Illinois Home Start Loan Program can help Naperville buyers

THE ILLINOIS HOME START LOAN PROGRAM FOR FIRST TIME HOME BUYERS

Naperville area first time home buyers, the State of Illinois has come up with a program to allow you to use the Federal Tax Credit monies as a zero interest loan to cover a portion of your down payment. A couple of caveats:  the program (as we interpret the just published guidelines) only applies to single family homes, and, you must use one of the Illinois Housing Development Authority (IHDA) approved lenders.

The following information was taken from an IHDA brochure. A chart detailing Home Start Program Requirements may be found here.

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The Illinois Home Start Loan Program helps to make home ownership affordable for home buyers wishing to purchase their first home. The Program offers two loans: the Home Start 30 Year Fixed Rate Loan and an optional Home Start Tax Credit Advance Loan. The Illinois Home Start Loan Program is offered by the Illinois Housing Development Authority (IHDA) on behalf of the State of Illinois and is available through IHDA lending partners across the state.

30 Year Fixed Rate Loan

What you get:

• 30 year loan
• Fixed interest rate
• Loan insured by the Federal Housing Administration (FHA)
• Option to use in conjunction with the Home Start Tax Credit Advance Loan Program.

Qualifications:

• First time home buyer (except Veterans and active duty service personnel)
• Minimum credit score of 660
• Must be able to contribute 1% of the purchase price from their own savings, or $1,000, whichever is greater.
• Eligible properties must be existing one-unit, single family properties.
• Must complete home buyer education ***

Restrictions:

• Income and purchase price limits apply ***
• Property must be occupied as the home buyer’s primary residence within 60 days of closing. Home buyer must maintain occupancy for the life of the loan.
• May not be used with a Mortgage Credit Certificate (mcc)

Tax Credit Advance Loan

How it works:

The Illinois Home Start Tax Credit Advance Loan allows first time home buyers who plan to take advantage of the $8,000 federal stimulus tax credit access to the refund to use for the down payment on their new home. IHDA will make a 0% interest loan for up to 3.5% of the purchase price with a maximum loan amount of $6,000. If the Tax Credit Advance Loan is repaid in full by June 30, 2010, only the first mortgage remains. Otherwise the Tax Credit Advance Loan will become a second position ten year amortizing loan at 0.5% above the interest rate on the Illinois Home Start 30 year loan.

Qualifications:

• Must qualify and secure a Home Start 30 Year Fixed Rate Loan
• First time home buyer (except Veterans and active duty service personnel)
• Must complete home buyer education ***

Restrictions:

• Must be used with the 30 Year Fixed Rate Loan
• Home purchase and mortgage loan must close on or before November 30, 2009
• May not be combined with other grant sources funded by the Illinois Affordable Housing Trust Fund or federal HOME funds
• Income restrictions apply ***

Fee:

A $300 processing fee will be charged for each loan at closing. If the loan is repaid in full by June 30, 2010, $100 of that fee will be refunded to the home buyer.

How to apply: Contact an IHDA partner lender to apply ***

PLEASE NOTE: Participation in the Home Start Tax Credit Advance Loan program is entirely optional. Home buyers can opt for just the Home Start 30 Year Fixed Rate Loan. However, participation in JUST the tax credit advance program is not permitted

*** For more details, visit: www.ihda.org