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Get down payment help with Chicago’s Home Buyer Assistance Program


Chicago’s Home Buyer Assistance Program is making homeownership easier in Cook County. Not only can you use this grant for down payment assistance in Chicago, but you can also use it towards closing costs on your home.

Below, we’ll review the details of Chicago’s Home Buyer Assistance Program, the major benefits, how to qualify, and details about how the grant works to help you with your down payment and closing costs.

What is Chicago’s Home Buyer Assistance Program?

The Chicago City Council created the Home Buyer Assistance Program to make homeownership easier for Chicago residents by offering grants to help with down payments and closing costs. The program is available to individuals and families who are buying or refinancing. This assistance can cover up to 7% of the total loan amount for the down payment and closing costs.

This Chicago-only program can be used to purchase single-family-homes, townhomes, condos, and owner-occupied properties (up to four units). Better yet, you don’t need to be a first-time home buyer. The Chicago City Council is willing to help you in exchange for you staying at that address for at least five years - which improves the local economy.

Keep in mind, this program is a first come, first serve program. That means once the funds are used up, there is no guarantee it will continue. If you’re looking to purchase in Chicago in the near future, we suggest you move ASAP to make it more likely you can capitalize on this offer.

What are the requirements to qualify for the program?

The requirements for the Home Buyer Assistance Program are straight forward. There are two different loan categories you may qualify for:

FHA, VA, USDA Loans:

  • Regardless of family size, your annual income must be less than $97,290.
  • You must have a 580 credit score or higher.
  • You are required to contribute the lesser of $1,000 or 1% of the home purchase price at closing.
  • You must be purchasing a home within the Chicago city limits. For properties in Cook County, but outside Chicago, review the MMRP for targeted areas.
  • If you are a first time home buyer, you are required to complete a home buyer education course.

Fannie Mae/Freddie Mac Loans:

  • Regardless of family size, your annual income must be less than $148,050.
  • You must have a 640 credit score or higher.
  • You are required to contribute the lesser of $1,000 or 1% of the home purchase price at closing.
  • You must be purchasing a home within the Chicago city limits. For properties in Cook County, but outside Chicago, review the MMRP for targeted areas.
  • If you are a first time home buyer, you are required to complete a home buyer education course.

If you live outside of Chicago, take a look at IHDA for state-wide Illinois down payment assistance.

How much can I qualify for?

If you qualify for the grant, you could receive as much as 7% of the total loan amount to put towards your down payment and closing costs - depending on your annual income. That means if you were looking to purchase a home for $350,000, you could get a grant for as much as $23,500.

How do I apply?

One of two things needs to happen immediately to very that you’re qualified. You’ll need to get pre-qualified with a lender for a mortgage with the down payment assistance. If you’re a first time home buyer, you’ll need to take an eight-hour home buyer education course prior to closing.

Here are the two main steps to take to apply and qualify:

1. Complete the eight-hour home buyer education course.

  • List of approved Housing Counseling Agencies.
  • Select an agency and register at their website to complete the pre-purchase education classes.
  • A pre-purchase certificate is required for each first time home buyer applicant regardless of the lender.

2. Select a qualified lender and reach out.

  • Your lender will handle qualifying you and securing the funds for your down payment and closing costs. Once you’ve chosen a qualified lender, you’ll only need to worry about qualifying for the mortgage.
  • The big item to remember is how much you need to bring to the table: The lesser of 1% or $1,000 + anything that isn’t covered by the 7% (which shouldn’t be much if anything).

Does this add to my monthly mortgage payment?

Nope. As long as you maintain the property as your primary residence and do not refinance for at least five years, then you will not have to pay back anything! Remember the motivation for the city helping you: They want you to stay in Chicago. So, if you need to leave for any reason sooner than five years, you’ll need to pay them back a recapture.

Where does the grant money and my mortgage come from?

The money for your loan will come from two sources. Your down payment assistance will come from Chicago. The “loan” amount will come directly from the mortgage lender of your choice who participates with the Chicago down payment assistance program. On your closing day, everything will happen simultaneously to pay your seller everything agreed to within the contract.

The Home Buyer Assistance Program of Chicago has its own interest rates, so they’ll be the same regardless of your lender.

What is recapture and how does it work if I have to move?

As a reminder - you are not making monthly payments to pay back the grant money. This particular section is only relevant if you move, sell, or refinance prior to the five-year mark from your closing.

Recapture is the act of taking back some of what was given due to changes in the agreement. Below are the terms for the city of Chicago’s Home Buyer Assistance Program recapture:

“The Recapture Amount is the Grant Amount hereunder and shall be forgiven by 1/60th of the Grant Amount on the anniversary of each month subsequent to the Closing Date. The Recapture Amount due on the Recapture Date shall be calculated as the Grant Amount minus any amounts forgiven prior to the Recapture Date, but shall not exceed the net gain to be received by the Mortgagor through any sale or refinancing of the Premises as determined by the Lender.

(d) there shall be no repayment of the Grant Amount except for the Recapture Amount which shall be immediately due and payable on the Recapture Date. The Mortgagor has specifically made this Mortgage in favor of Mortgagee to secure the Recapture Amount, and to ensure the use of the Grant proceeds in accordance with the Program Rules.”

“Hereunder” is referring to the amount you were granted, as would be determined based off of your property and loan.

But why leave Chicago when they have some of the cheapest property taxes for the region?

chicago down payment assistance property tax chart

(Sourced from Chicago Business)

Staying in Chicago has serious benefits beyond saving on your monthly bills. In many areas of the city, you’re able to operate without a vehicle entirely. Something that is nearly impossible in the suburbs where you’ll pay higher property taxes and need to drive nearly everywhere you go. Considering a move to the city? Check out our article on Bucktown where our office is located!

Ready to see if you qualify?

Reach out to us today to find out what you’ll need to do to get qualified for the mortgage you need to buy the home you deserve. Schedule a meeting with me and we can discuss your situation further to see if this would be the right fit for you.

We covered quite a bit in this blog - but, in the end, it’s all pretty straightforward. Chicago wants to invest in you and help you become a homeowner, there’s no reason to keep renting when there are programs like this available to you to help you buy. There are no strings attached and it’s easier to qualify than you realize.

Did you hear about a down payment assistance or mortgage program that we haven’t covered? Let us know about it in the comments!

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