Iowa Amends Rules Governing Military Service Member Home Ownership Assistance Program

The Iowa Finance Authority has recently clarified and simplified the rules governing the state’s Military Service Member Home Ownership Assistance Program, effective November 29, 2017.

The Iowa Military Service Member Home Ownership Assistance Program (MHOA) allows for one time assistance of up to $5,000 per eligible service member (including veterans), which may be used toward a down payment and/or closing costs for the purchase of a qualified home. If co-purchasers are both eligible service members, only one may use the MHOA per home purchase.  If another home is purchased at a later date, the other eligible service member may use the MHOA on the second home.

Eligible service members must have served a cumulative 90 days of active duty between August 2, 1990 and April 6, 1991, or between September 11, 2001 and the present. Federal status injured service persons are also eligible if he or she served in active duty between August 2, 1990 and April 6, 1991, or between September 11, 2001 and the present. The surviving spouse of an eligible service person is also eligible for the MHOA, as long as the eligible service person was not dishonorably discharged.

Eligible homes must be in the state of Iowa, and must be occupied as the service member’s primary residence. The home must be either a single-family residence (including “stick-built,” modular, or manufactured homes that are attached to a permanent foundation and taxed as real estate), or a condominium, townhome, or a two to four unit residential property where one unit is to be occupied by the eligible service member.

When the purchase of a home under the MHOA is to be financed, the service member must apply through a participating lender. If the service member qualifies for the program, the mortgage financing provided must be a qualified mortgage.  Once the lender has received all of the information required from the service member, the lender must then transmit copies of the necessary documentation to the Iowa finance authority. The authority must then submit the status documentation to the Iowa department of veterans affairs for verification that the applicant is an eligible service member.  The Iowa department of veterans affairs will be the final authority as to whether an applicant is an eligible service member.  Upon confirmation of the applicant’s eligibility by the Iowa department of veterans affairs and the authority, the authority must then notify the lender (or eligible service member in the case of a cash purchase) that the MHOA application has been approved.

 

CLA Bankers Advisory is an Authorized MERS Patron Member

Please contact our office to discuss a range of service options to help your organization complete its compliance obligation for MERS Quality Assurance. CLA Bankers Advisory is a MERS patron member and provides consulting services, including assessments necessary for completion of the MERS Annual Report process. Engagements evaluate completion of system-to-system reconciliation and validation of records between lenders, MERS, and any sub-servicer.

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Zachary Pearlstein, JD, is a senior regulatory compliance consultant with Bankers Advisory. He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.

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