The following specialized mortgage loan programs can help prospective buyers get better financing.
Your Illinois REALTOR®can provide you with mortgage information, discuss financing options and recommend loan
sources to help you get into your new home!
Welcome Home Heroes
Welcome Home Heroes aims at providing closing costs and downpayment assistance to Illinois Veterans
and active military members. It is estimated that nearly 1,000 Illinois veterans and active duty military
members will qualify for the $10,000 grants and other tax credit incentives. For more information, please visit
www.ihda.org or download the fact sheet (pdf).
Illinois SmartMove Loan
Offers up to $6,000 for down payment and closing costs as a 10-year zero percent forgivable loan.
The program is administered by the Illinois Housing Development Authority and targets borrowers who need extra
flexibility on sources of income or who have limited funds for down payment and closing costs. SmartMove's features
included: maximum loan-to-value (LTV) ratios from 96.5 to 100 percent; conventional, FHA, USDA products available;
fixed-rate loans with up to 30-year terms; and mortgage insurance requirements at one-third less than other
conventional products. Household income and purchase price limits apply. Learn more about qualification
requirements and lenders offering SmartMove at www.ihda.org, download an informational flyer or call 312-836-5200 to
speak with IHDA's Homeownership Originations department.
Since 1934, mortgages insured through the Federal Housing Administration (FHA) have helped millions
of people buy a home. Because FHA loans are insured by the federal government, they offer competitive interest
rates and are an option for buyers with less than perfect credit. They have a low 3.5 percent down payment and,
unlike conventional loans, that money can come from a family member, employer or charitable organization. FHA loans
can be used to buy a home, finance repairs to an existing home or for seniors aged 62 or older, be used for a
reverse mortgage. http://www.hud.gov/buying/loans.cfm
UPDATE (Dec. 2011) -- FHA extends “anti-flipping” waiver through the end of 2012, which allows
buyers to purchase homes that have already been sold in the last 90 days. Read more.
VA can guarantee a portion of a loan made by a private lender to help you buy a home, a
manufactured home, a lot for a manufactured home, a condominium unit, or a unit in a cooperative dwelling. VA also
guarantees loans for building, repairing, and improving homes. If you have a VA mortgage, the VA can help you
refinance your loan at a lower interest rate. You may also refinance a non-VA loan. Certain disabled veterans and
military personnel can receive grants to adapt or acquire housing suitable for their needs. www.homeloans.va.gov.
***VA loans require NO Downpayment and have NO Private Mortgage Insurance.
Local City or County Programs
Check with your local city or county government. For example, the City of Chicago has a Home Purchase Assistance (HPA) program that offers down
payment and closing cost assistance to qualifying first time homebuyers. The HOME Program adminstered both by
homebuyers in participating Illinois cities and counties with down payment and closing cost assistance.
USDA Illinois Guaranteed Rural Housing Loan
This program offers 100 percent financing with no monthly mortgage insurance, competitive fixed
interest rates and expanded qualifying ratios of 29 percent and 41 percent. There is a one-time guarantee fee
that may be rolled into the loan at close regardless of the appraised value. Existing dwellings or new
construction properties qualify when located in eligible rural areas. This program is NOT just for first-time
buyers. Applicants may apply with local approved Rural Development lenders. www.rurdev.usda.gov
Established by the Illinois State Treasurer’s Office in 2002, the program helps qualifying Illinois
residents buy a home or keep their existing homes from going into foreclosure. It’s a free program that helps
borrowers who cannot obtain conventional mortgages from credible lenders due to credit issues or a high
debt-to-income ratio. The program can also help borrowers refinance a mortgage if they are facing an ARM reset
or certain financial hardships defined by statute and show that that they will likely be able to continue or
resume making payments. www.treasurer.il.gov/programs/finally-home/finally-home.aspx
Mortgage Credit Certificate
This program of the Illinois Housing Development Authority applies to first-time homebuyers or
borrowers who have not owned a home in three years. The Mortgage Credit Certificate (MCC) allows up to 20
percent of the mortgage interest (up to $2,000) to be claimed as an IRS tax credit. This can be an immediate
benefit by filing a revised W-4 withholding (more take-home pay) or as a tax refund at the end of the year. This
certificate must be applied for at the time of loan application and can be used with any FHA, VA, RD or
conventional loan, allowing the borrower to qualify for a more expensive home, and good for the life of the
Illinois Hardest Hit Program
The Illinois Housing Development Authority has partnered with the U.S. Department of Treasury to
offer temporary mortgage payment assistance to households that are struggling with income loss due to unemployment
or underemployment, but are working to regain sufficient income to keep their home.
The Illinois Hardest Hit Program offers two types of assistance:
1. Reinstatement assistance to pay mortgage arrearages, fees, and penalties in full, and
2. Monthly mortgage payment assistance to pay 100% of the mortgage payment owed to the servicer for
up to 18 months while the household makes monthly contribution payments to the Illinois Housing Development
Authority during their enrollment in the program. Maximum assistance is $25,000, depending on location.