If you’re a first-time homebuyer, buying Chicago real estate market is a genius idea. But if you hesitate due to the potential costs of this endeavor, then the Prairie State has a number of first-time homebuyer programs in Chicago that will help you to become a proud homeowner.
Programs across Illinois
The Illinois Housing Development Authority (IHDA) provides Illinois residents with several programs to help with housing costs. To be eligible, some of the general requirements include:
Ability to make monthly payments and meet the limits for household income and purchase price;
- A minimum credit score of 640;
- Contribute either $1,000 or 1% of the purchase price, whichever is greater;
- The property must be lived in as the primary residence; and
- Complete homeownership counseling before closing (either in-person or online).
- 1stHomeIllinois
If you are a first-time homebuyer, a veteran, or a resident who has not owned a home in three years, then this IHDA program could be for you. 1stHomeIllinois generously provides $7,500 in assistance for down payment and closing costs which do not need paying back. It is combined with a secure 30-year fixed-rate mortgage from any of these loan types: FHA, VA, or USDA.
1stHomeIllinois is available only for one or two-unit properties in the counties of Cook, Marion, St. Clair, and Winnebago.
- IHDAccess Forgivable
Available statewide to both first-time and repeat homebuyers, Forgivable is best for low-income residents who need help with upfront costs. This IHD program gives down payment assistance of up to 4% of the home price up to $6,000 in cash over a 10-year duration. Since it lives up to its name of being “forgivable,” there’s no need to pay back the monthly payments. It is also available for all mortgage types, thus giving you a wide berth of flexibility.
- IDHAAccess Deferred
All first-time and repeat homebuyers in Illinois are eligible to apply for Deferred. This gives you 5% of the purchase price with up to $7,500 interest-free assistance for down payment and closing costs. Like Forgivable, it is available for all mortgage types and there’s no need for monthly payments. However, regular mortgage payments are not forgivable and must be paid off when you sell the home, refinance your mortgage, or complete payments for your mortgage.
- IHDAAccess Repayable
Repayable offers the most assistance out of all IHDAccess mortgages at 10% of the purchase price with up to $10,000 for down payment and closing costs. However, unlike Forgivable and Deferred, you will have to repay the monthly costs over 10 years. Everything else, from available mortgage types to eligibility requirements, is the same.
Programs in Cook County
- Chicago Homebuyer Assistance Program
Available to Chicago City residents, the Homebuyer Assistance Program gives up to 7% of the loan amount to help cover down payment and closing costs. To be eligible, you must meet the following requirements:
- FHA, VA, and USDA loans
- An annual income of $88,435 or less (regardless of family size)
- A minimum credit score of 580
- Fannie Mae/Freddie Mac loans
- An annual income of $131,775 or less (regardless of family size)
- A minimum credit score of 640
If you qualify, you must pay either $1,000 or 1% of the home purchase price before closing, whichever is less. For first-time homebuyers, you have to complete an 8-hour homebuyer education course to become eligible.
- FHA, VA, and USDA loans
- NeighborhoodLIFT
Sponsored by Wells Fargo and NeighborWorks America, NeighborhoodLIFT provides Cook County homebuyers with $15,000 in down payment assistance. While the income limits may be higher, you could get up to $17,500 if you are one of the following:- Military service member
- Veteran
- Law enforcement officer
- Pre-K to 12th-grade teacher
- Paraprofessional
- Firefighter
- Emergency medical technician
The program even offers first-time and repeat homebuyers with great tips for buying a house, financing one, and home management strategies.
NeighborhoodLIFT is available on a first-come-first-served basis, so make an appointment as soon as you can to determine your eligibility for the program. First, create an account on their website then upload a mortgage pre-approval from an approved lender and a fully-executed purchase and sale agreement. Once completed, you can schedule an appointment.
- Wintrust Community Bank Homebuyer Grant Program
First-time homebuyers can get grants of up to $2,000 through Wintrust
Mortgage. The program is available to residents of the following counties:- Cook
- DuPage
- McHenry
- Will
- Kane
- Lake
To be eligible, you must meet the following requirements:
- The application must be for your first mortgage
- Depending on the household size, annual household income must be 80% or below the HUD median of the county where the home is located. Click here for the Area Median Income (AMI) chart of Chicago.
- At least $1,000 of personal funds should be used for buying the home
- Complete a homebuyer counseling program
- Application is for a minimum 5-year term loan and an initial interest rate lock period of five years minimum for adjustable rate mortgages
With our professional real estate team at 606 Brokers, buying a home in Chicago has never been easier. Call us today at 773.870.5101.
References:
https://www.nerdwallet.com/blog/mortgages/illinois-first-time-home-buyer-programs/
https://neighborhoodloans.com/first-time-home-buyer-programs/
https://www.chicago.gov/content/dam/city/depts/mayor/general/HomeBuyerAssistanceProgramFlyer.pdf
https://www.nerdwallet.com/blog/mortgages/illinois-first-time-home-buyer-grants/
https://homebloq.com/homebloq-university/2019/5/14/illinois-2019-first-time-homebuyer-programs
https://www.ihda.org/lenders-realtors/lending-programs/