Financing Options and Down Payment Assistance? | HomeStart

Financing Options and Down Payment Assistance

When purchasing a home, there will likely be a down payment requirement.  Down payment assistance in the form of forgivable loans may be available.  Most programs are on a first-come, first-serve basis and there are income restrictions.  HomeStart will work with you to explore all possible opportunities for financial assistance toward your housing down payment.

Illinois has two down payment and closing cost assistance programs: Down Payment Plus and First Home Illinois.  They are both five year, forgiveable grants paid on behalf of the borrower at the time the borrower closes on mortgage financing with a participating financial instiution.  The borrow may combine grants as long as the total amount does not exceed 20% of the purchase price and both programs are offered at the financial insitution where the borrower is receiving the mortgage loan.

Both programs require that the borrower:

  • Contribute a minimum of $1,000 from personal funds toward the purchase of the home
  • Complete a homebuyer counseling program prior to receiving grant funds. (HomeStart's in-person or online Homebuyer Education Course)
  • Purchase a one or two unit property in Illinois
  • Live in the property as primary residence

Down Payment Plus:

Funded through the Affordable Housing Program of the Federal Home Loan Bank of Chicago.  The DPP program is a purchase program, not a refinance program.  The maximum amount of the grant is $6,000.  The Borrower must have an annual household income at or below 80% of the HUD median income of the area in which the property is located.  The property can also be located in Wisconsin.  For participating lenders and more information, click here.

First Home Illinois:

Funded through Illinois Housing Development Authority (IHDA) for first time homeuyers.  The maximum amount of the grant is $7,500 and the homebuyer must be financing with a 30 year fixed rate loan. For income limits, participating lenders and more information, click here.

City of Rockford Homebuyer/Rehabilitation Program

HomeStart is partnering with the City of Rockford's Homebuyer/Rehabilitation program. Through this program you can receive up to $5,000 in down payment assistance toward the purchase of a currently vacant home as well as up to $20,000 toward repairs on your new home. In some situations the City can provide up to an additional $5,000 in homebuyer assistance and up to another $15,000 in rehabilitation funds. Please visit the City's program website for more information about the program including a FAQ.

Special Financing for Rural Areas