Home financing in Johnson County.

Home financing means borrowing money to buy, build, or improve a property — and agreeing to pay it back over time, usually with interest. The most common type is a mortgage: a loan secured by the property itself. If you stop making payments, the lender can take the property through a process called foreclosure.

There are several kinds of home loans you may encounter in Johnson County:

• **Conventional loans** — Offered by banks and credit unions, not backed by the government. They typically require a credit score of 620 or higher and a down payment of 3–20%.

• **FHA loans** — Backed by the Federal Housing Administration. Lower credit score and down payment requirements (as low as 3.5%), but you pay mortgage insurance. Good for first-time buyers.

• **USDA Rural Development loans** — Some parts of Johnson County outside Iowa City may qualify for USDA loans, which offer zero down payment for income-eligible buyers. Worth checking.

• **ITIN loans** — Some local lenders offer mortgages to borrowers who have an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. These are real loans, not scams.

• **Investment property loans** — For buyers purchasing a rental or fix-and-flip. These usually require larger down payments (15–25%) and have stricter income verification.

Understanding the type of loan that fits your situation is the first step. A local housing counselor can help you figure this out at no cost.

Johnson County's economy is anchored by the University of Iowa, UI Health Care, and a growing tech and healthcare services sector in and around Iowa City and Coralville. This means the local workforce includes university employees, healthcare workers, small business owners, self-employed contractors, and a significant immigrant community — many of whom work in food service, construction, landscaping, and caregiving.

**General qualification factors lenders look at:**

- Credit history and score (some ITIN lenders use alternative credit, like rent and utility payment records)

- Steady income — including self-employment income, if documented properly

- Debt-to-income ratio (ideally below 43%)

- Down payment savings

- Property condition and appraised value

**For solo contractors and self-employed workers in Johnson County:**

If you work in construction, landscaping, or another trade and file taxes independently, you will typically need two years of tax returns (Schedule C or 1099s) to show income. Lenders average your income over those two years. If your income went up recently, a local credit union or CDFI may be more flexible than a big bank.

**For immigrant families and ITIN holders:**

Having an ITIN — not a Social Security number — does not disqualify you from buying a home in Iowa. Some local lenders and credit unions specifically offer ITIN mortgage programs. You will need to show consistent income, file taxes using your ITIN, and often provide two or more years of tax returns.

**For small real-estate investors:**

Johnson County's strong rental demand — especially near the University of Iowa — makes it attractive for small landlords. Investment loans are available but require more equity upfront. Being an LLC owner does not automatically disqualify you, but you may need additional documentation.

Gathering your documents early saves time and reduces stress. Here is what most lenders in Johnson County will ask for:

**For all borrowers:**

- Government-issued photo ID (passport, state ID, consular ID card, or driver's license)

- ITIN letter (if applicable) or Social Security card

- Two years of federal tax returns (all pages)

- Last two months of bank statements (all pages, all accounts)

- Last 30 days of pay stubs (if employed by someone else)

- Proof of any other income (rental income, child support, etc.)

- Landlord contact information for the past two years (rental history)

**For self-employed borrowers and solo contractors:**

- Two years of personal and business tax returns

- Year-to-date profit and loss statement (your accountant or a nonprofit housing counselor can help prepare this)

- Business bank statements (last 2–3 months)

- Business license or contractor registration, if applicable

**For ITIN borrowers:**

- ITIN assignment letter from the IRS

- Two or more years of tax returns filed under your ITIN

- Additional proof of alternative credit: 12 months of on-time rent receipts, utility bills, or remittance records

**For investment property buyers:**

- Lease agreements for any existing rental properties you own

- Two years of Schedule E (rental income/loss) from your tax returns

- Proof of reserves (typically 6 months of mortgage payments in savings)

Tip: A HUD-approved housing counselor can review your documents before you apply and help you spot gaps — for free.