Loan Programs

NIFA offers a variety of programs that include government and conventional loan products.  All first mortgage loans have a fixed rate 30-year term.  There are no prepayment penalties and all of our first mortgage loans are assumable subject to certain requirements.  There are maximum household income and purchase price limits

Loan Products

Participating Lenders are responsible for loans meeting program eligibility requirements, agency underwriting guidelines, secondary market guidelines and Master Servicer guidelines.  The following loan products are available:

Credit Underwriting Overlays

All NIFA loans are subject to credit underwriting overlays.  Overlays include minimum credit scores and maximum debt-to-income (DTI) ratios.  They differ depending on the type of loan.

Conventional Loans - The minimum credit score requirement is 640 with a maximum total DTI ratio of 45%.  If the borrower's credit score is 660 and above, NIFA will allow a maximum total DTI of 50%.  If manual underwriting guidelines are used to approve the loan, the minimum credit score requirement is 660 with a maximum housing expense ratio of 31% and a maximum total DTI ratio of 43%.  If the borrower does not have a credit score, non-traditional credit sources allowed by agency guidelines may be used subject to a maximum housing expense ratio of 31% and a maximum total DTI ratio of 43%.

Government Loans - The minimum credit score requirement is 640 with a maximum total DTI ratio of 45%.  If the borrower's credit score is 660 and above, NIFA will allow a maximum total DTI ratio of 50%.  If manual underwriting guidelines are used to approve the loan, the minimum credit score requirement is 660 with a maximum housing expense ratio of 31% and a maximum total DTI of 43%.  If the borrower does not have a credit score, non-traditional credit sources allowed by agency guidelines may be used subject to a maximum housing expense ratio of 31% and a maximum total DTI ratio of 43%.

Pre-Purchase Homebuyer Education

NIFA requires all occupying borrowers who are responsible for repaying the loan to complete an approved homebuyer education class prior to closing.  Knowledge is power!  We believe it is in the best interest of first-time buyers to complete an approved class before shopping for a home.

NIFA allows face-to-face education and online education. We partner with a network of non-profit organizations called REACH Affiliates who provide face-to-face education and other housing resources. To find a REACH Affiliate, visit the Nebraska Housing Developers Association website or call 888-879-3403. Click here for a list of approved online classes.

Potential Recapture Tax

NIFA loans have a potential IRS federal recapture tax that remains in effect for 9 years from closing.  The potential recapture tax may apply if all of the following events occur:

  • The home is sold before the end of 9 years AND
  • The home is sold for a gain AND
  • The borrower's adjusted gross income reported on their federal tax return at the time of sale exceeds the IRS limit

For example, if the home is sold five years after closing for a gain but the borrower's adjusted gross income is below the IRS maximum limit, there is no recapture tax.  Additionally, if the home is sold at a loss eight years after closing and the borrower's adjusted gross income exceeds the IRS maximum limit, there is no recapture tax.

The maximum recapture tax amount is 6.25% of the loan amount.  Participating Lenders are required to provide a Potential Recapture Tax Notice at the time of loan application and at closing.  If the home is sold before the end of 9 years, the borrower is responsible for completing IRS Form 8828 and to include it with their federal tax return whether they owe a recapture tax amount or not.

Recapture Tax Reimbursement

NIFA started a recapture tax reimbursement policy for all loans closed on and after June 1, 2004.  Since that time, we have received 7 claims for reimbursement.  To qualify for reimbursement, the borrower needs to submit the following information to the NIFA office no later than July 15th of the calendar year following the year in which the home was sold: