Loan Programs

Our programs are designed with the first-time homebuyer in mind.  We offer 30-year fixed rate loans to keep your monthly payments affordable.  There are no pre-payment penalties so you have the option to make extra payments every month to save additional interest over the life of your loan.

Our maximum household income and purchase price limits described in the Eligibility section apply to all programs. 

Military Home Program

The Military Home Program is for buyers who are actively employed by any branch of the service or for Qualified Veterans who have been discharged from the service under conditions other than dishonorable.

Active members of the service must meet NIFA's first-time homebuyer definition described in the Eligibility section.  Qualified Veterans and spouses are not required to be a first-time homebuyer.  If you are a Qualified Veteran, NIFA requires a copy of your DD214 Form to determine eligibility.

If you are not eligible for a loan through the Department of Veterans Affairs (VA), you have the option to choose either a Federal Housing Administration (FHA) insured loan or a USDA Rural Development (RD) guaranteed loan.  Click here for current Military Home Program interest rates. 

Homebuyer Assistance Program

The Homebuyer Assistance (HBA) Program opens the door to homeownership, even if you do not have enough money saved for down payment and closing costs.  Our HBA Program can help you buy a home with a minimum investment of $1,000.  There may be some situations where the minimum investment may need to be more than $1,000 depending on the type of loan (government or conventional) and the amount of closing costs the seller is willing to pay.

The HBA Program includes a first and second mortgage loan.  The interest rate on the first mortgage loan is higher than NIFA's other programs that do not offer NIFA down payment and closing cost assistance.  The maximum amount of assistance for the second mortgage loan is 5% of the home's purchase price.  The term of the second mortgage loan is 10 years or 120 months.  The interest rate on the second mortgage loan is 1%.

Your loan type options include a Conventional-insured loan, FHA-insured loan, USDA Rural Development-guaranteed loan or VA-guaranteed loan.  Click here for current HBA Program interest rates. 

First Home Plus Program

The First Home Plus Program is for buyers who do not qualify for our Military Home Program and do not need down payment and closing cost assistance.  Buyers using this program must meet NIFA's first-time homebuyer requirement described in the Eligibility section.

Your loan type options include a Conventional-insured loan, FHA-insured loan and USDA Rural Development-guaranteed loan.  If your downpayment is 20% or more and you qualify for a conventional loan, mortgage insurance is not required.  Click here for current First Home Plus Program interest rates.

First Home Focused Program

The First Home Focused Program is for buyers who purchase a home located in a target area and do not need down payment and closing cost assistance.  Buyers do not need to meet NIFA's first-time homebuyer requirement.  Maximum household income and purchase price limits are higher when a home is located in a target area.

Target areas are designated by the federal government.  The following counties have targeted census tracts:

You can use NIFA's interactive map to help you identify whether or not a specific home is located in a target area.  Type in the exact address or city in the white box located in the upper right corner above the map.  Target areas are shaded.  You can use the + or - symbols located in the upper left corner to zoom in or zoom out.

Your loan type options for this program include a Conventional-insured loan, FHA-insured loan or USDA Rural Development-guaranteed loan.  If your downpayment is 20% or more and you qualify for a conventional loan, mortgage insurance is not required.  Click here for current First Home Focused Program interest rates.

Potential Recapture Tax

NIFA loans are subject to a potential IRS federal recapture tax during the first 9 years of the loan.  You may be subject to a recapture tax if all of the following events occur:

  • You sell your home before the end of 9 years AND
  • You realize a gain from the sale AND
  • Your adjusted gross income reported on your federal tax return at the time of sale exceeds the IRS limit

For example, if you sell your home five years after closing for a gain but your adjusted gross income is below the IRS maximum limit, there is no recapture tax due.  Additionally, if you sell your home eight years after closing at a loss and your adjusted gross income does exceed the IRS maximum limit, there is no recapture tax.

The maximum recapture tax amount is 6.25% of your loan amount.  Your NIFA Participating Lender will provide you with a Potential Recapture Tax Notice at the time of loan application and at closing.  You should save a copy of this notice as it provides important information you will need.  If your home is sold before the end of 9 years, you are responsible for completing IRS Form 8828 and including it with your federal tax return whether you owe a recapture tax amount or not.

For answers to questions about calculating a potential recapture tax, you should seek assistance from a professional tax advisor or the IRS.

Recapture Tax Reimbursement

Because NIFA understands you may be concerned with having to pay a potential recapture tax, we provide recapture tax reimbursement for NIFA loans.  To qualify for reimbursement, submit the following information to NIFA's office no later than July 15th of the calendar year following the year in which you sell your home:

NIFA will request a copy of your federal tax return from the IRS.  You can expect the reimbursement process to take 90-120 days.

Other Information

You can call NIFA's toll-free number at 800-204-6432 to speak with one of our Homeownership Team Specialists (Monday-Friday 8 a.m. to 5 p.m. CT) or contact us by email.