If you’re looking to buy your first home in Illinois, you have access to a few state-specific resources. The state supports first-time homebuyer assistance programs that provide fixed-interest mortgages along with down payment and closing cost assistance loans.
Under most of these programs, you’re considered a first-time homebuyer if you haven’t owned a home in the past three years, but some assist all types of buyers, and some are designed to help people with damaged credit. Here, we’ll explain first-time homebuyer programs in Illinois and how to qualify for them.
IHDA Access Mortgage
Through its Access Mortgage initiative, the Illinois Housing Development Authority (IHDA) provides Illinois residents with access to various first-time homebuyer programs. These packages include fixed-rate loans offered through a network of partner lenders. They also feature different forms of down payment and closing cost assistance.
According to the IHDA website, IHDA mortgages through the Access Mortgage program don’t require down payments, 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 typically removes the requirement to purchase private mortgage insurance (PMI).
IHDA Access Forgivable Mortgage
The IHDA Access Forgivable Mortgage program offers a fixed-rate 30-year mortgage through various lenders, so you can shop around for the best mortgage rate. The IHDA website has a tool that helps you find the best lender in your area.
Through this program, you can also get 4 percent of the home purchase price, up to $6,000, in closing costs and down payment assistance. This loan doesn’t need to be paid back as long as you live in the home for at least 10 years.
Mortgages are available through FHA, VA, USDA or an HFA Preferred loan. These types of mortgages are backed by the government, so qualifying for one is generally easier than getting approved for a conventional mortgage. They also generally have lower interest rates and little to no down payment requirements.
To qualify for an IHDA Access Forgivable Mortgage, you 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. You can learn more about these details by visiting the IHDA income and purchase price limits chart.
IHDA Access Deferred Mortgage
The IHDA Access Deferred Mortgage program offers a 30-year fixed-rate mortgage through FHA, VA, USDA or an HFA Preferred loan. It also offers 5 percent of the home 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 IHDAccess Forgivable Mortgage, the same income and purchase price limits apply.
IHDA Access Repayable Mortgage
The IHDA Access Repayable Mortgage package includes a 30-year fixed-rate mortgage. It also includes a loan for 10 percent of the purchase price, up to $10,000. Designed to help cover down payment and closing costs, this loan can be repaid in monthly installments over a 10-year period.
Your loan options include FHA, VA, USDA or an HFA Preferred loan. You need a credit score of at least 640 to qualify. You also have to meet IHDA income and purchase price limits.
Now that you have the lowdown on what the IHDA has to offer, you’re ready to move forward. Remember that the IHDA doesn’t offer mortgages directly; they are offered by IHDA-approved lenders. You can find the list of the ones in your area by visiting the IHDA website. Generally, these lenders set their own rates, terms and qualification requirements, so shop around to find the option that works best for you.