First Home Illinois – IHDA Loan
Big news for first-time homebuyers in specific counties in Illinois!
If you’re looking to buy your first home in the counties of Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will, or Winnebago, then you can now apply for the IHDA’s 1st Home Illinois loan program.
The 1st Home Illinois program offers competitive rates and down payment assistance for first-time homebuyers, veterans, and anyone who hasn’t owned a home in within the last three years. This program encourages and makes buying a home within reach for many first-time homebuyers.
Now that interest rates are at historic lows and rents have skyrocketed, buying a home with 1st Home Illinois seems like a no-brainer.
But what advantages does the 1st Home Illinois program offer to applicants?
And how do you qualify for one? Is it difficult?
All of these are good questions and will be answered below.
1st Home Illinois Benefits
Illinois Housing Development Authority (IHDA) loans are designed to be streamlined, making the loan process much simpler for first-time homebuyers. This is already a benefit in and of itself, but the 1st Home Illinois program offers much more.
The benefits of the 1st Home Illinois programs offers:
- Down Payment Assistance: 1st Home Illinois can supply buyers with up to $7,500 to help bolster a down payment on a home. This money can also be used to cover closing costs if the buyer wants to.
- 30-year FRM: The 1st Home Illinois program is offered as a 30 year fixed-rate mortgage. This means your interest rate and monthly payments will stay the same over the course of your term. First-time homebuyers are attracted to this option because it gives them time to pay off their mortgage. This also gives borrowers access to competitive interest rates to make their monthly payments more affordable.
- Flexibility: The third advantage of the 1st Home Illinois program is that there are a variety of options available to customize your loan as needed. It can also be used for multiple types of mortgages, such as a conventional, FHA, USDA, and VA loan.
Wow! That’s a lot of good news for homebuyers in Illinois. But what about the qualifications?
1st Home Illinois Qualifications
Just like any other mortgage program, the 1st Home Illinois program has a set of qualifications that need to be met in order to make use of it. As helpful as the program is, you still need to follow the guidelines put in place by the IHDA.
In order to qualify for the 1st Home Illinois program, here’s what you’ll need to know:
- Location: In order to be eligible for the 1st Home Illinois program, a home must be in the Illinois counties of Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will, or Winnebago.
- Number of Units: One and/or two unit properties are the only types that can bought with this program.
- Type of Buyer: In order to qualify, you must be a first-time homebuyer, a veteran, or you haven’t owned a home during the last three years (within the counties mentioned).
- Finance: Borrowers will also be required to contribute either $1,000 or 1% of the purchase price of the home (determined by whichever is greater).
- Income & Purchase Price: The IHDA has Income and Purchase price limits that need to be followed. You can find the limits from the IHDA here.
- Credit: The IHDA also has credit requirements that need to be met for the 1st Home Illinois program, which needs to be 640 or above.
- Residence: The 1st Home Illinois program can only be used on a home that you intend to use as your primary residence.
- Counseling: The IHDA also requires you to take a homeownership counseling course. This course is available for in-person and online classes. If your credit score does not meet the minimum requirement, counseling is offered to those to help strengthen your score and prepare you for your homeownership.
That’s certainly a large amount of requirements, but they’re not impossible to overcome. Just like any other mortgage program, you can clear these obstacles with proper planning and patience.
Now, if you are interested, you’re probably wondering, how do you apply?
Are there other expenses or fees within this process?
Again, we have all the answers to your questions!
How do I apply?
Many lenders have IHDA loans available for applicants to take advantage of.
However, keep in mind ONLY applicants who are first-time homebuyers, veterans, or anyone who hasn’t owned a home within the last three years are qualified to apply.
If you are interested in applying, find a top-performing lender near you so they can appropriately assist you on landing your dream home.
Luckily for you, Neighborhood Loans is specialized and familiar with helping families finance an IHDA loan.
Stop by today and start a mortgage application to get this process started!
Before heading over, make sure you bring the following paperwork and have your personal information on hand, so they can accurately determine your eligibility.
Are there other expenses?
As mentioned before, an advantage using this program offers down payment assistance of $7,500.
This amount does not need to be paid back, however, you need to live in the home for a minimum of five years.
If you were to sell your home before the five-year mark, a portion of the down payment will need to be repaid.
As for closing costs, you will need to fund this expense on your own.
Or if you would like, use the down payment assistance towards your closing costs.
Typically, closing costs include the following: title company closing fee, attorney fees, and title and insurance policy fees.
