Iowa Admin. Code r. 265—3 § 265—3.4
Multifamily loan program for workforce housing loan assistance.
Operative Text
3.4(1) Eligible applicants. To be eligible for a loan under this rule (the “primary loan”), applicants shall: a. Be an Iowa city or county (the “borrower”). b. Agree to use the primary loan proceeds to make a loan to a third party to build housing in the applicant’s jurisdiction that meets the requirements of this rule and subrules 3.3(1), 3.3(3), and 3.3(4) (the “secondary loan”). 3.4(2) Eligible projects. As determined by the authority, to be eligible for a loan under this rule, projects shall: a. Be financially feasible for at least the term of the assistance. b. Have adequately funded replacement and operating reserve funds. c. Consist of at least five housing units. d. For the term of the loan, reserve at least 50 percent of the housing units rehabilitated or created with the proceeds of the secondary loan for families whose annual income at the time of leasing is at or below 120 percent of the area median income and whose rent is no more than 30 percent of the income of a family whose annual income is 120 percent or less of the area median income unless the authority agrees otherwise. e. Preference shall be given to cities and counties that can document an increased need for housing as the result of new job creation within the city’s or the county’s jurisdiction. 3.4(3) Loan terms. a. The primary loan is a general obligation of the borrower, but may be unsecured. b. The borrower shall use funds received in repayment of the secondary loan first to make the scheduled principal and interest payments on the primary loan. Any secondary loan payments remaining after all then-due scheduled payments on the primary loan have been repaid may be reloaned by the borrower on the same basis as if such secondary loan payment amounts were proceeds of the primary loan.
Iowa Admin. Code r. 265—3 § 265—3.4 establishes a two-tier lending structure for workforce housing: the Iowa Finance Authority lends money to an eligible Iowa city or county (the primary loan), which in turn lends those funds to a private developer to build or rehabilitate housing (the secondary loan). Eligible projects must include at least five units, maintain financial feasibility throughout the loan term, and reserve at least half of the assisted units for households earning no more than 120 percent of area median income at rents they can afford. Jurisdictions that can show increased housing need tied to new job creation receive preference in the program.
Plain English — not legal advice.
Under Iowa Admin. Code r. 265—3 § 265—3.4, the direct borrower is the city or county, not the developer—so a property owner or developer seeking this financing would typically work through their local government, which applies for the primary loan and then structures the secondary loan to the developer. Compliant projects generally maintain adequate reserve funds, demonstrate long-term financial feasibility, and document that at least 50 percent of assisted units are leased to income-qualifying households at the prescribed rent levels for the full loan term. Operators should be prepared to track and report tenant income at the time of leasing and maintain records showing ongoing compliance with the income and rent restrictions required by the authority.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Iowa Admin. Code r. 265—3 § 265—3.4 creates a program that can expand the supply of workforce housing by requiring that at least half of units built or rehabilitated with these loan proceeds be reserved for households earning at or below 120 percent of area median income, with rents capped at an affordable level relative to that income threshold. Tenants living in properties developed under this program have an interest in whether those income and rent restrictions are being honored for the duration of the loan term. Individuals who believe a property is not meeting these requirements may contact the Iowa Finance Authority, which determines project eligibility and oversees compliance, or reach out to a local tenant-rights organization for general guidance on available options.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 18, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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