In Illinois, there are down payment assistance programs from the Illinois Housing Development Authority (IHDA) and some of the counties and cities may offer them also. These programs can be used with conventional 30 year fixed financing or government insured financing, such as VA, FHA and USDA. I can provide assistance with any of these types of financing and assistance programs. IHDA and the County grants both file a “second mortgage” on the home, so we only use one of the assistance programs with the 1st mortgage. All of these programs require that the borrower have 1 % of the purchase price, minimum of $1,000 into the transaction.
IHDA currently offers several programs to choose from. One is 4% of the purchase price, maximum $6,000, but is I forgiven over a 10 year period. Another is 5% of the purchase price, maximum of $7,500, which is paid back when you sell or refinance the home and the third option is 6% of the purchase price, maximum of $10,000, which is paid back monthly in the amount of $83.33 a month. All counties are eligible and you do not have to be a 1st time homebuyer for these programs. Applicant must meet the household income and purchase price limits, and IHDA requires a credit score of 640. The borrower’s “debt to income ratio” needs to be below 45% and all borrowers are required to take a homebuyer education class, which can be on-line. As a lender, we take care of registering for this assistance for the borrower, and it does not add any time to the normal processing of a loan, so we can usually close within 30 days. In St Clair, Madison & Monroe counties, the maximum household income to qualify for this assistance is $98,160. The maximum purchase price for a SFR is $283,348 and $362818 for a 2 unit.
Locally, both Madison and St Clair County offer similar assistance for 1st time homebuyers (cannot have owned a home in the past three years to qualify). They offer assistance in the amount of one half of the down payment, not to exceed $2,500, plus a portion of the closing costs. The amount awarded is usually $3,000 – $5,000. They are 0% loans that are forgivable over 5 years. Both require that your debt to income ratio be below 41 % and require that you take a homebuyer education class. Use of the county grants usually does add to the time needed to close on the purchase of the home. These transactions usually take 60 days. The maximum value of the property being purchased must not exceed the program limit of $148,000 for existing homes that have been previously occupied and $227,000 for newly-constructed homes that have not been previously occupied. Below are the household income guidelines for the County Grant programs.
I would be happy to assist your clients with any of these programs. The first step is to call me at 618-719-3695 for a free pre-approval where I will determine which program they qualify for and is best for them.
Info provided by Jody Talick, Loan Consultant NMLS# 395282
MOBILE (618) 719-3695 | DIRECT (618) 722-5233 FAX (618) 589-1859
4505 North Illinois Street, #5, Swansea, IL 62226