These charges are the final stretch of your mortgage process and seals the deal on your real estate transaction.
Before the keys are handed over, these expenses must be handled.
Fortunately, your lender will be able to estimate your closing costs to give you a better idea of what you can expect.
If you are wondering what else happens on closing day, here’s everything you need to know.
Also, nn February 1st, 2018, The Illinois Housing Development Authority (IHDA) rolled out THREE new programs that helps people statewide with limited income purchase a home.
Can the 1st Home Illinois program be used to purchase a condominium or townhouse?
Yes, the 1stHomeIllinois program can be used for a condo or townhouse as long as it is a one-unit.
How much of a down payment would I need to save before getting the down payment assistance once qualified?
IHDA requires borrowers invest 1% of the purchase price into the loan. There are other closing costs and settlement charges that also need to be factored into how much money you need to show. We can show you how to minimize your out of pocket investment into your home purchase!
Im buying a house FHA but i was not aware of this program closing date is next month can i still sign up for this?
Hi Humberto –
We do normally need about 40 days to process IHDA loans, but obtaining a Grant of $7,500 may help you reduce your bottom line due at the closing table.
If you would like to discuss further so you know all of your options, please let us know!
Are there any plans on changing the income limits? My wife and I are about $1000 over the limit for McHenry county.
If you are $1,000 over the limit, can I ask how you’re calculating that income? Are you part of a household with only 1 or 2 individuals? If so, current maximum income is $79,432. If you were to have 3 or more individuals in your household, the maximum income is $91,347.
We do have another down payment assistance program you may qualify for. This will be based on the location of the property and assists clients by matching their down payment funds up to 5% of the purchase price and perhaps will help along with crediting closing costs as well.
If you would like further information, please contact our Senior Loan Banker, Greg Pusch at firstname.lastname@example.org and he will be happy to provide more information for you.
Are there any exceptions to the credit limits as I’m getting an fha loan and I know the credit requirement is 660. However I’m at a 653 and it would suck to lose 7500 over 7 points especially when conventional loan requirements is only 640?
There are no exemptions with IHDA. We would have to be able to qualify you for conventional financing which does require currently a middle credit score of 640 or perhaps if you need to go the route of FHA, perhaps we can help you explore ways to boost your credit 7 points?
If I had a condominium in Cook county and now want to purchase a home. Would I still qualify? I’m also a veteran
Hey Renia –
It depends on when you sold your home. If you owned the home within the last 3 years, you would not be eligible for the IHDA First Home Loan.
However, since you are a veteran you may be qualify for our VA Loans which allow up to 100% financing – no down payment requirement.
Hope this helps!
If you would like more information, please fill out our express application. https://neighborhoodloans.com/express-application/
We would be more than happy to get you in touch with one of our VA Home Loan experts who can further assist you and answer all your questions about your specific loan scenario.
what are current rates 30 year fixed? Are you higher than most because of the down payment assistance program? How are you 1 of three qualified lenders for this program in such a huge state?
If you become the beneficiary of a first time home buyer grant, how much time has to pass or what are the requirements to have the loan forgiven as long as you continue to reside in the home?
Under the parameters of the IHDA Grant in the amount of $7,500 which goes for first time homebuyers, you would be required to reside in the property for the first 5 years of homeownership. Once the 5 years passes, that Grant, which was recorded with the County as a second mortgage, will be released from the title of your house.
If you have further questions or concerns, please feel free to reach out to us to explore all possible lending options available to you today.
How do I calculate my total income? Do I go by Gross Pay or wages reported on my w2?
As a lender, we use your gross wages when calculating income. On your W-2 you can see this on box 5, which is ‘Medicare wages and tips’. This is usually the higher number and is represents your full salary/income with your employer.
Please let us know if you have any other questions about your particular scenario. We’re more than happy to further assist you and go over what options may be available to you!
Does anyone have this kind of help to purchase a home in Washington County Illinois.
Hi Sheri – This particular program is not available for Washington County.
If you would like, you can contact us and one of our mortgage bankers will be able to see if you qualify for alternative programs that do include Washington County!
I’m looking at a house in Madison county. I am a first time home buyer. Are there any grants available that you know of?
Hey Brandon –
Great News! There is a $7500 down payment assistance program available for first-time home buyers in Madison County called 1stHomeIllinois. Feel free to us at 1.800.207.8595 if you have any further questions about the program or would like to begin your home buying process.
