Financing a building project can be difficult, especially as costs continue to rise into 2026. Fortunately, the state of Iowa offers a range of financial support to help businesses afford their buildings and reinvest in their communities. From energy efficiency to historic preservation incentives, the opportunities below help reduce barriers for Iowans striving to build and renovate buildings.
1. Downtown Loan Guarantee
The Downtown Loan Guarantee program is run by the Iowa Economic Development Authority to help downtown businesses secure private financing from federally insured lenders for redevelopment and rehabilitation projects. To qualify for the loan guarantee, projects must include a rehabilitation component, meet design review standards, and include an eligible housing component, among other criteria. The program can guarantee up to 50% of loans under $500,000, or up to $250,000 for larger loans, with terms generally lasting five years. The state of Iowa will back a portion of the loan to reduce the lender’s risk in the event of borrower default, but there’s a one-time fee for that backing.
2. Iowa Energy Saving Loan Program
The Iowa Energy Saving Loan Program promotes energy-efficient upgrades by bringing affordability to Iowa-based businesses, nonprofit organizations, and public entities that own commercial buildings or affordable multifamily buildings. Owners of multifamily buildings must have at least twenty units and participate in either the Section 8, Low-Income Housing Tax Credit, or the HOME Investment Partnerships programs administered by the Iowa Finance Authority. This program can be used to fund qualifying energy audits, upgrades, and retrofits that improve energy efficiency and comfort. If an energy efficiency audit is conducted, this revolving program helps Iowans afford energy at interest rates between 0% and 2% and includes a time-origination fee.
3. Main Street Loan Program
Developed from the partnership between Main Street Iowa and the Iowa Finance Authority, the Main Street Loan Program exists to encourage downtown revitalization by providing loans for residential and commercial development. The program is particularly focused on rehabilitating upper-floor housing, restoring commercial properties, and infill construction in downtown districts. Loan amounts fall between $50,000 to $250,000 with terms from about 3-15 years. There’s a 1% origination fee required at closing with an inclusive debt overage ratio of 1.25:1. The borrower must invest 10% of the project cost and demonstrate assurance that the loan will be repaid. Projects must first be reviewed by Main Street Iowa for design in accordance with downtown revitalization objectives. If approved, the Iowa Finance Authority conducts underwriting and makes final loan decisions on a rolling basis.
4. The Iowa Historic Property Rehabilitation Property Tax
The Iowa Property Tax Exemption Program provides a temporary property tax exemption for historically significant buildings that undergo rehabilitation. The program reduces the tax burden from increased property value once improvements are made. To qualify, properties must meet historic designation requirements and receive certification of substantial rehabilitation, as defined by state law, from the State Historic Preservation Officer, filing the application before February 1st of the assessment year. If approved, properties may receive a 100% exemption on the increased assessed value for four years, followed by a four-year phase-in of that increased value—25% per year until fully taxable in the eighth year. The program is administered at the county level, with annual application deadlines and prioritization procedures established by the local boards of supervisors.
Making Your Project Possible
These opportunities open up doors for building owners to be able to afford building and property improvements. By providing low-interest financing and tax incentives, the state of Iowa creates a more practical approach for property owners and building developers. If you’re considering a building project, we can help identify additional funding opportunities that align with your goals and help you maximize your investment.