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If you’re looking to buy a home in Illinois, you could have access to first-time homebuyer assistance programs that provide fixed-interest mortgages along with down payment and closing cost assistance loans. You’re considered a first-time homebuyer (and potentially eligible for these programs) if you haven’t owned a home in the past three years, but some programs assist all types of buyers.
Illinois first-time homebuyer loan programs
Through its Access Mortgage program, the Illinois Housing Development Authority (IHDA) provides fixed-rate loans offered through a network of partner mortgage lenders. These loans also feature different forms of down payment and closing cost assistance.
IHDA mortgages don’t require a down payment, but you do need to contribute $1,000, or 1 percent of the purchase price, whichever is greater. However, you should make a down payment if you can afford it. Putting down at least 20 percent of the purchase price removes the requirement to purchase private mortgage insurance (PMI).
IHDA Access Forgivable Mortgage
IHDA’s Access Forgivable Mortgage program offers a fixed-rate 30-year mortgage — either a conventional, FHA, VA or USDA loan — with as much as 4 percent of the purchase price, up to $6,000, in closing costs and down payment assistance. This assistance loan doesn’t need to be paid back as long as you live in the home for at least 10 years.
To qualify, you’ll need a minimum credit score of 640. You also need to meet certain income and purchase price limits that vary by county and household size.
IHDA Access Deferred Mortgage
IHDA’s Access Deferred Mortgage program also offers a 30-year fixed-rate mortgage and 5 percent of the purchase price, up to $7,500, in down payment and closing cost assistance. This comes as an interest-free loan that you don’t need to pay back until your loan’s maturity date, or when you sell your home or refinance your mortgage.
To qualify for an IHDA Access Deferred Mortgage, you need a credit score of at least 640. As with the IHDA Access Forgivable Mortgage, income and purchase price limits apply.
IHDA Access Repayable Mortgage
IHDA’s Access Repayable Mortgage package includes a 30-year fixed-rate mortgage and a loan for 10 percent of the purchase price, up to $10,000. Designed to help cover down payment and closing costs, this loan is repaid in monthly installments over a 10-year period. The Repayable program has similar credit requirements and income and purchase price limits as other Access programs.
Peoria Down Payment Assistance Program
One of Illinois’ leading burgs, the city of Peoria offers a grant of up to $5,000 to qualified homebuyers purchasing a single-family home within a qualified census tract. There is a purchase price limit: Your home can’t cost more than $125,000 — which sounds low, but actually is just about at the area’s January 2023 median listing price of $120,000, according to Realtor.com.
Remember that the IHDA doesn’t offer mortgages directly; these programs are offered by IHDA-approved mortgage lenders. If you believe you qualify for a first-time homebuyer program through the state, visit the IHDA website for more information and to take next steps.