Down Payment Assistance Programs for First-Time Homebuyers in Illinois

Illinois is a diverse and vibrant region that is known for its rich history. The state has something for everyone whether its attractions such as Abraham Lincoln Presidential Library, the bustling lifestyles or its diverse cultural heritage.

However, Illinois is currently facing a significant housing crisis characterized by high house costs which puts a strain on the finances. This makes it difficult for first-time homebuyers to make their dream of becoming a homeowner come true.

This is why Illinois and different organizations are offering assistance programs. These programs are designed to make homeownership affordable, especially for citizens who come from low- to moderate-income households.

Looking for Assistance in a Specific Part of Illinois?

Do you want to buy a home or property in Illinois but are worried about the down payment and closing costs? Well, you are not alone as many people are finding it difficult to afford. Here is an in-depth look into some payment assistance programs available throughout the state.

Down Payment Assistance In Illinois

Illinois is reeling with a housing crisis with the median home price with the median down payment for a house being approximately $27,348 which makes up around 14.3% of the home purchase price.

The amount reflects the challenges for many potential homebuyers, especially first-time buyers who have to deal with increasing home prices and mortgage rates. Illinois Housing Development Authority (IHDA) offers several programs that provide down payment assistance programs to borrowers who want to overcome the financial barriers that come with homeownership.

Here is an overview of different initiatives that provide final coverage to eligible applicants.

1stHomeIllinois Program

The 1stHomeIllinois Program assists first-time homebuyers and veterans in Illinois which helps them tackle the challenges of purchasing a home in a competitive housing market.

Fundamentals

• Assistance Type: Forgivable grant
• Sponsor: Illinois Housing Development Authority (IHDA)
• Assistance Amount: $7,500 (at maximum)

Eligibility Requirements

• The applicants must be first-time homebuyers, meaning they have not purchased a home or become an owner in three years.
• The application of borrowers with a credit score of less than 640 will not be entertained.
• Borrowers have to contribute either $1,000 or 1% of the purchase price (whichever is greater).
• The purchased homes should be located in counties such as Kane, McHenry, Winnebago, DeKalb, Marion, Boone, Will, Cook, Fulton, or St. Clair.
• The purchased house should only be for one- or two-unit properties and should serve as the applicant’s primary residence.
• Applicants are required to complete a homeownership counselling course before closing.

SmartMove Program

The SmartMove Program helps Eligible homebuyers cover down payment and closing by providing forgivable mortgage/loans provided if the homeowner resides in the property for at least a decade.

Fundamentals

• Assistance Type: 30-year fixed-rate mortgage/ zero-interest second loan
• Sponsor: Illinois Housing Development Authority
• Assistance Amount: $6,000 (at maximum)

Eligibility Requirements

• Applicants must have a minimum credit score of 620 for loans approved by the Federal Housing Administration (FHA), U.S. Department of Agriculture (USDA), and Veterans Affairs (VA) loans, or 660 to qualify for conventional loans.
• The applicants’ household income should be within the specified limits based on the county and family size.
• Applicants are required to Borrowers must contribute at least 1% of the purchase price or $1,000.
• The home purchased should serve as the applicant’s primary residence.
• Borrowers have to complete a HUD-approved homebuyer education course to make sure borrowers are ready to fulfil the responsibilities of homeownership.

Illinois Down Payment Assistance Program FAQs

Are there restrictions on how down payment assistance funds can be used?

Yes, DPA funds are typically restricted to specific uses, such as down payments and closing costs. They cannot be used for other expenses like home repairs or renovations.

Who qualifies for Down Payment Assistance in Illinois?

Eligibility for DPA programs often includes being a first-time homebuyer, meeting income limits, and purchasing a primary residence.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.