Investing in real estate is an upward trend. So, if you’re considering investing in property for the first time, consider homes in Illinois. Admittedly, mortgage and loan processes can be quite intimidating.
With eligibility requirements, insurance, down payments, and closing costs in mind, you should consider first-time home buyer grants and assistance programs to help make purchasing a new home much easier.
In this article, learn more about these first-time home buyer grants Illinois and how they work.
How First-Time Home Buyer Grants Illinois Work
Getting into a first-time home buyer program in Illinois is quite similar to any other homebuyer assistance program. You must be prepared with the paperwork, especially those proving you meet the eligibility criteria. Whether it is for down payment assistance or full mortgage payments, here is the general process you should know.
1. Look For An IHDA Lender
The first thing you have to do is to check the Illinois Housing Development Authority (IHDA) for their authorized list of partners. These lending agencies are the only ones permitted to originate IHDA loans and down payment programs.
2. Check Your Prequalification
Once you select an agency, the loan officer will require you to submit your information to see which loan programs you are eligible for, the interest rates for your classifications, and the fees you may be required to settle. This process may involve asking for your credit report and checking your debt-to-income ratio.
At this point, you may talk to various mortgage lenders and choose to compare their various homebuyer program loan options until you find the best one for your needs.
3. Take A Homebuyer Education Course
Next, the IHDA requires a homebuyer education course before you can close the home of your dreams. To move forward, you should ensure that the course from the housing counselors meets the standards set by the Department of Housing and Urban Development (HUD) or the National Industry Standards for Homeownership Education and Counseling.
4. Find Your Desired Home
Individuals who gain approval will get a prequalification letter that they can use to shop for a home. However, the house must meet the qualified purchase price range for better chances of approval.
In this process, home buyers and their families can work with a realtor for assistance in putting in offers, negotiating with sellers, inspecting the houses and communities, and appraising the residence.
5. Complete A Loan Application
Once they have decided on the property to buy and created a contract to purchase, the next step is finishing the application and sending it to underwriting. Here, there will be another review of the borrower qualification, including ensuring that the credit score requirements and income limits are met.
6. Close On The Home Loan
Finally, the only thing left is to settle closing costs, sign the necessary documents, and get the keys to the new home.
Different First-Time Home Buyer Grants Illinois
First-time home buyers in Illinois get access to government-backed homebuyer programs that aid them through down payment or closing cost assistance. These programs are mainly for low-income to moderate-income applicants looking to buy their primary residence.
Here are the primary options available for first-time homebuyers in the state of Illinois:
IHDAccess Forgivable
The IHDA Access Forgivable program is a statewide program that offers qualified first-time and repeat homebuyers a 30-year fixed-rate mortgage and a second forgivable home loan to pay for down payments, closing costs, or both.
Qualified participants of this program may use this benefit in various mortgage loans, including USDA, VA, and FHA loans. Some of the essential details of this program are:
- The assistance amount is 4% of the purchase price, up to $6,000
- Borrowers must complete a homeownership education course
- The minimum credit score is 640
- The properties eligible include new construction or existing homes
- Borrowers must contribute $1,000 or 1% of the purchase price, whichever is greater
IHDAccess Deferred
With a similar loan process to IHDAccess Forgivable, IHDAccess Deferred also offers a 30-year fixed-rate mortgage with down payment assistance. However, this mortgage loan is interest-free throughout the life of the mortgage. The borrower will not be required to repay the second loan until the home is sold, refinanced, or paid off.
If someone qualifies for the IHDAccess Deferred, they can choose from FHA, VA, USDA, and Fannie Mae HFA Preferred loans. Some of the essential details of this program are:
- The assistance amount is 5% of the home’s purchase price, up to $7,500
- Borrowers must complete a homeownership education course
- The minimum credit score is 640
- The properties eligible include new construction or existing homes
- Borrowers must contribute $1,000 or 1% of the purchase price, whichever is greater
1stHomeIllinois
1stHomeIllinois is a state grant that offers $7,500 to purchase property in Cook, Marion, St. Clair, and Winnebago counties. This program exclusively benefits first-time home buyers or people who have not owned a home in the past three years. The amount may be used for down payment requirements or closing costs.
Downpayment Plus And Downpayment Plus Advantage
The Federal Home Loan Bank of Chicago offers up to $6,000 in down payment and closing-cost assistance through the Downpayment Plus And Downpayment Plus Advantage. To avail of this program, the buyers must apply for a home loan with a member of FHLB Chicago or a non-profit organization.
Move Into Your First Home In Illinois Today!
If you want to purchase a house but need financial support to cover some of the costs, first-time home buyer grants Illinois might provide the boost you need. Agencies and local governments scattered across the state offer financial assistance, so research resources to find the best one for your home purchase.
Aside from these grants, check out our list of available first-time homebuyer assistance programs in Illinois.
