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 – and
may be able to help you find financing that suits
your needs and helps get you into your new home!
- Illinois Home Start Loan Program
offers affordable interest rates and down
payment assistance for first-time homebuyers and
veterans.This Illinois Housing Development
Authority (IHDA) program offers two loans: the
Home Start 30-Year Fixed Rate Loan and an
optional Home Start Down Payment Assistance
Loan. It is available through IHDA lending
partners across the state.
Learn more about the loan programs.
- NEW! IHDA Tax Credit Advance Loan.
Use the federal first-time homebuyer tax credit
for your down payment with the
IHDA Tax Credit Advance Loan, which provides
3 percent of the purchase price (up to $6,000).
This program is only available when used in
conjunction with the Home Start first mortgage
and expires April 30, 2010.
- 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 and are an
option for buyers with less than perfect credit.
They have a low 3.5 percent down payment and,
unlike conventional loans, that money can come
from a family member, employer or charitable
organization. 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.
www.hud.gov/fha/choosefha.cfm
FHA loan
limit increases to help homebuyers in Illinois.
HUD published new 2009 FHA loan limits per the American Recovery and Reinvestment Act.
Find the
new 2009 loan limits for your area.
-
USDA Illinois
Guaranteed Rural Housing Loan.
This program offers 100 percent financing with
no monthly mortgage insurance, competitive fixed
interest rates and expanded qualifying ratios of
29 percent and 41 percent. There is a one-time
guarantee fee that may be rolled into the loan
at close regardless of the appraised value.
Existing dwellings or new construction
properties qualify when located in eligible
rural areas. This program is NOT just for
first-time buyers. Applicants may apply with
local approved Rural Development lenders.
www.rurdev.usda.gov/IL/
-
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
-
Finally Home.
Formerly known as Our Own Home, this program was
established by the Illinois State Treasurer’s
Office in 2002 to help Illinois residents buy a
home or keep their existing homes from going
into foreclosure. It’s a free program that helps
borrowers who cannot obtain conventional
mortgages from credible lenders due to credit
issues or a high debt-to-income ratio. The
program can also help borrowers refinance a
mortgage if they are facing an ARM reset or
certain financial hardships defined by statute
and show that that they will likely be able to
continue or resume making payments.
www.treasurer.il.gov/programs/finally-home/finally-home.aspx
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Mortgage
Credit Certificate.
This program of the Illinois Housing Development
Authority applies to first-time homebuyers or
borrowers who have not owned a home in three
years. The Mortgage Credit Certificate (MCC)
allows up to 20 percent of the mortgage interest
(up to $2,000) to be claimed as an IRS tax
credit. This can be an immediate benefit by
filing a revised W-4 withholding (more take-home
pay) or as a tax refund at the end of the year.
This certificate must be applied for at the time
of loan application and can be used with any
FHA, VA, RD or conventional loan, allowing the
borrower to qualify for a more expensive home,
and good for the life of the loan.
www.ihda.org
-
Rural Housing
Initiative. This program of the Partnership
for HomeOwnership foundation targets
individuals/families with income at or below 65
percent of county median income as determined by
the Illinois Housing Development Authority (IHDA).
Applicants must be first-time homebuyers or not
have owned a home within three years in rural
Illinois counties. Cities of population less
than 20,000 (or 10,000 outside a
metro-statistical area are) are eligible.
www.pfho.org
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