Down Payment Assistance

Posted by Laine Smith on 4/18/14 9:34 AM

Topics: Home Buying

A major hurdle for some first-time home buyers is coming up with funds for a down payment or closing costs. Homebuyers can still get mortgages with little to no money down through multiple programs funded by state authorities, such as the Illinois Housing Development Authority (IHDA) and Iowa Finance Authority (IFA).

Down_Payment_House

Image courtesy of hywards at FreeDigitalPhotos.net

The role of IHDA and IFA is to create and preserve affordable housing for low to moderate-income buyers. If down payment is an obstacle for you as a first-time home buyer, ask us about one of the following programs:

Illinois Welcome Home Heroes

Welcome Home Heroes provides critical financial support to men and women who have honorably served in our armed forces. Applicants must be veterans (first-time or repeat homebuyers) or active military personnel, reservists and Illinois National Guard members (must be first-time homebuyers).

  • $10,000 cash assistance to cover down payment and closing costs
  • 30-year fixed rate mortgage
  • Variety of loans to choose from, including FHA, Conventional, VA and USDA
  • Federal tax credit reduces federal income tax liability by up to $18,000 over the life of the loan*

*based on a 30-year, $128,000 loan with a 4 percent interest rate

Illinois Building Blocks

This IHDA program helps strengthen Illinois communities with programs that turn vacant homes into homeownership opportunities. Illinois Building Blocks is eligible in the following communities: Belleville, Berwyn, Blue Island, Champaign, Chicago Heights, Cicero, Crest Hill, Joliet, Lockport, Lynwood, Maywood, Melrose Park, Park Forest, Peoria, and South Holland.

  • $10,000 cash assistance to cover down payment and closing costs
  • 30-year fixed rate mortgage
  • Buyers are required to contribute one percent or $1,000 of the purchase price, whichever is greater
  • Variety of loans to choose from, including FHA, Conventional, VA and USDA

Welcome Home Illinois

The mortgage approval process faces more scrutiny today than the past. With lenders and loan programs requiring higher credit scores and down payments, it is especially difficult for first-time buyers to come up with funds for a home purchase. Welcome Home Illinois provides qualified first-time buyers with down payment assistance.

  • $7,500 cash assistance to cover down payment
  • 30-year fixed rate mortgage
  • Buyers are required to contribute one percent or $1,000 of the purchase price, whichever is greater
  • Variety of loans to choose from, including FHA, Conventional, VA and USDA

SmartMove

SmartMove, IHDA’s flagship mortgage program, is beneficial for first-time buyers with limited funds for down payment, yet have the financial ability to maintain monthly mortgage payments.

  • Up to $6,000 cash assistance for down payment
  • 30-year fixed rate mortgage
  • Variety of loans to choose from, including FHA, Conventional, VA and USDA

Homes for Iowans & Homes for Iowans Plus

IFA’s Homes for Iowans program assists both repeat and first-time Iowa home buyers by providing an affordable, fixed interest rate mortgage with the convenience of working with a local lender. Homes for Iowans Plus can be used in conjunction with Homes for Iowans and features:

  • Up to $2,500 in cash assistance to cover entry costs, such as down payment and closing costs
  • An interest rate that does not change based on a qualified borrower’s credit rating
  • Free Title Guaranty Owner’s Certificate, which protects the borrower’s interest in the property’s title even after the home is sold

Compass Mortgage is an IFA and IHDA participating lender. If down payment is a barrier in your home buying process. Ask one of our mortgage bankers for more details on the programs above.

***Programs are subject to credit score, income limits, housing specifications and eligible areas.

For more information about home buying and financing, in general, download our free Mortgage 101 Handbook, a great resource for first-time homebuyers.

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