FHA loan limits in the Des Moines area?
Yes. FHA sets maximum loan amounts by county, and they are adjusted annually. Because the figures change, it is worth confirming the current limit for the specific county you are buying in rather than relying on a number you read somewhere.
Can I get an FHA loan on an older home in Des Moines?
Often yes, but the property must meet FHA minimum property standards. Older homes sometimes need repairs completed before closing, particularly around paint, roofing, handrails, and mechanical systems. Knowing this before you write an offer saves a lot of friction.
Next step
Talk it through before you commit
No cost, no obligation. Bring your questions and we will work out what actually fits your situation.
Phone: 712-830-0025
Email: bhaye@gokeymortgage.com
Office: 2370 NW 128th Street, Urbandale, IA 50322