A new program tailored for first-time homebuyers, veterans or anyone who hasn’t owned a home in the last three years will help those living in Cook and nine other Illinois counties purchase a new one- or two-unit property.
The 1st HomeIllinois loan program launched Tuesday. It provides $7,500 cash assistance for down payment and closing costs, with an interest rate of 4.125 percent on a 30-year, fixed-rate mortgage. However, the down payment assistance is forgivable over five years. Borrowers have a choice of FHA, VA, USDA or Conventional loans. Buyers are required to pay $1,000 or 1 percent of the purchase price, whichever is greater.
“The $7,500 is the complete down payment required,” said Yale Valdez, vice president of mortgage lending at Guaranteed Rate Inc. “If you, for instance, purchased a $100,000 FHA condo, townhome or house, you could use $3,500 as the down payment and the other $4,000 for closing costs. In this case, you would only need the $1,000 required down payment from your own funds.”
Here’s what you need to know:
– Borrower income limits are up to $106,400 for a family of three or more.
– The buyer must have a credit score of at least 640.
– The home must be a primary residence.
– The buyer must complete online or in-person homeownership counseling.
– He or she must meet income and purchase price limits.
“1stHomeIllinois is the latest move in Illinois Housing Development Authority’s holistic strategy to help neighborhoods stabilize and to reinvigorate the economy,” IHDA Executive Director Mary R. Kenney said in a press release. “By putting programs in place, like 1stHomeIllinois, we are helping qualified first-time buyers get into the marketplace and ensuring that communities rebound.”
The down payment assistance is funded through the U.S. Department of Treasury’s Hardest Hit Fund, a resource that aims to curb foreclosures in Illinois. Besides Cook, the other targeted counties include Boone, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will and Winnebago.
“Many first-time homebuyers have been kept out of the marketplace since 2010 due to debt-to-income restrictions, larger down payment requirements and higher credit score requirements,” according to a press release from the Illinois Housing Development Authority.
According to the Illinois Association of Realtors, the percentage of first-time homebuyers has decreased dramatically since 2008, with first-time buyers making up only 33 percent of total home purchases in 2014. This is still below the norm of 40 percent. 1stHomeIllinois gives buyers in the select counties an incentive to purchase, the press release said.
For more information, visit www.ihda.org or call Valdez at 630-745-0901 or 773-250-5917.
Victoria Marty has written for newspapers and magazines for more than 15 years and recently moved to the Lincoln Square, Chicago area. A frequent runner who loves learning and exploring new places, she has perfected the art of getting lost while simultaneously finding unique landmarks, boutiques and out-of-the-way nooks worth writing about. Her blogs are geared toward the newly transplanted who want to learn as much about Chicago as they can, as quickly as possible.