A Guide to First-Time Home Buyer Programs

Do you see homeownership in your future? It may be more affordable than you think. With first-time home buyer programs from the Illinois Housing Development Authority (IHDA) and other home loan options, you can get help with a down payment and/or closing costs. In this article, we’ll break down the best first-time home buyer programs in Illinois and offer 5 key tips for first-time buyers.

IHDAccess Forgivable

This IHDA mortgage program provides down payment and/or closing cost assistance you won’t need to pay back if you meet the terms. Here’s what you need to know:

• Receive 4% of your home purchase price, up to $6,000, as a forgivable second mortgage
• Funds may be used for a down payment and/or closing costs
• Must be used for an owner-occupied primary residence in Illinois
• Your first mortgage will be an IHDA 30-year fixed rate home loan
• No payments are due on the second mortgage, which has a 0% interest rate
• Second mortgage forgiveness occurs on a pro rata monthly basis over a 10-year period
• If terms are not met, full repayment of the 2nd mortgage will be required
• Minimum borrower investment is 1% of purchase price or $1,000 (whichever is greater) and must come from personal funds
• Minimum 640 credit score

Learn more about IHDAccess Forgivable from this fact sheet or contact one of our mortgage lenders with questions.

IHDAccess Deferred

This program also provides down payment assistance, but in exchange for a higher amount, the second mortgage must be repaid eventually. Here’s what you need to know:

• Receive 5% of your home purchase price, up to $7,500, as a deferred second mortgage
• Funds may be used for a down payment and/or closing costs
• Must be used for an owner-occupied primary residence in Illinois
• Your first mortgage will be an IHDA 30-year fixed rate home loan
• The second mortgage has a 0% interest rate and a 30-year term
• No payments are due until the maturity date or repayment of the first mortgage, whichever comes first
• The full principal balance is due at once, though you can make optional payments or pre-pay at any time without penalty.
• Minimum borrower investment is 1% of purchase price or $1,000 (whichever is greater) and must come from personal funds
• Minimum 640 credit score

Learn more about IHDAccess Deferred from this fact sheet or contact one of our mortgage lenders with questions.

IHDAccess Repayable

The third IHDAccess mortgage programs offers the highest amount of down payment assistance in exchange for monthly payments over a 10-year period. Here’s what you need to know:

• Receive 10% of your home purchase price, up to $10,000, as a second mortgage
• Funds may be used for a down payment and/or closing costs
• Must be used for an owner-occupied primary residence in Illinois
• Your first mortgage will be an IHDA 30-year fixed rate home loan
• The second mortgage has a 0% interest rate and a 10-year term
• Figure out your 2nd mortgage monthly payment by dividing the total amount by 120
• The full principal balance is due at once, though you can make optional payments or pre-pay at any time without penalty.
• Minimum borrower investment is 1% of purchase price or $1,000 (whichever is greater) and must come from personal funds
• Minimum 640 credit score

Learn more about IHDAccess Repayable from this fact sheet or contact one of our mortgage lenders with questions.

1stHomeIllinois

Exclusively for first-time buyers, this program offers a flat $7,500 in down payment assistance through a forgivable second mortgage. Here’s what you need to know:

• Receive $7,500, regardless of purchase price, as a forgivable second mortgage
• Funds may be used for a down payment and/or closing costs
• Must be used for an owner-occupied primary residence in Illinois
• Your first mortgage will be an IHDA 30-year fixed rate home loan
• No payments are due on the second mortgage, which has a 0% interest rate
• Second mortgage forgiveness occurs on a pro rata monthly basis over a 5-year period
• If terms are not met, full repayment of the 2nd mortgage will be required
• Minimum borrower investment is 1% of purchase price or $1,000 (whichever is greater) and must come from personal funds
• Minimum 640 credit score

Learn more about IHDAccess Repayable from this fact sheet or contact one of our mortgage lenders with questions.

Additional Mortgage Programs For First-Time Buyers

If the preceding loan options from the Illinois Housing Development Authority don’t work for you, we offer these additional types of mortgages that may be a perfect fit for first-time buyers.

• FHA Loans: Offers more flexibility and a lower minimum down payment.
• Professionals Program: Are you a teacher, lawyer, or medical professional with enough student loan debt to affect your ability to qualify for a mortgage? This special loan program may be able to help you buy your first house!
• VA Loans: Eligible servicemembers and veterans may be able to get up to 100% financing on a primary residence.
• HomeReady® Program: Designed for credit-worthy low to moderate income borrowers. 

5 Tips For First-Time Home Buyers

It’s never too early to start saving for your first home.

Even if home ownership seems far off in the distance, start putting money away now to let your savings build with compounding interest. Also, going into home ownership with a healthy emergency fund will give you more flexibility to deal with unexpected issues or repairs that arise.

Talk to a mortgage lender before you apply for a home loan.

This initial conversation is a great opportunity to understand your options, ask questions, and figure out if there are any steps you can take to improve your application before submitting it. Come prepared with 10 Questions to Ask a Mortgage Lender.

Stick to your budget.

Talking to a mortgage lender will also help you determine how much you can afford to spend a home. Once you figure that out, stick to your budget to avoid ending up “house poor.”

Take your time with the home search.

While many houses have been staged to get you to fall in love and make an impulsive offer, you’ll do better to shop around and consider everything that goes into home ownership such as: location, commute time, any renovations or repairs needed, your long-term plans, etc.

Do your research to find a reputable home inspector.

It’s best to find one on your own, through recommendations from family and friends as well as reading online reviews and asking for references. A qualified and thorough home inspector can save you from discovering costly problems with your new home later on.

Learn More About Mortgages for First-Time Home Buyers!

At Town and Country Banc Mortgage Services, we have a successful track record of helping first-time home buyers get to closing with FHA, VA, and other types of home loans. To learn more about the state and federal loan programs we offer, contact one of our mortgage lenders to make an appointment, or visit one of our 11 branches in Springfield, Buffalo, Jacksonville, Lincoln, Decatur, Mt. Zion, Edwardsville and Fairview Heights, and Quincy. We also have a dedicated loan production office in Bloomington. Continue reading about the home buying process on our blog.