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It’s not easy to save half on your home’s value without certain conditions. In addition, the home must be in an area designated by the Department of Housing and Urban Development as a “Revitalization Area.” For three years, the home must be the primary residence. As long as you meet these requirements, you can sell the house after three years and keep any profit from the sale. The City of Chicago has several programs to assist first-time buyers.
The town of Normal offers five-year, forgivable loans of up to $3,000 to help with a down payment and closing costs. The state offers programs through the Illinois Housing Development Authority . Some larger cities, like Chicago and Aurora, and counties like Cook , Lake, and Kane have programs to assist first-time home buyers in their respective areas as well. Low-income individuals who need assistance with downpayment and closing costs for buying a home can benefit from this program. One of the biggest benefits of Access Forgivable is in its title.
Step 3: Find a great real estate agent in Illinois
USDA loans don’t require a down payment if your credit score is decent. The down payment, maybe around 10% of your credit score, falls slightly below the FICO® scale. However, this is still much lower than the usual 20% down payment.
First-time home buyers may receive up to $10,000 in down payment and closing cost assistance. The aid is an interest-free loan that must be repaid when the home is sold, the title is transferred or the property is no longer the borrower's principal residence. Buyers must live or work full-time in the Kane-Elgin Consortium Area; other residency restrictions apply. Buyers must contribute at least 1% of the down payment and complete a home buyer education course.
What are first-time home buyer tax credit programs in Illinois?
There are several IHDA loan programs available through approved lenders that combine a 30-year, fixed rate mortgage with down payment assistance. First-time home buyers in Lake County can receive down payment assistance of up to 5% of the purchase price from the Affordable Housing Corporation of Lake County. The help comes in the form of a no-interest loan with no monthly payments that is forgiven after a little over five years. If the home is sold before then, the loan must be partially repaid.
Eligible properties include one or two unit, existing residential dwellings in Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will or Winnebago counties. According to a news release, the down payment assistance programs will provide $15,000 in DPA to eligible first-time homebuyers. Qualifying borrowers can receive a forgivable grant up to $6,000. Coupled with FHA, Conventional, VA, USDA and IHDA loan programs, FHLBC is available to both first time and repeat buyers in Illinois, Indiana and Wisconsin. IHDA offers several program incentives available to both first time and repeat borrowers throughout all of Illinois. Coupled with FHA, Conventional, VA and USDA loan programs, borrowers can receive up to $10,000 in assistance with a minimal investment of their own funds.
Down Payment Grants in Illinois
These agencies and nonprofits exist to serve you, so ask as many questions as you need to. The IHDAccess Forgivable Loan doesn't have to be repaid if you live in your home for at least 10 years. The loan provides up to 4% of the purchase price up to $6,000 in assistance for down payment and closing costs. HUD counseling programs offer closing cost grants after completion of some of their home buyer education programs. In Chicago, the National Housing Services of Chicago , a HUD-approved housing counseling agency, offers workshops that provide certificates for down payment assistance/closing cost grants. First-time home buyers in Illinois can also qualify for federal programs available from HUD, the Federal Housing Administration , the Veterans Administration , and the U.S.
The down payment assistance programs that are listed here are a sample of what is available for homebuyers in Illinois. This can be your starting point as you search for the right program for your family. The administrator can tell you how to satisfy any home buyer education or counseling requirements.
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The down payment and closing costs needed to buy a house are major barriers to homeownership, but hidden homeownership costs and access to credit can also pose significant challenges. Down Payment Plus is funded through the Affordable Housing Program of the Federal Home Loan Bank of Chicago. The Borrower must have an annual household income at or below 80% of the HUD median income of the area in which the property is located. For participating lenders and more information, visit the Federal Home Loan Bank of Chicago’s website. The Madison County Community Development Department offers five-year, forgivable loans of up to $5,000 to pay for down payments and closing costs.
The City of Aurora is among the communities listed as eligible for the Illinois Assist Homeownership Program. This appears to offer generous grants (meaning you don’t have to repay the money) to home buyers who qualify. The Finally Home program is offered by the Illinois State Treasurer’s Office to guarantee up to 10% of a mortgage in partnership with eligible lenders.
Federal programs offered by HUD, the USDA, and the VA are for all home buyers, regardless of where they live or decide to purchase. Income to qualify for IHDA programs vary depending on whether the area where the home purchase takes place is a “targeted” or “non-targeted” property area. The federal government has designated certain areas as “targeted areas'' to attract homeowners. The household income of a person applying for a USDA loan must fall within 115% of the median income for the area where they wish to live.
Qualifying for a mortgage is one of many challenges you face as a first-time buyer. If you have low to moderate income, bad credit, debt, or need help with your down payment, a first time homebuyer loan in Illinois is a good place to start. Many people who can afford the monthly mortgage payments and have reasonable credit will qualify. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site.
Currently you can deduct 25% of your home purchase cost, or 50% of your home improvement or renovation loan, from your tax bill annually. The Mortgage Credit Certificate program run by the state of Illinois was suspended June 17, 2020, but there are local programs. Earn no more than 80% of area median income , adjusted for household size — for a two-adult household, the maximum income is $59,650. Lake County’s Community Partners for Affordable Housing program serves people looking to purchase a home in Lake County, Illinois’ third-largest county. Up to $3,000–$5,000 for eligible homes in the Neighborhood Revitalization Strategy Area.
Mortgage loans backed by the government — Federal Housing Authority , Veterans’ Administration and U.S. Department of Agriculture — are available to first-time home buyers in Illinois. A higher credit score could yield lower mortgage interest rates, which could mean lower monthly payments — and a lot of money saved over the course of your loan.
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FHA.com's compilation is not a complete list, but it can serve as a starting point in your search for the down payment assistance program or grant for your situation. It is up to the consumer to contact these entities and find out the specifics of each program. However, loans with a smaller down payment come with mortgage insurance and higher interest rates, which may be reduced later, experts say. You'll also have a bigger monthly payment with a larger mortgage. These are the best metros for first-time home buyers in 2023 based on mortgage and rent affordability, housing supply and the share of listings with a price cut, according to Zillow.
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