The Illinois Housing Development Authority is offering down-payment assistance for first-time homebuyers.
The housing authority received $30 million from the U.S. Treasury Department to help homebuyers in 10 Illinois counties, including St. Clair and Marion counties, through the 1stHomeIllinois loan program, the agency said Tuesday.
Up to 4,000 first-time homebuyers buying a house in one of the 10 counties can be assisted through the program, IHDA said.
The down payment assistance comes from the Treasury Department’s Hardest Hit Fund.
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Qualified homebuyers receive $7,500 in down-payment assistance with an interest rate that could be as low as 4.125 percent for a 30-year fixed rate mortgage, IHDA said.
The $7,500 assistance is forgivable as long as the homebuyer stays in the house for at least five years, IHDA said.
Illinois is the second state to launch the down-payment assistance program, which is meant to drive housing demand and stabilize housing prices.
Through the Hardest Hit Fund, IHDA also has started programs to reduce blighted properties, provide emergency loans to homeowners to help them stay in their houses, and provide loan modifications to underwater and delinquent borrowers, the agency said.
“The Hardest Hit Funds have allowed us to stem the tide of foreclosures across Illinois,” IHDA Executive Director Mary R. Kenney said. “1stHomeIllinois is the latest move in IHDA’s holistic strategy to help neighborhoods stabilize and to reinvigorate the economy. By putting programs in place, like 1stHomeIllinois, we are helping qualified first-time buyers get into the marketplace and ensuring that communities rebound.”
The 10 counties that are part of the down-payment assistance program are above the state average in distressed housing market indicators such as delinquency rates, negative equity and foreclosure rates, IHDA said.
The program is opened to first-time homebuyers, veterans, or anyone who hasn’t owned a home in the last three years. Participants in the program also have to meet income requirements. A family of three cannot earn more than $101,220 a year, said Man Yee Lee, IHDA’s assistant director for marketing and communications.
Homebuyers in the program have to contribute $1,000 or 1 percent of the purchase price, whichever is greater, and need a credit score of at least 640.
People who participate in the program would have to finance a house through one of IHDA’s partner lenders, Lee said.
“This is one of the ways we’re trying to get the economy going and get money into the local economy,” Lee said.