We all know how overwhelming buying a home can be. As a REALTOR®, you are counted on to answer your clients’ questions, ease their worries and be a home expert.
During these trying times caused by the COVID-19 pandemic and civil unrest, many people are looking for ways to save or receive assistance to purchase the homes of their dreams. But many do not know about the grants and programs that are available to them, from assistance with down payments, closing costs, tax credits and more. Make sure you are an expert on the options available for your clients. We have put together a guide to many of the homeownership programs, grants and resources available in Chicago and the state of Illinois that can be utilized to save your clients money, and stress, during the homebuying process and these uncertain times.
Nationwide, there are over 2,000 homeownership assistance programs available. Many of these programs will fall into one of the following categories:
- Grants: Grants are gifts that do not have to be repaid and can be used towards either down payments
or closing costs. Grants are usually regulated by state and local governments. - Loans: Loan programs can provide benefits such as varied approval requirements, deferred payments and forgiveness over time.
- Tax Credits: Homeownership tax credits allow for reduced income tax rates, a deduction in home related expenses or credits through tax credit-specific programs.
- Programs/Initiatives: Many governments will provide programs or initiatives. These could provide incentives to invest or purchase properties, help invest in certain communities, rehab abandoned properties and more.
Grants
1st Home Illinois
Client Criteria: If your client is a first-time homeowner, veteran or hasn’t owned a home in the last three years and is looking in Cook, Marion, St. Clair or Winnebago counties, they would meet the criteria for this program. Your client must contribute $1,000 or 1% of the home’s purchase price, and it must be an existing home. New construction is not applicable. A credit score of at least 640 is required and household and purchase limits apply.
What the Grant Offers: This grant provides a 30-year, fixed-rate mortgage of choice combined with $7,500 assistance towards a down payment and closing costs.
Find Out More At: www.ihda.org/my-home/getting-an-ihda-loan/
Federal Home Loan Bank of Chicago Downpayment Plus and Plus Advantage Programs
Client Criteria: The Downpayment Plus (DPP) and Downpayment Plus Advantage programs offer Federal Home Loan Bank of Chicago members down payment and closing cost assistance for eligible homebuyers. For Downpayment Plus, the funds are provided in a forgivable grant paid on behalf of the borrower at the time the borrower closes on the mortgage and are forgiven on a monthly basis over a five-year retention period. Downpayment Plus Advantage is available to those in homeownership programs offered by nonprofit organizations that provide mortgage financing directly to the homebuyer.
What the Grants Offers: Both grants provide up to $6,000. For DPP, the maximum grant must be either less than $6,000, less than three times the homebuyer’s net contribution or less than 25% of the first mortgage amount.
Find Out More At: www.fhlbc.com/communityinvestment/downpayment-plus-programs
IHDAccess Forgivable
Client Criteria: IHDAccess Forgivable is available in any county in Illinois for buyers who are looking for down payment assistance and does not need to be repaid. Your client must contribute $1,000 or 1% of the home’s purchase price, and new construction and existing homes are both accepted. A credit score of at least 640 is required and household and purchase limits apply.
What the Grant Offers: This grant offers 4% (up to $6,000) of the purchase price in assistance for a down payment and closing costs, which is forgiven over 10 years, so it does not need to be repaid with a 30-year, fixed rate mortgage.
Find Out More At: www.ihda.org/my-home/getting-an-ihda-loan/
IHDAccess Deferred
Client Criteria: IHDAccess Deferred provides down payment or closing cost assistance that must be repaid at the end of the loan. This is available for all homebuyers. Your client must contribute $1,000 or 1% of the home’s purchase price, and new construction and existing homes are both accepted. A credit score of at least 640 is required and household and purchase limits apply.
What the Grant Offers: This grant offers 5% (up to $7,500) of the
purchase price in assistance for a down payment or closing costs that is interest-free for the life of the mortgage. The loan must be repaid when the home is sold, refinanced or the mortgaged is paid off.
Find Out More At: www.ihda.org/my-home/getting-an-ihda-loan/
IHDAccess Repayable
Client Criteria: IHDAccess Repayable provides down payment or closing cost assistance that must be repaid over 10 years. This is available for all homebuyers. Your client must contribute $1,000 or 1% of the home’s purchase price, and new construction and existing homes are both accepted. A credit score of at least 640 is required and household and purchase limits apply.
What the Grant Offers: This grant offers 10% (up to $10,000) of the purchase price in assistance for a down payment or closing costs that is interest-free and repaid monthly over 10 years with a 30- year, fixed rate mortgage.
Find Out More At: www.ihda.org/my-home/getting-an-ihda-loan/
Check with Lending Companies!
Also, keep in mind that most mortgage lending companies have specific homeowner grants and loans that your clients can apply for, so make sure to check and see what is available for them.
