Illinois Launches $15M Homeownership Assistance Program
Illinois launched a new homebuyer program designed to increase accessibility for low- and moderate-income individuals, families and seniors interested in purchasing a home in the state.
Administered by the Illinois Housing Development Authority, Illinois HFA1 will provide $10,000 for down payment and/or closing cost assistance to make buying a home more affordable. By offering a competitive interest rate and limiting the total fees charged to the borrower, IHDA programs are designed to be as affordable as possible, which enables substantial savings over the life of the loan.
Illinois HFA1 was developed through a multi-year coordinated effort between the Mortgage Bankers Association, National Council of State Housing Agencies other industry stakeholders and Housing Finance Agencies from Alabama, Arizona, California, Colorado, Idaho, Illinois, Iowa, Massachusetts, New Mexico, South Dakota, Tennessee, Utah and Washington. The goal: to make it easier for lenders to partner with IHDA and other Housing Finance Agencies in providing affordable mortgages and down payment assistance to lower-income homebuyers. To this end, the HFA1 program includes operational improvements that allow mortgage lenders to partner more efficiently with HFA programs, including reduced and/or eliminated loan overlays, common documents to reduce operational differences and aligned affordable mortgage and down payment assistance requirements.
Housing bonds issued by IHDA fund Illinois HFA1. Interested homeowners can find additional information and a list of participating lenders at www.ihdamortgage.org.
In announcing the program, Illinois Gov. JB Pritzker said Illinois HFA1 will support a new generation of homebuyers and set them up for long-term financial success. The state expects Illinois HFA1 to assist more than 1,500 new homebuyers.
“Illinois is stepping up and standing in the gap to create a pathway for people to achieve the dream of owning a home,” said Illinois Lt. Gov. Juliana Stratton. “When we say housing is a right for all, that also includes committing to providing the assistance and support that eases the burden of being able to afford home ownership. Illinois HFA1 is the groundwork to do just that.”
Under Illinois HFA1, IHDA will provide a 30-year first mortgage with a fixed interest rate and $10,000 in down payment and/or closing cost assistance. The down payment assistance is provided as an interest-free second mortgage with payments deferred for 30 years, meaning funds do not need to be repaid until the borrower sells the home, refinances or pays off their mortgage. Illinois HFA1 is not exclusive to first-time buyers, may be used by buyers in any county in the state and in some circumstances can be used in conjunction with other down payment assistance programs to increase homebuyer leverage.
“A large hurdle to buying a home is saving enough money for a down payment, which has become more difficult with home values increasing, rising interest rates and other obligations such as taking care of a family,” IHDA Executive Director Kristin Faust said. She suggested potential buyers reach out to a participating lender to discuss options. “You may be surprised how much you can save today and finally have the opportunity to put down roots in a community and build household wealth,” she said.