We look forward to helping you buy your first home Brandon! =)
If my credit score is 645 will I meet the credit requirements in cook county?
If you are looking at the IHDA Down Payment Grant program, a 640 middle score (or better) can qualify you for a Conventional Loan. If we cannot approve you for the Conventional Loan with IHDA, then we will work with you to re-score your credit over 660 so can qualify for FHA financing.
There are some other factors to consider, such as you will need to invest 1% of the purchase price into the loan, the Grant will be a silent 2nd mortgage on your home’s title for the first 5 years and IHDA will look at Household Income which has maximums depending on how many individuals will be in your household (living with you in the home).
Often times these questions can very confusing to process.
Anne – let us know if this helps!
Do you go off of 2016 income shown in W-2’s or do you use current income from paycheck stubs to determine qualicication?
We will review your income to see what was reported on your W2 in 2016 but will also review your current paystubs and verify your current income structure so if we just received a raise or will receive a raise, we’ll be happy to use your most current calculation of our salary. We understand our clients may have a recent pay increase or promotion so we will utilize your correct current income in our review.
Well my issue is that I made less last year which would qualify me for the assistant. But For 2017 I will make more then the amount allotted. So wasn’t sure which numbers you go off of for qualifications.
We will do our best to help you become approved for the Grant program, however, IHDA will review your income for what is true and correct going forward. If you will make more than their maximum income limit, then we have other programs where we can structure the price with you just investing your down payment amount.
Also, I’m not sure if you’re looking at income levels for Non-Targeted Areas or Targeted Areas by IHDA. It will not cost you anything for me to review your overall situation so you can know for sure your options.
We are in mc Henry county and with 2016 numbers we easily qualify and with 2017 numbers we are over by 2000-3000 dollars.
If you are that close, I would still recommend we review just to confirm, including asking your employer to provide us with a verification of employment. In certain cases, perhaps overtime or a bonus may be less and may not be considered in your income.
We typically will look for legible copies of the following documents:
W2’s for 2016, 2015 and 2014
2 most recent paystubs
Federal Tax Returns for 2016, 2015 and 2014 (we also look at any possible unreimbursed employee expenses which could further reduce your income)
Lesile, would you like us to take a look?
I would like more information about 1st home illinois. Can I be contacted further to discuss details, but it appears my target relocation for a new job area isn’t a program target area of Marion, IL, not to be confused with the targeted county of Marion which is north of the town an hour as if that makes sense, haha.
Thank you, Shane
Sure, we would love to help out! Can you please use our contact form here -> https://neighborhoodloans.com/contact-us/, when you fill it out, I will have our 1st Home Illinois expert reach out right away!
Can i refinance my home if i have the first time homebuyers grant and i have not lived in my home for the full five years
You can refinance your home, however IHDA will not allow you to subordinate the existing grant which is held as a 2nd lien on your home. When you refinance, you will have to pay off a pro-rated amount of this Grant when you refinance. For example if you have owned your home for 4 years, you may have to pay roughly 1 years worth of the $7500 as a pro-rated payoff of the Grant.
After living at property 5 years. Does the grant has to be payback?
No, the Grant of $7,500 only requires you to occupy the property for the first 5 years of homeownership. After 5 years, the Record Lien of $7,500 will drop off of title and you will not have to repay the Grant.
I am thinking of selling but it will of only been 4 years when i do. Will I only have to pay back 1 year of the grant? And would that just be 1500?
That is about correct. IHDA will have the final say-so about the exact amount but you do pay a pro-rated amount back to IHDA if you sell or refinance the house before the full 5 years is up.
You would need to contact IHDA directly for a payoff quote.
Hope that helps!
We’ve only lived in our house for 3 years and have to move upstate. I have been trying to find how much we would owe back of the 7500 we received. What number do I call?
Here is the link to the IHDA’s official website: https://www.ihda.org/. You should be able to find all of the information you need.
Let us know if you need any other help!
What if I sold a home in another state last year? But, I have never owned a home in Illinois…
If someone sold a home in another State within the last 3 years, they would not be eligible for the IHDA program. This program is solely for first time homebuyers (those who have had no ownership interest in a house/property over the past 3 years).
Hope that helps!
Can the funds be used for both the down payment AND the closing costs or is it one or the other?
For those eligible for IHDA financing, the Grant can be used towards both the down payment and closing costs, provided the buyer is still investing 1% of the purchase price upfront into the house transaction (via earnest money).