MORTGAGE CREDIT CERTIFICATES
City of Chicago TaxSmart Mortgage Credit Certificate
Client Criteria: TaxSmart is a Mortgage Credit Certificate issued by the Department of Housing that provides federal income tax credits to homebuyers. To qualify, an applicant must be either a first-time homebuyer or purchasing a home in an economically troubled census tract, also known as a designated target area. They must not exceed the limit for gross annual income, which is $84,600 for a one to two-person household or $97,920 for a three or more-person household. The purchase price must not exceed the limits, which can be found online.
What the Mortgage Credit Certificate Offers: The Mortgage Credit Certificate allows homebuyers to claim a tax credit for a portion of the mortgage interest paid per year. Currently, annual savings are 25% for a purchased home or 50% for a home improvement or rehab loan, and savings are capped at $2,000.
Find Out More At: www.chicago.gov/city/en/depts/doh/provdrs/lenders/svcs/taxsmart.html
Programs
Building Neighborhoods and Affordable Homes Program
About the Program: The Building Neighborhoods and Affordable Homes Program encourages homebuyers to purchase properties in Englewood Square, North Lawndale, South Lawndale, Humboldt Park/Garfield Park and Woodlawn. Homebuyers can receive up to $60,000 in assistance to purchase homes built through the City Lots for Working Families programs.
The income of the whole home cannot be more than 140% of the area median income, and the homebuyer must live in the home for a minimum of 10 years.
Find Out More At: www.chicago.gov/city/en/depts/doh/provdrs/homebuyers/svcs/buildingneighborhoods-andaffordable-homes-program.html
City Lots for Working Families
About the Program: This program provides vacant, city-owned lots to developers of affordable single-family homes and two flats for $1 each. Homes must be made available to qualified buyers with incomes of up to 140% of the area media income who must agree to occupy the homes for five years.
Find Out More At: www.chicago.gov/city/en/depts/doh/provdrs/homebuyers/svcs/citylots-for-working-families.html
Cook County Land Bank Authority
About the Program: The Cook County Lank Bank Authority was created to address the large amount of vacant residential, industrial and commercial properties in Cook County. The Land Bank acquires properties, liens, notes and deeds through purchase, donation, forfeiture and other transfers, which is then transferred to individuals or groups to rehab and prepare for use in a timely manner.
Homes, developments and commercial properties are then listed online for purchase.
Find Out More At: www.cookcountylandbank.org/
Community Connections Home Buyer Assistance Program
About the Program: Is your client a Chicago police officer, firefighter or paramedic? The Community Connections Home Buyer Assistance Program offers loans of up to $30,000 for city workers to purchase a home in a targeted Chicago neighborhood to encourage revitalization efforts.
Homebuyers’ must not make more than 150% of the area median income and must live in the home for 10 years after the purchase.
Find Out More At: www.chicago.gov/city/en/depts/doh/provdrs/homebuyers/svcs/communityconnections-homebuyer-assistance-program.html
INVEST South/West
About the Program: INVEST South/West is an initiative that aligns millions of dollars in public funding over the next three years to maximize public investments to attract capital to areas of need, including Auburn Gresham, Austin, Bronzeville, Greater Englewood, New City, North Lawndale, Humboldt Park, Greater Roseland, South Chicago and South Shore.
Through their website, development teams can submit their proposals for opportunity sites in these areas.
Find Out More At: www.chicago.gov/city/en/sites/invest_sw/home.html
Neighborhood Lending Program Home Purchase and Purchase/Rehab
About the Program: This program provides first and second mortgage loans for the purchase (or purchase and rehab) of one-to-four-unit buildings for homeowners who might not otherwise be able to purchase a home.
Qualifying applicants who want to purchase or purchase and rehab a home can receive deferred forgivable loans on down payment assistance, closing cost assistance, affordability assistance or lead-based paint abatement.
Find Our More At: www.chicago.gov/city/en/depts/doh/provdrs/homebuyers/svcs/neighborhood-lending-program.html
Northwest Home Equity Assurance Program
About the Program: The Northwest Home Equity Assurance Program is a neighborhood funded, tax-based initiative to guarantee the value of a property if it falls below the current fair market value. They also provide low-interest loans for home improvement projects in the area. This program is applicable to certain areas in the neighborhoods of Jefferson Park, Old Irving Park, Dunning, Montclare, Galewood, Portage Park, Belmont Central, Belmont Heights and Belmont Cragin.
Find Out More At: www.nwheap.com
Southwest Home Equity Assurance Program
About the Program: The Southwest Home Equity Program was developed to insure property values for an extended span of time. It is financed through a levy on single through six-unit residential properties within the Home Equity District. The initiative guarantees the value of a property as well as assisting with interest-free home improvement loans. This program is applicable to those living in the Southwest neighborhoods of Chicago Lawn/Marquette Manor, Gage Park, West Lawn, Clearing, Brighton Park, Archer Heights, Garfield Ridge, West Elsdon and parts of Ashburn, McKinley Park, New City and Scottsdale.
Find Out More At: www.swhomeequity.com