For years, Cale Neighbors convinced himself that homeownership was part of his past, not his future.

Rising home sale prices, stagnant savings and increasing rental, food and gas costs made Neighbors question whether he’d ever be able to save enough money for a down payment for a place of his own.

When his mother urged him to dream a little – pointing out potential homes when they drove around Des Moines – Neighbors insisted that buying a house with his income was unrealistic. “Times are hard and when you’re making [less than $70,000 annually], buying a home is virtually impossible,” said Neighbors, who owned a home about 20 years ago before selling it and relocating to Colorado. He recently returned to Iowa.

Last fall, Neighbors began reconsidering his outlook on homeownership after realizing his $1,100 monthly rental check was building equity for someone else. After running some numbers, Neighbors realized he could pinch enough pennies every month to handle spending a couple hundred dollars more a month on housing.

Neighbors found a two-bedroom, 768-square-foot house on Des Moines’ south side that was in a designated lending area of Neighborhood Finance Corp., a nonprofit organization that provides lending programs and services to boost neighborhood revitalization in Polk County and Cedar Rapids. After making an inquiry and filling out paperwork, Neighbors learned he qualified for Neighborhood Finance’s down payment assistance program, a forgivable home improvement loan and a deferred loan to make energy improvements.

This spring, Neighbors took possession of his new home, located about one-half mile south of Wakonda Club and three minutes from his mother’s home.

“I’ve lived in apartments where I’ve asked if I could paint something and gotten an absolute ‘no,’” said Neighbors, who takes care of the Salisbury House facilities and grounds. “Now I have a home I can tailor to myself and that makes me happy.”

In March, Neighborhood Finance increased the amount of money it lends for its programs, making it easier for qualifying buyers like Neighbors to buy homes and complete needed improvements. Qualified homebuyers in Polk County and Cedar Rapids can now access up to $15,000 for down payment assistance as well as up to $15,000 for a forgivable home repair loan. Previously, the cap for down payment assistance was $10,500; the cap for home repair loans was $10,000. Homebuyers can also access a deferred loan to pay for upgrades that improve energy efficiency.

In addition, Neighborhood Finance has raised additional capital that will allow it to extend the term of a second mortgage offered to homebuyers who need lower monthly payments to qualify for a loan. The second mortgage, provided in lieu of private mortgage insurance, can now be extended from 10 years to 15 or 20 years. The interest rate of the loan is 2% and can equal up to 15% of the home’s value.

Increasing lending amounts is a way Neighborhood Finance has been able to blunt the effects of higher interest rates and home prices, said Stephanie Murphy, executive director of the group, which has offices at 4908 Franklin Ave. in Des Moines. 

Boosting the maximum amount of assistance is saving borrowers an average of $134 a month, she said. “It’s almost like we’ve reduced the rate by over 1% just by changing the subsidy that we provide.”

The average interest rate for a 30-year, fixed-rate mortgage is hovering around 6.3%, according to Freddie Mac. In early March, the average rate was 6%. Each shift of 0.1% can add – or subtract – $12 to $18 a month to a payment for a $200,000 loan, or $18 to $27 a month for a $300,000 loan.

Average home sale prices in the Des Moines area are also creeping upward. In 2024, the average purchase price of a home in Polk County that received Neighborhood Finance Corp. financing was $151,687, data from the organization shows. In 2025, it was $181,938, or 20% higher. The average loan amount for a Neighborhood Finance loan in 2024 was $125,346; in 2025, it was $145,936.

“Houses that sell for less than $200,000 in the Des Moines area are hard to find,” Murphy said. “And if you do find them, they probably need some sort of renovation work, which is going to cost some money. … Anything we can do to make home ownership more affordable, we’re trying to do it.”

When Neighbors found a house to buy on Des Moines’ south side, he knew he could afford the mortgage payment, but he wasn’t sure whether he had money available to do any renovations or make the house more energy efficient. Through Neighborhood Finance’s Energy Advantage program, additional insulation was put in the attic and leaky windows were replaced. The deferred energy loan will be repaid when the home is sold or refinanced.

“We’re working really hard to figure out pathways for people to own a home if that’s their dream,” Murphy said.

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Delinquency rate below national average

Through the first four months of 2026, 3.1% of borrowers with home loans through Neighborhood Finance Corp. are 30 days or more behind on payments, data from the nonprofit lending organization shows. The delinquency rate has decreased slightly from late 2025, when it was 3.9%, said Stephanie Murphy, the group’s executive director. Murphy attributes the late payments to “life happens” events such as job loss, illness, divorce or the death of a borrower, rather than borrowers overextending themselves on credit. The delinquency rate is below the national delinquency rate reported by the Mortgage Bankers Association. In the first quarter, 4.4% of mortgage loans on one- to four-unit residential properties were delinquent, an increase from the fourth quarter when it was 4.26%.