Let us know if you need any other help!
We are a first time home buyer, (we actually just had one) and didn’t avail of this program because according to the lender., the interest rate is higher than the regular FHA loan. Is this really true? If we elect to apply for the program, will we still qualify even if we already bought it 6 months ago?
Unfortunately no, if you already purchased a house 6 months ago, you are no longer considered first time homebuyers and therefore not eligible for this IHDA Grant. Regarding the interest rates, you will typically pay a slightly higher interest rate for an IHDA loan, depending on your credit score.
Hope that helps!
What is the required credit score to qualify?
IHDA now requires a 640 minimum credit score and the middle of the 3 credit scores provided is used.
Can you use the down payment plus grant with the 1st home illinois grant and is eligibility criteria the same?
No, it is either one or the other. The criteria is the same for both with the exception of available Counties for the 7,500 Grant are limited ( ie. Cook, Kane, Will but not Dupage, Lake)
If you are limited on available cash, please contact me so I can suggest some additional ways to lower you cash outlay for a home purchase.
Hope that helps!
I’ve been reading about stacking or layering different programs for down payment and 1st time home buyer programs. Are you aware of any programs that can be used together to minimize cash needed?
The only program we have available for down payment assistance is through the IHDA Grant program which gives $7,500. There are other ways to reduce funds needed at the closing such as seller credits and offsetting those against/with the seller’s property tax credit. However, IHDA will not permit anyone to receive more than $250 cash back at the time of the closing.
Could you please contact me via email. I would like to give you my home address. So you could send me info on the IHDA program.
Sure, no problem. Would you mind emailing email@example.com, and I will connect you with one of our expert loan officer.
Can this be used towards the purchase of a condo?
Yes, but we require a 5% down payment on any condo with the IHDA program. Please let us know if you have any other questions!
Can you use this loan to build a Shipping Container Home? If I follow HUD requirement for a Manufacturer home.
No, Shipping Container homes are not an acceptable property type within our available programs and based on information presented, will never be secured to a permanent foundation.
I am in the process of purchasing a townhome in Will county. My tentative close date is 11/03/2017. Is it too late for me to see if I am eligible to receive the down payment
We will be happy to help you with your request and yes, closing on November 3rd is definitely possible.
I will need to speak with you so I can start your approval process and in order to provide an accurate approval commitment to you, will need your help by providing legible copies of the following documents:
W2’s for 2014, 2015 and 2016
Most recent 30 days worth of paystubs
Federal Tax Returns for 2014, 2015 and 2016, all pages and schedules please
3 months most recent bank statements
Would you mind sending an email to firstname.lastname@example.org so we can discuss this in detail?
I will send the documents in the morning… Thank you!
Awesome – we just sent you a quick email, thanks!
What is the down payment on a 2 unit building? Building is in Cook. I’M A FIRST TIME BUYER. And does FHA works for this program I have a closing date of November 20,2017.
2% down payment for a 2 flat with the IHDA Grant and yes FHA will work ad FHA does not require additional reserves like Conventional financing. Please let us know if you need any help, you can reach us at email@example.com!
Can you use this towards a townhouse?
The IHDA Grant, yes we can use the $7,500 towards a townhouse. Please feel free to reach out to us here, firstname.lastname@example.org.
What does you credit score have to be
We have programs available down to a 550 middle score if you have at least 10% down payment, 580 middle score is 3.5% down payment.
Please let us know if that helps, and feel free to email email@example.com.
Do you offer any options for people interested in buying a home in Dupage County?
Are you referring to down payment assistance programs? Yes, we are an approved IHDA lender which offers a loan of $5,000 in DuPage County.
We’ll be happy to help explore the right financing options for you when you’re ready, just email firstname.lastname@example.org
What is the current Interest Rate on an IDHA loan?
We offer both Conventional and FHA financing under the IHDA Down Payment Assistance Program.
The rates change constantly, would you mind emailing us here, email@example.com for more accurate breakdown?
my credit isnt the greatest and i am looking to be a first home buyer any suggestions
We do handle a variety of credit situations.
In all honesty, if you’re looking for down payment assistance programs, those require a middle credit score of 640 or better.
However, if you could come up with the minimum down payment amount of 3.5% of whatever your purchase price will be, have a middle credit score of 580 or better and can prove your rent has been paid on time, I can provide some recommendations how we can help you become a homeowner.
Please shoot as an email at firstname.lastname@example.org and we can take a look at your scenario!