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Summer is in full swing with activities throughout our communities. There are new state laws that took effect July 1, as well as federal housing policy shifts to be aware of. I have highlighted significant changes below for Iowa mortgage professionals.
Regulatory Changes in Iowa Effective July 1
FirstHome Iowa Program (SF 2472) — This new program establishes tax-advantaged savings accounts specifically for first-time homebuyers in Iowa. Contributions and earnings receive state income tax benefits, helping local buyers save for down payments and closing costs.
The Homestead Exemption transition — Iowa has officially transitioned from the traditional Homestead Credit to a tiered Homestead Exemption. Homeowners now receive a property tax exemption equal to 10% of their home's taxable value, with a minimum exemption of $5,500 and a maximum of $20,000, indexed for inflation.
Greater HOA transparency (SF 2448) — Homeowners associations (HOAs) are now legally required to certify whether association dues are current or delinquent, disclose transfer-related fees, which are now capped at reasonable costs, and reveal upcoming assessments.
Home inspection negotiations — When a buyer requests property repairs, the buyer is now only required to share the specific, relevant portions of the inspection report rather than the full document. If the buyer fails to provide those excerpts upon request, the seller may cancel the contract without penalty.
Agency and Underwriting Adjustments
The IMA continues to track critical implementation updates coming down from Fannie Mae and Freddie Mac that alter day-to-day originations:
Condo project review updates — Fannie Mae Lender Letter LL-2026-03 outlines significant changes. The “limited review” process has been discontinued, requiring all transactions to undergo a full review. In addition, minimum reserve funding requirements for condominium associations have increased from 10% to 15% of annual budgets — a major compliance consideration for originators managing conventional condominium loans.
Homeowners insurance policy relaxation — In a bit of relief from rising regional insurance costs, the Federal Housing Finance Agency loosened the strict replacement cost requirements previously required for roofs, allowing actual cash value policies to be acceptable.
Trigger lead enforcement — The president highlighted the continued rollout of anti-trigger lead legislation, which protects consumer credit privacy immediately after a credit pull — a long-awaited victory for local loan originators against abusive lead generators. We are experiencing overwhelmingly positive feedback from customers as a result of this legislation.
State and Military Program Funding Changes
The July updates celebrate the finalized fiscal year 2027 state budget, which secured $2.2 million for the Military Homeownership Assistance Program. This ensures continued down payment and closing cost assistance grants for eligible Iowa service members and veterans.
My message to you is one of solidarity and proactive education. Between navigating new condo review guidelines and educating realtors on the July 1 inspection and HOA rules, the IMA emphasizes the value of an Iowa loan originator lies in translating these legislative changes for consumers.
Get ready, the Iowa State Fair begins Aug. 13!
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