The dream of owning your first home just got closer to reality. Start saving and deduct the interest earned from your Iowa taxes with Farmers Bank's First-Time Homebuyer Savings Account.


Earn 1.00% APY* on your balance or 1.25% APY with monthly direct deposit.


About the Account

A First-Time Homebuyer Savings Account (FTHSA) is a special type of savings account created by the Iowa legislature to help Iowans save for their first homes. This tax-advantaged account applies to first-time homebuyers and those re-entering the housing market, if they have not owned a home within three years. It includes provisions that allow individuals, including those who already own a home, to make tax-deductible contributions into an account to be used by a designated person saving to own a first home. This means that parents, grandparents, or future new homeowners can open a Farmers Trust & Savings Bank First-Time Homebuyer Savings Account. 

Account Benefits
  • The account is interest bearing. Earn 1.00% APY* on your balance or 1.25% APY with monthly direct deposit.
  • Account holders may exclude from their Iowa adjusted gross income yearly deposits into FTHSA in amounts up to $2,000 a year individually. Married taxpayers who file a joint return may exclude up to $4,000 a year if the account is opened and maintained as a joint account. Your interest grows tax-free!
  • Income from interest earned on a FTHSA is not taxable on state of Iowa tax returns.
  • There are no maximum deposit limits. You can deposit money at any time into the interest-bearing savings account.
  • The state of Iowa tax deduction for account contributions is available for up to 10 years.
  • Allowable deduction limits for contributions adjust annually for inflation.
Account Owner Responsibilities
  • Account holders are responsible for designating a beneficiary of the account and for ensuring the beneficiary's eligibility as a first-time homebuyer. 
  • The beneficiary of the funds must be purchasing their first home within the state of Iowa. The funds can also be transferred to a different beneficiary.
  • Account holders are responsible for ensuring that the funds are withdrawn in connection with a qualified home purchase.
  • Account holders are responsible for keeping receipts and records to support the account's contributions and distributions. 
  • Account holders are responsible to fill out an Iowa department of revenue annual report form and include it with their Iowa income tax return.
  • Account holders are responsible to submit a copy of IRS form 1099 if provided with their Iowa income tax return. 
  • Account holders are responsible to provide a transaction report to the Iowa Department of Revenue when funds are withdrawn.
  • The account must be opened for a minimum of 90 days and a maximum of 10 years with the funds used towards the purchase of a first home.
  • A 10% penalty fee applies to the owner if funds aren't used for a first-time home purchase.

The Iowa Department of Revenue will supply forms for completing these requirements. 

Please refer to the Senate File Legislative Summary for definitive legal guidelines and instructions. 

Download Frequently Asked Questions

*Annual Percentage Yield. APYs effective as of 1/1/18 and subject to change without notice. 

$100 minimum opening balance. A minimum balance fee of $5 per statement cycle will be charged if the minimum daily balance is below $100. An excess item fee of $5 will be charged for each debit transaction in excess of six during the statement cycle. Fees may reduce earnings. Not valid with any other special offers. 

On January 1 of the tenth calendar year after account opening, this account will convert to a Traditional Savings Account. 

Farmers Trust & Savings Bank is not responsible for monitoring or reporting transactional activity on this account, with the exception of interest earned.