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Illinois First-Time Home Buyer Programs of 2018

July 30, 2018
Finding the Right Mortgage, Mortgages
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If you’re a first-time home buyer — or even a repeat buyer in Illinois — the state’s housing development authority offers down payment assistance and loan programs that may help you clear the hurdles of buying a home.

Almost all of the programs offered by the Illinois Housing Development Authority, or IHDA, are valid in any county in Illinois.

National first-time home buyer programs

While you don’t have to live in the Land of Lincoln to access these initiatives, the following national programs help first-timers across the U.S. get into a home of their own.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

Mortgages insured by the Federal Housing Administration, or FHA, offer relaxed qualification requirements, especially when it comes to down payment and credit score. You can qualify for an FHA home loan with a credit score as low as 500, but you’ll need a 10% down payment. If your score is 580 or

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

The USDA home loan program encourages rural and suburban homeownership by offering zero-down-payment mortgages to lower-income buyers. Borrowers with nontraditional credit data, like rent or utility payments, can still apply, but those with a score of 640 or above will experience faster loan

 

IHDA first-time home buyer programs

Here are the programs offered particularly for Illinois residents. You’ll find cash assistance for down payments and closing costs, as well as incentives for buyers in areas targeted for redevelopment.

IHDA highlights and eligibility requirements

Highlights

  • Cash assistance is available to apply to your down payment or closing costs.
  • One program is structured as a loan that doesn’t have to be repaid.
  • 30-year fixed-rate loans are offered.
  • Government-backed loans are available.

Eligibility

  • Minimum credit score of 640 is generally required.
  • Ability to make monthly payments.
  • Must meet county household income limits and purchase price limits.
  • Contribute $1,000 or 1% of the purchase price, whichever is greater.
  • The home must be your primary residence.
  • You must complete homeownership counseling, either in person or online.

» MORE: Tips for first-time home buyers

IHDAccess Forgivable

State program

Review IHDA lenders

at NerdWallet

Best for

Down payment assistance

What you need to know

The name of the program may not be that creative, but it tells you what you need to know. It begins with down payment cash assistance of 4% of the home’s purchase price, up to $6,000. The cash assistance is forgiven monthly without payment over 10 years. Government loans, such as VA, FHA and USDA

 

IHDAccess Deferred

State program

Review IHDA lenders

at NerdWallet

Best for

Down payment assistance

Closing cost assistance

What you need to know

You may receive 5% of the purchase price in cash assistance, up to $7,500, on this interest-free loan. You don’t make monthly payments on this loan, either. Rather than being forgiven, the assistance you receive is paid off when you refinance, sell the house or pay off your mortgage.

 

IHDAccess Repayable

State program

Review IHDA lenders

at NerdWallet

Best for

Down payment assistance

Closing cost assistance

What you need to know

Get 10% of the purchase price in cash assistance, up to $10,000. This is also structured as an interest-free loan — but you pay this one back over a 10-year period.

 

1stHomeIllinois

State program

Review IHDA lenders

at NerdWallet

Best for

Down payment assistance

Closing cost assistance

What you need to know

This IHDA program provides $7,500 to be used for first-time home buyers’ down payment or closing costs. And you don’t have to pay back the cash assistance you received if you live in the home for at least five years. 1stHomeIllinois is combined with a 30-year fixed-rate FHA, VA, USDA or conventional

 

Your next step

The lender you work with may have additional borrower requirements beyond those stated in any state assistance program. That can include credit score minimums or other credit qualifications. Dig into the programs you’re interested in, learn all you can, then talk to a few lenders about the possibilities.

For full details on any Illinois Housing Development Authority program, visit the IHDA website.

You’ll find Illinois lenders that participate in these programs by searching the IHDA lender list.

» MORE: Find the best mortgage lenders

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