NEW IHDAccess Mortgage Products

If you are starting to think about purchasing a home but are worried about the affordability of closing costs — we’ve got great news for you!

Back on February 1st, 2018, The Illinois Housing Development Authority (IHDA) established three new programs that help provide mortgage assistance to potential homeowners with limited income.

The main objective of the IHDA loan products is to make homeownership possible for those who need a jump start. Each program is designed to make sure borrowers can comfortably afford the home they buy.

These programs offer fixed-interest loans with affordable rates that won’t break your savings. Qualified homebuyers can even receive down payment and closing cost assistance.

Recently, IHDA announced they have created three new Access Mortgage products. These programs welcome first-time and even repeat homebuyers. Each Access Mortgage program has special down payment options to accommodate borrower’s financial needs.

Eligible borrowers can receive a maximum of $10,000 to help finance the down payment or closing costs on their new or existing home. These programs are offered statewide, which makes homeownership possible anywhere in Illinois.

With affordable fixed-interest rates and countless benefits, all three Access Mortgage programs make purchasing a home stress-free!

Below, we will discuss all the details regarding the Access Mortgage products available.

IHDAccess Forgivable

Forgivable

The Access Forgivable mortgage provides 4% of the purchase price up to $6,000 in assistance for the down payment and closing costs. The funds are considered a gift and are forgiven monthly over 10 years. The program is designed as a 30-year fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHAVA, USDA, or FNMA HFA Preferred. Both newly constructed and existing homes are eligible for financing. To be considered eligible, borrowers must have a minimum credit score of 640.

Borrowers are also required to invest $1000 or 1% of the purchase price (whichever is greater) towards the transaction.

Borrowers must complete homeownership counseling before they close. These programs are offered online or in-person and under certain circumstances, borrowers can be exempt from the course.

IHDAccess Deferred

Deferred

The Access Deferred mortgage provides 5% of the purchase price up to $7,500 in financial assistance for the down payment and closing costs. The financial assistance is offered as an interest-free loan and is deferred through the life of the mortgage. Borrowers will not need to repay the $7500 until they sell, refinance, or pay off the mortgage.

The program is designed as a 30-year, fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHA, VA, USDA, or FNMA HFA Preferred.

Both newly constructed and existing homes are eligible for financing. To be considered eligible, borrowers must have a minimum credit score of 640.

Borrowers are also required to invest $1000 or 1% of the purchase price (whichever is greater) towards the transaction.

Borrowers must complete homeownership counseling before they close. These programs are offered online or in-person. Under certain circumstances, borrowers may be exempt to complete the course.

IHDAccess Repayable

Repayable

The Access Repayable mortgage provides 10% of the purchase price up to $10,000 in financial assistance for the down payment and closing costs. The financial assistance is considered an interest-free loan and is repaid monthly over 10 years.

The program is designed as a 30-year, fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHA, VA, USDA, or FNMA HFA Preferred.

Both newly constructed and existing homes are eligible for financing. To be considered eligible, borrowers must have a minimum credit score of 640.

Borrowers are also required to invest $1000 or 1% of the purchase price (whichever is greater) towards the transaction.

Borrowers must complete homeownership counseling before they close. These programs are offered online or in-person. Under certain circumstances, borrowers may be exempt to complete the course.

Additional requirements

If applicants are interested in one of these programs, your lender will determine your eligibility. They will evaluate the following:

  • Program criteria
  • Income and purchase price restrictions (varies for each borrower depending on income and property location)
  • First-time homebuyer status (however, repeat buyers are STILL eligible)
  • If the purchase home is a qualified dwelling (single-family dwelling homes include condos, townhouses, and 2-unit properties)

Borrowers also must meet IHDA’s debt-to-income (DTI) ratio. The majority of lenders will allow a maximum DTI ratio of 45%.

This means, your monthly debt payments need to be 45% or lower of your gross monthly income. This ratio shows lenders how financially stable you are while factoring in recurring debts.

It will provide lenders a realistic idea of how much money you will have leftover to cover mortgage payments and other home-related costs.

With the option to make a down payment below 20%, borrowers may be required to purchase mortgage insurance (MI). Mortgage insurance helps protect the lender in the case of default and can be removed once your loan-to-value ratio reaches 80%.

Each program offers borrowers the option to pay for MI as a monthly (calculated into your mortgage payments) or a one-time premium that is paid upfront at closing.

Just like a regular FHA or fixed-rate loan, all Access Mortgage products require specific documentation from borrowers. Generally, your lender will require the following information:

  • Three years of W-2’s
  • Three years of tax returns
  • Names and addresses of employers from the last three years
  • Copies of stubs for each applicant
  • Bank statements from the last three months
  • Verification of current employer, position, and income
  • Dividend earnings
  • Social Security and disability payments (if applicable)
  • Bonuses
  • Debts
  • Security accounts or assets

Lastly, single families that apply for any of the Access Mortgage products are NOT required to have cash reserves. Cash reserves are funds that need to be set aside for mortgage payments and some lenders require borrowers to have at least three months of funds in reserves. If you would like more information on any of these products, Neighborhood Loans is always here to answer any questions.

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