Conventional loan in Iowa: what it costs on the median home, and when PMI ends

On Iowa’s rough $220,000 median, a conventional loan with 5% down means $11,000 at closing and about $1,725 a month with taxes and mortgage insurance; with 20% down, $44,000 and about $1,385. Everything below is worked on those numbers and on the state rules that change them.

Conforming or jumbo in Iowa?

A conventional loan is conforming when it fits Fannie Mae and Freddie Mac’s limit and their guidelines; in Iowa that limit is $832,750 for a one-unit home in 2026. With 20% down, a purchase up to about $1,040,938 stays conforming; with 5% down, up to about $876,579. The state’s $220,000 median leaves ample room, so a typical purchase here is conforming unless the buyer is in a premium neighborhood. Every Iowa county is in the table below; see conforming loan limits and jumbo loans.

County-level loan limits in Iowa for 2026

For 2026 the FHFA county list shows a single tier in Iowa: all 99 counties at the $832,750 baseline for one unit, $1,066,250 for two units, $1,288,800 for three and $1,601,750 for four. Above those figures a loan is jumbo, whatever the county.

Source: FHFA, Conforming Loan Limit Values for 2026 (county list, mortgages acquired in calendar year 2026). Limits are for Fannie Mae and Freddie Mac loans; FHA and VA use their own county figures.

What a conventional loan costs on the Iowa median

Worked at an illustrative 6.5% over 30 years on the $220,000 median. PMI uses order-of-magnitude annual rates by down payment; tax uses Iowa’s approximate 1.49% effective rate. Your county, score and insurer will move every column.

Under 20% down, conventional loans require mortgage insurance until the loan-to-value falls; the next section gives the ${e.nom} timeline. Payment tables at other amounts and rates: mortgage payment tables.

How long you pay PMI here

Federal rules, identical in Iowa: you may request cancellation at 80% of the original value and the servicer must cancel at 78%. On the scheduled amortization alone, the 5% down loan above reaches 80% after about 10 years and 4 months and 78% after about 11 years and 3 months; the 10% down loan, 80% after about 7 years and 11 months; the 3% down loan, 80% after about 11 years and 1 months. At roughly $131 a month on the 5% scenario, that is about $16,244 of PMI over the period — the strongest argument for extra principal payments or a value-based cancellation request once prices rise.

Closing costs and taxes in Iowa

Iowa is the only state that forbids private title insurance (Iowa Code 515.48), so a closing rests on an abstract of title examined by an Iowa attorney whose written title opinion supports a certificate from Iowa Title Guaranty, a state program run by the Iowa Finance Authority. Lenders, abstractors and closing agents may conduct the signing itself, but the attorney’s opinion is the document the guaranty depends on. The guaranty certificate costs a modest flat fee rather than a premium scaled to the loan, which makes Iowa title costs unusually low.

Iowa does not tax the mortgage or the note; only per-page county recording fees apply to the lien. The real estate transfer tax (Iowa Code chapter 428A) is charged on the deed at $1.60 per $1,000 of consideration above the first $500 and is customarily paid by the seller. The borrower’s main title-related cost is the Iowa Title Guaranty fee rather than a tax. Iowa’s real estate transfer tax is $0.80 per $500 of the amount over $500 (about 0.16%), paid by the seller by custom and statute.

Iowa buyer closing costs are low — about 2% of the price — helped by the absence of title insurance in the conventional sense: Iowa uses attorney title opinions and the state-run Iowa Title Guaranty, which is cheaper than private title insurance elsewhere.

Iowa rules that touch a conventional loan

Prepayment. Iowa Code 535.9 generally prohibits prepayment penalties on loans secured by a mortgage on residential real property occupied by the borrower, such as a one- or two-family home, so a penalty clause in a standard Iowa home loan is the exception rather than the rule. Fannie Mae and Freddie Mac do not buy loans with prepayment penalties, so a conforming loan will not carry one.

Spouses and title. Iowa is not a community property state, and dower was replaced by an elective share, but the homestead joinder rule is strict: a mortgage of the homestead is invalid unless both spouses sign the same instrument or identical instruments (Iowa Code 561.13).

Homestead. Iowa’s homestead exemption is unlimited in dollar value but capped in area: one-half acre inside a city or 40 acres outside (Iowa Code 561.2 and 561.16).

The complete state layer — licensing, predatory-lending limits, disclosures, foreclosure — is on mortgage laws in Iowa.

Frequently asked questions

What is the conforming loan limit in Iowa for 2026?

$832,750 for a single-family home, identical across Iowa’s 99 counties because FHFA found no high-cost area in the state for 2026. A loan above it is jumbo; a conforming first plus a second lien is the usual way to stay under.

When can I cancel PMI on a conventional loan in Iowa?

Under the federal Homeowners Protection Act you may request cancellation when the balance reaches 80% of the original value and the servicer must cancel automatically at 78%. On a $220,000 Iowa home bought with 5% down at an illustrative 6.5%, scheduled payments reach 80% after about 10 years and 4 months and 78% after about 11 years and 3 months; extra principal or a new appraisal showing appreciation can move the date up.

Does Iowa add anything to a conventional loan’s closing costs?

Iowa does not tax the mortgage or the note; only per-page county recording fees apply to the lien. Iowa’s real estate transfer tax is $0.80 per $500 of the amount over $500 (about 0.16%), paid by the seller by custom and statute. Iowa buyer closing costs are low — about 2% of the price — helped by the absence of title insurance in the conventional sense: Iowa uses attorney title opinions and the state-run Iowa Title Guaranty, which is cheaper than private title insurance elsewhere.

Related: Buying another home before selling the first: qualifying with two payments, Conventional loan requirements in 2026: what Fannie Mae’s guide actually says, USDA vs VA vs FHA vs conventional: the four loan types compared, 2026 conforming loan limits: $832,750 in most counties, up to $1,249,125 in high-cost areas. First home in Iowa: programs and assistance. Hub: Conventional loan.