State and Federal Loan Programs

The following specialized mortgage loan programs can help prospective buyers get better financing. Your Illinois REALTOR® can provide you with mortgage information, discuss financing options and recommend loan sources to help you get into your new home! Programs for veterans.

SmartMove Trio

The SmartMove mortgage financing program now features expanded benefits under changes announced by Governor Pat Quinn in late February. The Illinois Housing Development Authority (IHDA) program has been expanded to offer a third benefit to qualifying borrowers – an optional mortgage credit certificate to reduce federal income tax liability. SmartMove Trio is one of the most lucrative homebuyer packages offered by IHDA. Since January 2009, SmartMove has assisted around 2,700 Illinois families in buying a home.

What does the program offer?

  • A 30-year, first mortgage with an affordable interest rate.
  • A second mortgage of up to $6,000 for down payment and/or closing costs assistance (for first-time homebuyers only).
  • And a new addition: An optional mortgage credit certificate to reduce federal income tax liability.

Who is Eligible?

  • A first-time Illinois homebuyer (defined as someone who hasn’t owned a primary residence in the last three years).
  • Military veterans (do not have to be a first-time buyer).
  • Homebuyers purchasing a home in targeted areas of the state (also exempt from the first-time buyer requirement).
  • Borrowers must also meet household income and purchase price guidelines.

How does the mortgage credit certificate work?

The mortgage credit certificate allows homeowners to use 20 percent of their annual mortgage interest as a direct federal tax credit, which results in a dollar-for-dollar reduction of the annual federal income tax liability. The remaining 80 percent of their annual mortgage interest continues to qualify as an itemized tax deduction. Over the life of a SmartMove Trio loan, homeowners would see a federal income tax credit worth up to $18,000.

Learn more: www.ihda.org/homeowner/gettingLoan.htm

Call 312-836-5200 to speak with IHDA's Homeownership Originations department.

VIDEO: Scott Bush, Homeownership Programs explains IHDA's SmartMove Program

Source: Illinois Housing Development Authority

 

USDA Rural Development Single Family Housing Guaranteed Loan Program

This federal program through the U.S. Department of Agriculture (USDA) assists low to moderate income consumers buying homes in eligible rural areas, including many counties in Illinois.

What does the program offer?

A 30-year fixed-rate loan with 100 percent financing, no monthly mortgage insurance and doesn’t require a down  payment. A one-time guarantee fee applies, but can be rolled into the loan amount. Eligible closing costs and lender fees may also be rolled into the loan or paid by the borrower.

Who is Eligible?

Borrowers who are buying a property in an eligible rural area and have a household income that does not exceed the income guidelines established for a particular county. There are flexible credit guidelines so those with non-traditional credit histories can apply and the program is not limited to first-time buyers. Buyers may have an income of up to 115 percent the median income for the area.

Which properties are covered?

Eligible properties include existing homes, new construction, modular homes, eligible condominiums, new manufactured homes and Planned Unit Developments (PUDs). There is no maximum purchase price; qualifying ratios are determined between a borrowers income and housing affordability.

Learn more: www.rurdev.usda.gov/HAD-Guaranteed_Housing_Loans

Source: U.S. Department of Agriculture

 

Finally Home

A mortgage guarantee program offered through the Illinois State Treasurer’s Office offers borrowers a 10 percent mortgage guarantee to help them qualify for an affordable and sustainable loan.

What does the program offer?

For eligible borrowers, the program guarantees up to 10 percent of their qualifying loans. The goal is to help Illinois residents avoid predatory lenders and obtain affordable mortgages to purchase or refinance a home.

Who is Eligible?

Low- to moderate-income Illinois residents who otherwise might not be able to obtain a conventional mortgage. Borrowers must be documented Illinois income taxpayers. The homes being purchased or refinanced must be in Illinois.

Learn more: http://treasurer.il.gov/programs/finally-home/finally-home.aspx

Source: Illinois State Treasurer’s Office

 

Illinois Building Blocks Pilot Program

A targeted financing program offering up to $10,000 in down payment assistance to buyers who purchase vacant properties in five Illinois communities hit hard by foreclosures: Berwyn, Maywood, Park Forest, Chicago Heights and South Holland. The program is administered through the Illinois Housing Development Authority.

  • UPDATE (3/21/13): The Illinois Building Blocks Program has been expanded to include: Belleville, Blue Island, Champaign, Cicero, Crest Hill, Joliet, Lockport, Lynwood, Melrose Park and Peoria. The community revitalization program helps qualifying buyers purchase vacant homes by offering $10,000 in down payment and closing cost assistance. Learn more.

What does the program offer?

A 30-year fixed rate mortgage at an affordable interest rate and a $10,000 forgivable loan over two years for down payment and closing costs assistance.

Who is eligible?

Properties must be purchased in one of the five targeted communities. Borrowers do not have to be first-time buyers, but income and purchase price limits do apply.

Learn more: www.ihda.org/homeowner/ILBuildingBlocksProgram.htm

Source: Illinois Housing Development Authority

 

FHA Loans

Since 1934, mortgages insured through the Federal Housing Administration (FHA) have helped millions of people buy a home. Because FHA loans are insured by the federal government, they offer competitive interest rates, down payments as low as 3.5%, and are an option for buyers with less than perfect credit. FHA loans can be used to buy a home, finance repairs to an existing home or for seniors aged 62 or older, be used for a reverse mortgage.

Learn more: http://www.hud.gov/buying/loans.cfm  | Find the FHA loan limits for your area.

 

Local City or County Programs

Check with your local city or county government. For example, the HOME Program adminstered both by HUD helps homebuyers in participating Illinois cities and counties with down payment and closing cost assistance.

 

Programs for Veterans

 

 

Welcome Home Heroes

This Illinois Housing Development Authority program helps Illinois veterans and military personnel finance a home through affordable mortgages and down payment and closing cost assistance.

What does the program offer?

  • A $10,000 forgivable loan over two years for down payment and closing cost assistance.
  • A 30-year fixed rate mortgage with an affordable interest rate.
  • Optional mortgage credit certificate.

Who is Eligible?

  • Veterans (who need not be first-time buyers).
  • Active military personnel, reservists and Illinois National Guard members (first-time buyers only).
  • Buyers must meet income and purchase price guidelines.

Which properties apply?

One-to-two-unit properties that will be used as a primary residence.

Learn more: www.ihda.org/homeowner/heroes.htm

Download the face sheet (pdf)

VIDEO: Scott Bush, Homeownership Programs explains IHDA's Welcome Home Heroes Program

Source: Illinois Housing Development Authority

 

Dream Makers National Down Payment Assistance Program

Dream Makers is a national down payment assistance program for first-time home buyers of modest means who help defend our nation. Grants are eligible for active duty and veteran military personnel as well as current employees of the Department of Defense and Department of Homeland Security. Grants can be used in conjunction with VA, FHA, and conventional mortgages from any lender in the nation. Applications can be submitted online at www.penfedfoundation.org/DreamMakers. Download an informational flyer (pdf).

 

Veterans Administration (VA) Home Loan Program

VA can guarantee a portion of a loan made by a private lender to help you buy a home, a manufactured home, a lot for a manufactured home, a condominium unit, or a unit in a cooperative dwelling. VA also guarantees loans for building, repairing, and improving homes. If you have a VA mortgage, the VA can help you refinance your loan at a lower interest rate. You may also refinance a non-VA loan. Certain disabled veterans and military personnel can receive grants to adapt or acquire housing suitable for their needs. www.homeloans.va.gov

 

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