Home buyers with a qualifying credit score and debt to income ratio still have one hurdle to clear, the down payment. Down payments can range from smaller percentages, around 3.5 percent, all the way up to 20 percent. There are often strict rules about where a down payment can come from, making this one of the more challenging parts of purchasing a home.
Home down payment assistance programs (DPA programs) can help you over this last barrier to home ownership. There are a variety of down payment assistance loans and grants available to St Charles home buyers. Most have eligibility requirements, including income requirements and conditions on the home or property itself.
There are DPA programs that exist in the St Charles, IL area, as well as those that are state-wide. With help from Compass Mortgage, you can find a down payment assistance loan or grant that works for your situation. Here are some of the options available to you.
The Kane County First-Time Homebuyer Deferred Loan Program is open to anyone in the county, though people in St. Charles have the option to receive more funding. Regardless, anyone in Kane County who meets eligibility requirements can receive down payment assistance through this program.
It provides up to $10,000 in down payment and/or closing cost assistance to first time homebuyers. This is a zero-interest, deferred payment loan. This means that the loan must be repaid when the home is sold, paid off, the title is transferred, or the home is no longer the buyer’s principal residence.
To be eligible for this type of St Charles home loan down payment assistance, home buyers must live or work full time in the Kane-Elgin Consortium Area for at least one year before applying for the program. If you are applying you must stay under federal income limits and complete homebuyer counseling. You also need to contribute at least one percent as a down payment.
The home purchased under the Kane County First-Time Homebuyer Loan Program is required to meet certain property standards as well. This is a general inspection, in addition to a lead paint inspection.
There is another provision in the Kane County First-Time Homebuyer Loan Program allowing more options for buyers who choose a foreclosed home. They can qualify for up to $20,000 in assistance, potentially. This opens more opportunities, though there are of course pros and cons to buying a foreclosed home.
Illinois Housing Development Authority (IHDA) loans are available to people buying homes in certain counties, Kane County included. These programs are mortgage programs that come with down payment assistance. There is a forgivable option, a deferred option, and a repayable option.
Each of the IHDA programs offers a certain percentage of the purchase price as down payment assistance. The repayable loan offers the most, at 10 percent, while the forgivable comes in at four percent.
All of the IHDA programs have eligibility requirements setting out rules for household income, purchase price limits, and credit score.
Downpayment Plus is run through Federal Home Loan Bank of Chicago member lenders specifically. This program offers down payment and closing cost assistance. The assistance is a forgivable grant paid on behalf of the borrower, which is then forgiven monthly over a five-year retention period.
The maximum grant amount is the lesser of $6,000, or 25% of the first mortgage amount. Downpayment Plus Advantage is another program that is for homebuyers who are part of nonprofit homeownership programs. For example, an organization like Habitat for Humanity could be a part of this program. Grants under Downpayment Plus Advantage are forgiven monthly over a five-year retention period as well.
The maximum Downpayment Plus Advantage amount is $6,000. For both programs, beneficiaries are required to complete homebuyer education and counseling, as approved by the Department of Housing and Urban Development.
One unique aspect of the Downpayment Plus and Plus Advantage programs, compared to many other St Charles, IL DPA loans, is that it is not limited to first-time homebuyers. There is an income eligibility requirement, but buyers who have already owned a home in the past are welcome to apply if they meet the income qualifications.
These are just a few of the down payment assistance options available to people in Illinois. If you still have questions, the team at Compass Mortgage are here to help. We know that trying to put a down payment together can be complex, even if using down payment assistance programs.