WHAT IS THE HOME BUYER ASSISTANCE PROGRAM?
To help make homeownership possible for a broad range of working families, the Chicago Infrastructure Trust, chaired by Treasurer Kurt Summers, has partnered with the City of Chicago to establish the Home Buyer Assistance Program. The Program will offer grants to eligible home buyers and borrowers to support down payment and closing costs.
The Home Buyer Assistance Program is part of the City’s initiative to expand housing opportunities throughout Chicago neighborhoods. In 2014, the Mayor launched his Five-Year Housing Plan to invest $1.3 billion in public and private funds toward the construction, rehab and preservation of more than 40,000 housing units citywide. Through the third quarter of last year, more than $200 million has been allocated in 2015 to support more than 6,187 units of affordable housing.
The Home Buyer Assistance Program is open to families and individuals who are buying a home or refinancing an existing mortgage. The program can be used for the purchase of single-family homes, town homes, condominiums and owner-occupied properties containing up to four units. First time home buyers must complete a home buyer education course when participating in the program. You do not need to be a first-time home buyer to qualify.
Anyone who meets the income and credit score requirements is eligible for the program. There are two categories of loans available, each with their own requirements:
- FHA, VA, USDA Loans: Regardless of family size, the borrower’s annual income must be $87,400 or less. As set by FHA, VA, or USDA guidelines, participants will generally need a minimum credit score of 580 to qualify.
- Fannie Mae/Freddie Mac Loans: Regardless of family size, the borrower’s annual income must be $133,000 or less. As set by Fannie Mae/Freddie Mac guidelines, participants will generally
need a minimum credit score of 640 to qualify.
HOW DOES THE PROGRAM ASSIST HOMEBUYERS?
Qualified buyers may receive a grant for up to 7 percent of the total loan amount based on income. For example, for loan amount of $250,000, a borrower could receive a grant of no more than $17,500 to cover down payment and closing costs.
The program is intended to assist a broad range of families that include middle- and low-income households. Depending on whether a home buyer selects a FHA-insured loan or a loan insured by Fannie Mae or Freddie Mac, home buyers can have an annual income of up to approximately $133,000.
HOW DO I APPLY?
The program will be administered by the Chicago Infrastructure Trust, which will work in conjunction with authorized lending institutions responsible for accepting and processing applications, accepted on a first-come, first-serve basis.
WHAT ELSE SHOULD I KNOW?
- Qualified borrowers will be required to contribute the lesser of $1,000 or 1% of home purchase price at the closing.
- You may use this program to help refinance your home, as long as there is no cash back to the borrower
CAN I COMBINE THE PROGRAM WITH OTHER PROGRAMS & CREDITS?
The Home Buyer Assistance Program can be combined with the City of Chicago TaxSmart program, which provides federal income tax credit to qualified home owners. Available only through participating lenders, the program allows a home buyer or homeowner to claim a tax credit for a portion of the mortgage interest paid each year. Current rate of annual savings is 25 percent for a new home purchase or 50 percent for home improvement or rehab loans, for a maximum tax credit of $2,500 annually. As with the Home Buyer Assistance Program, purchase price and income limits also apply.
Contact Mills Realty for more information 773-764-9547 and ask for Leroy Viamille
Credit Chicago Association of Realtors