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Some conventional loan programs offered through Fannie Mae and Freddie Mac also have features that appeal to first-time home buyers in Illinois. If you don’t want to put money down that way, you can get a Home Possible® mortgage with Freddie Mac with just a 3% down payment. Home Possible® loans come with fixed rates ranging from 15 to 30 years and adjustable rates 5/5, 5/1, 7/1, and 10/1. In addition, your credit history will not be a factor in qualifying. All homes, townhomes, and condominiums purchased under the program must pass both a visual general inspection and a lead-based paint inspection to ensure the home meets housing quality standards.
They can offer independent advice on buying a home, help connect you with homeownership assistance programs specific to your community, and provide you other information. Search online for a HUD-approved housing counseling agency by zip code here. The Kankakee Homebuyer Incentive Program, or KHIP, offers $2,500 grants on a first-come, first-served basis for residents buying a home within Kankakee city limits. The grants are for low- to moderate-income households or families buying homes in low- to moderate-income census tracts. Applicants are required to complete a home buyer education course.
HomeStart’s Homebuyer Incentive Program
All loans are offered through Neighborhood Lending Services, Inc. , a nonprofit Illinois Residential Mortgage licensee (#M00661) and an Equal Opportunity Housing lender. Davis said lower down payment mortgages may also preserve savings for future home expenses. "There's less stress if they're able to close and still have some money in their pocket," she said. "The affordability hurdle is very tough," said Matt Hackett, manager of operations at Equity Now, a mortgage lender in Mamaroneck, New York, that operates in five states.
The Joliet Down Payment Assistance Program offers grants of up to 20% of the home's purchase price. The program, in cooperation with the Will County Center for Community Concerns, is open to low-income applicants buying a principal residence within the Joliet city limits. The assistance is in the form of a zero-interest, forgivable loan.
Community Connections Home Buyer Assistance Program
Depending on your income and location, you may also qualify for first-time home buyer grants or programs run by state and local governments to help cover your down payment and closing costs. "It's definitely a good option," Hackett said, urging buyers to speak with a local mortgage expert familiar with programs in their area. This program from the City of Chicago offers assistance with down payments and closing costs as well as home affordability and lead-based paint removal. First and second mortgage loans are provided for the purchase or rehab of single-family and multi-unit homes. Additionally, these loans are either deferred or completely forgivable, depending on the circumstances.
USDA home loans, also known as Section 502 Single Family Guaranteed Loan Program, encourage rural and suburban homeownership by offering mortgages with no down payment to low-income borrowers. Loan processing is quicker for borrowers with a credit score of 640 or higher, regardless of their nontraditional credit data, like rent or utility payments. You can get one of these mortgages only in certain areas, but you don’t have to be a farmer or rancher to get one. Third-party lenders provide VA loans, but Veterans Affairs insure VA loans themselves. Military families often face difficulties accessing mortgage loans, a common financial problem. However, they do not need to pay a down payment or receive private mortgage insurance .
Federal Home Loan Bank of Chicago | Downpayment Plus Programs
Access Repayable, however, provides loans for low- and middle-income consumers who cannot afford standard down payments. The program provides down payment assistance of up to $10,000 for home purchases. This IHD program requires repayment over ten years, unlike the others. A down payment or closing cost assistance of 10% of the purchase price is available for up to $10,000. You pay back this loan over ten years, which is also interest-free.
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.
Financial Assistance for Homebuyers in Illinois
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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.
Contact the housing department of the community you’re interested in buying in for details. Provides up to $10,000 in down payment and/or closing-cost assistance. With so many different home buyer programs out there, it might be hard to choose which one is best for you. An experienced real estate agent can help you sort through your options. Although it’s not a financial qualification, some programs have maximum home purchase price thresholds as well.
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.
The maximum is no more than $332,235 for non-targeted areas in Illinois largest counties. The Access Repayable scheme works in much the same way as the Access Forgiven and Access Deferred schemes. Borrowers benefit from a fixed-rate loan with a competitive interest rate and can contribute as little as $1,000, or about one percent of the home’s purchase price, out of pocket. When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.
These certificates are valid for one year from the date of completion. Home buyers also typically have to pay 3–6% of a home's price in closing costs. Unless you qualify for a loan or grant to cover closing, you would be on the hook for $6,530–$13,060 out of pocket. Once you buy your home, your monthly mortgage payment will vary based on your loan amount and the interest rate. Most first-time home buyer assistance programs have some minimum financial qualifications that buyers need to meet.
The neighborhood you live in will impact everything from your daily commute, to where your kids go to school, to where you go out to eat (or order takeout!). In Illinois, homeowners typically spend $2,265 on maintenance costs annually, but this can vary widely based on the house. In general, you should save 1% of the house's value each year for repairs. Households in Cook County have a median annual income of $69,429 — 80% of that is $55,543. To be considered low-income in Illinois, your income will have to be less than or equal to 80% of Fannie Mae's area median income for your specific area.
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