Illinois Grant (IHDA Loan) vs. Down Payment Assistance Program

Illinois Grant (IHDA Loan) vs. Down Payment Assistance Program

Are you looking for an IHDA loan or a down payment assistance grant? Some down payment assistance programs require no repayment, but repayment varies with the Illinois grant. The Illinois grant (IHDA loan) and other down payment assistance programs both help with the down payment on a home, but have their differences.

IHDA Loan and Other Grants

These products were designed to expand the American dream of home ownership and help families or individuals that have been unable to save a sufficient amount for a down payment. It is important to explore options when purchasing – every low down payment option has their pros and cons. You can talk to Loan Originator and go over the pros and cons of each program.

IHDA Loan – Illinois First Time Home Buyer Grant

Repayment – is the IHDA loan a gift or does it need to be paid back?

• Repayment for the Illinois Grant (IDHA loan) depends on the program.

There are down payment assistance programs that do not require repayment.

1^stHomeIllinois

The $7,500 grant, 1^st HomeIllinois, is a forgivable that does not need to be paid back if the borrower lives in the home for 5 years. If the house is sold in the 1^st 5 years, a portion of the down payment is required to be paid back to IHDA.

Access Forgivable

The $6,000 grant, Access Forgivable, does not have to be paid back if the borrower lives in the home for 10 years. If they sell the home in the first 10 years, a portion of the down payment has to be paid back to IHDA.

Access Deferred

The $7,500 grant, Access Deferred, will have to be paid back at maturity of the 1^st mortgage, unless paid sooner, if refinanced, or sold.

Access Repayable

The $10,000 grant, Access Repayable, the borrower has to repay the grant over 10 years.

Credit Score Requirements

The minimum credit score has to be 640 regardless of the loan type for a IHDA loan. Other grants require lower credit scores like 580 FICO for the 2% grant and 620 for the other grant programs.

Other Down Payment Assistance Programs

Repayment – the down payment assistance program does not require repayment. Credit score – the minimum credit score is 620 for the 2%-5% grant. Also have an Illinois first time home buyer grant option for a 2% down with a minimum of a 580 FICO with no repayment required.

Similarities

Illinois first time home buyer grant and down payment assistance programs:

• 30 year fixed mortgage.
• Both offer down payment assistance.
• Allow first-time home buyer and repeat homebuyer.
• Both will allow gifts.
• IHDA and down payment assistance program have income limits.

FHA Within Reach Government – 3% or 4% Grant

• The FHA within reach 3% or 4% grant requires a minimum credit score of 620.
• Automated Underwriting System (AUS) approved finding or manual underwriting allowed.
• Maximum debt-to-income is 50%.
• Family gift allowed.
• Seller contributions of up to 6% allowed.
• 1-4 units allowed.
• Manufactured housing available.

VA Within Reach Government – 3% or 4% Grant

• Minimum credit score of 620.
• Desktop Underwriter and Loan Prospector automated underwriting findings approve/eligible and accept, but manual underwriting allowed too.
• 1-4 units allowed
• Manufactured housing eligible.
• Debt-to income allowed up to 50%.
• Living rent free is allowed.
• Gifts are allowed.
• Up to 6% seller contribution is allowed.

USDA Within Reach Grant – 3% Grant

• Guaranteed Underwriting System (GUS) approved findings are allowed and so is manual underwriting.
• Minimum credit score of 620.
• Max debt to income is 29% / 41%.
• Cannot be living rent free.
• Gifts are allowed.
• Up to 6% seller concession is allowed.

Conventional Within Reach – 4% and 5% Down Payment Assistance Program

• Minimum Credit Score of 620.
• Maximum debt to income is 50%.
• Gifts are allowed.
• Living rent free allowed.
• Maximum loan-to-value is 97%.
• Up to 3% seller concession allowed.

Power Purchase 2% Grant – 1% Down Payment

• Requires only 1% of the down payment from the home buyer.
• Must have an Automated Underwriting System (AUS) approval, which is run during the pre-approval process.
• Debt-to-income is based on the automated approval system.
• Living rent free is allowed.
• Loan-to-value up to 97%.
• Have lender paid mortgage insurance (LPMI) options.
• Up to 3% seller concession allowed.

Grants in Other States

These grants are available in other states and some grants are not specific to Illinois.

How to Get Pre-approved for a Grant

The pre-approval process starts by talking to a licensed Loan Originator in order to get together a list of documents required for underwriting and processing. Once all necessary documents have been sent, they will run the Automated Underwriting System (AUS) to determine your eligibility for a pre-approval letter.