1st home illinois mortgage program

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 payments assistance for first-time homebuyers, veterans, and anyone who hasn’t owned a home in within the last three years. This is a welcome addition that is helping to put buying a home within reach of many first-time homebuyers.

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 gives first-time homebuyers time to pay off the 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 it can be used for multiple types of mortgages. 1st Home Illinois can be used on conventional, FHA, USDA, and VA loans.

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.
  • 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.

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 planning and patience.

  • LaKaiya Kippers

    Can the 1st Home Illinois program be used to purchase a condominium or townhouse?

    • thomasnbr

      Yes, the 1stHomeIllinois program can be used for a condo or townhouse as long as it is a one-unit.

  • Stacey Muniz

    How much of a down payment would I need to save before getting the down payment assistance once qualified?

    • thomasnbr

      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!

  • Humberto Peña

    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?

    • thomasnbr

      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!

  • Andy Green

    Are there any plans on changing the income limits? My wife and I are about $1000 over the limit for McHenry county.

    • thomasnbr

      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 gpusch@neighborhoodloans.com and he will be happy to provide more information for you.

  • Garrick Long

    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?

    • Neighborhood Loans

      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?

    • thomasnbr

      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?

  • Renia

    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.

  • kathy

    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?

  • Gabe Mitchell

    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.

  • Kay Anstrom

    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!

  • Sheri Gustin

    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!

  • Brandon Balcer

    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! =)

  • Anne Harvey-Sandoval

    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!

  • Leslie

    Do you go off of 2016 income shown in W-2’s or do you use current income from paycheck stubs to determine qualicication?

    • Hey Lesile,

      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.

      • Leslie

        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.

          • Leslie

            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?

  • Shane Rhoades

    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

  • Sue Smith

    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

    • Hey Sue,

      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.

  • Lorena

    After living at property 5 years. Does the grant has to be payback?

    • Hey Lorena,

      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.

  • Donnie

    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?

    • Hey Donnie,

      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!