Real Estate in Iowa
The Hawkeye state is not a state that many people think of when they imagine a booming real estate market. However, Iowa has many surprises for those willing to dig a little deeper. The saying goes in real estate that “there is always a deal somewhere.” Well, that somewhere is Iowa. Though much of the state is still rural (which may offer a certain type of real estate deal depending on what the buyer is looking for), at least three metropolitan areas in Iowa are among the fastest growing in the nation, both in business and in residential growth. Combine with this the fact that the state tends to keep stable home prices even in volatile economic times, and you have the makings of a hidden Mecca for the right type of borrower or real estate investor.
Iowa Real Estate Prices Compared to the National Average
The fixed mortgage rates in Iowa are right around the national average, and tend to follow the national market trends. However, where the deals are truly is on the adjustable rate mortgage interest rates, which are considerably lower than the national average. The reason for this is that the state of Iowa has many state sponsored programs which stabilize the housing market, and allow borrowers to take advantage of the lower adjustable rates even in an unstable economic market. Also, with the growing metropolitan areas and residential populations of Iowa City, Des Moines, Ames, and other growing cities in the state, adjustable mortgages tend to stay in a narrower range as housing prices are on the rise. 3 / 1 adjustable rate mortgages provide the best opportunity for a deal for qualified buyers as the ARM rate beats the national ARM rate by the highest percentage of any mortgage type offered in Iowa.
Popular Iowa Cities to Live In
As mentioned before, the top three centers of growth in the state of Iowa by commercial activity are Iowa City, Des Moines-West Des Moines, and Ames. The county of Dallas ranked as the 15th fastest county for growth in the United States between 2007 and 2008. A total of 18 counties in Iowa gained residents since the last census, and the overall population of the state has risen by over 2 percent. The reason for all this metropolitan growth: the alternative energy, defense, and aerospace industries, all industries that have received a great deal of attention politically in the United States. The defense and aerospace industries also tend to be among the most stable industries in America, and with the advent of alternative energy, Iowa stands to be in a state of growth for the near future. As of 2010, there are over 17,000 alternate energy businesses in the state, and that number is always growing, providing more and more opportunities for stable jobs, further stabilizing the housing market.
Top Residential Areas
The top residential areas do not exactly coincide with the areas of commerce in Iowa, because the state tends to divide itself into city and suburban areas like many states in its part of the country. The top residential areas in Iowa are Waukee, a Des Moines suburb, North Liberty, an Iowa City suburb, and Granger, a Des Moines suburb. The pattern is clear — people are moving to the suburbs to be close to stable metropolitan areas and jobs, but without living on top of each other. 7 of the top 10 fastest growing cities in Iowa, including the suburbs mentioned here, are suburbs of the top 3 metro areas of the state. The metropolitan areas of Iowa have actually lost population, losing those people to the suburbs. However, there are more people moving into the suburban areas than there are moving out of the metro areas, which accounts for the percentage gain in population in the state. Over 60 percent of Iowa residents live in a metro county as of 2010.
The farming industry in Iowa, while not growing, is stable enough to be able to account for the rest of the population’s relative stability, and the stability also of the more rural housing market.
Types of Mortgages Offered in Iowa
Iowa offers conventional loans. Also as mentioned before, the private financial institutions of the state offer some of the best adjustable rate mortgage terms in the nation. They also offer balloon mortgages and reverse mortgages, Federal Housing Administration loans, loans from the office of Veterans Affairs, as well as many types of mortgages for those in financial trouble. Among these loans are home equity lines of credit, piggyback loans, full doc loans, stated income mortgages, and 100% financing loans.
What Sets Iowa Apart
It is worth noting that because many of the population of Iowa are farmers and independent businessmen, the state has a much more sophisticated methodology for stated income mortgages than does most of the rest of the nation. The state sponsored programs tend to fill in the loopholes that would prove unprofitable or risky for private financial institutions to take on by themselves. This public private partnership of sorts also tends to stabilize the housing market as well as provide many incentives to the entrepreneurial spirit that are simply not present in other parts of the nation or in federal dockets. This may account for the increased stability in the housing market of the state as compared with the nation, because people in business for themselves have a pride of ownership which begets responsibility.
Iowa is a recourse state, which also helps in the mitigation of responsibility.
Summary of The Foreclosure Laws in Iowa
In the state of Iowa, lenders use the judicial process of foreclosure, which begins to a petition to the court. The non judicial foreclosure procedure is not available by state law. In Iowa, documents can take a relatively long time to process — up to 160 days. Borrowers also have a right of redemption from 20 days to a full year depending on relevant circumstances. There are also no deficiency judgments allowed in the state.
The Foreclosure Procedure in Iowa
Lenders must post both a decree of sale to the state court and also file a complaint against the debtor before the foreclosure proceedings may begin. The court must first find the debtor in default of the loan before the lender may take any further action, and the courts of Iowa usually give a much longer time period to the borrower to make restitution over the complaint. As previously mentioned, documents in Iowa are processed relatively slowly. If the borrower can not make restitution and the court does deem the debtor in default, the notice of sale for the property must be placed in at least three places in the county deemed noticeably public. One of these places must be the county courthouse, with the other two being a weekly publication of the notice in two newspapers that are printed in the county. The first of these must be at least 4 weeks before the foreclosure sale. The last must be only at a “later time.” However, if the debtor is still in occupation of the property, they must be served notice no less than 20 days from the sale date.
Foreclosure sales are made by public auction between the times of 9 am and 4 pm. Auctions are attended by the office of the sheriff of the county in which the property is located. Bids are made by sealed offer, which are given to the sheriff and are opened at the same time. The house goes to the highest bidder.
The only way that a debtor can avoid a judicial proceeding is to voluntarily give up all their rights to the property to the lender. In return, the lender may not file deficiency judgments against the borrower.
State Programs to Help Homeowners in Iowa
Iowa sponsors the program known as the Iowa Home Ownership Education Project (IHOEP), which has as its mission the education of potential home owners. The program also offers financial advice to home owners in financial trouble. Iowa also has The First Home Program to help first time home buyers get into a home, and the First Home Plus Program, which adds monetary assistance to help with the down payment on a home for first timers, as well as money for minor repairs.