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Chicago Home Buying Assistance Programs Explained

With a booming real estate market, buying a home is becoming increasingly more difficult. In this article, we will outline some of the Chicago Home Buying Assitance Programs that can help you buy a home.

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Chicago Home Buying Assistance Programs Explained

Unless you’ve been living under a rock, you’ve probably heard that the real estate market is booming. Everyone’s buying, and there just isn’t enough inventory. If you’re still renting, you might be wondering how all these people are able to afford to purchase a home when you’re not quite able to pull together a down payment.

There’s a secret out there that not everyone knows about. There are actually a ton of assistance programs out there for people just like you who are ready for homeownership but need a little bit of help getting there. With so many options of programs, grants, or tax credits, there has to be one out there for you. The hard part is finding it – so we’re here to help.

Building Neighborhoods and Affordable Homes Program

This program is designed to boost home sales in the targeted neighborhoods of Englewood Square, North Lawndale, South Lawndale, Humboldt Park/Garfield Park, and Woodlawn. It offers up to $60K in purchase assistance for specific homes that can be used to fill appraisal gaps, pay closing costs, down payments, senior loan principal reductions, appraisals, inspections, or pre-paid interest or insurance. 

Bulding Neighborhoods and Affordable Homes Program Main Requirements:

  • Income cannot be more than 140% of the median income
  • Homes must be primary residences for a minimum of 10 years or must be sold to an income-qualified buyer
  • Houses must be built through the City Lots for Working Families program

Tax Increment Finance Purchase Rehab Program

Run by the Neighborhood Lending Program and Neighborhood Housing Services, this initiative is meant to help provide first or second mortgage loans to purchase or rehab one-to-four family homes. The forgivable loan can be used for up to 25% of the purchase and rehab.

Tax Increment Finance and Purchase Rehab Program Main Requirements:

  • Make below 120% the Area Median Income
  • Take a one house course to determine mortgage readiness
  • Attend all required workshops 
  • Select an eligible property and obtain a loan from a participating lender
  • Live on the property for 10-15 years, depending on the amount of assistance

IHDAccess Forgivable

The IHDA Mortgage Forgivable program supplies safe and fixed interest loans at affordable rates for first-time and seasoned buyers. It’s available for all mortgage types and offers 4% of the purchase price up to $6,000 in down payments or closing costs on a 30-year, fixed-rate mortgage that you won’t have to repay.

IHDAccess Forgivable Main Requirements:

  • Income and purchase price limits
  • Credit score of at least 640

IHDAccess Deferred

With this program, you can get up to 5% of the home price up to $7,500 in assistance for down payments or closing costs that you won’t have to repay until you sell your home or pay off your mortgage. It’s available with all mortgage types for first-time and seasoned home buyers.

IHDAccess Deferred Main Requirements:

  • Income and purchase price limits
  • Credit score of at least 640

IHDAccess Repayable

This program offers up to 10% of the purchase price on your home up to $10,000 towards downpayment or closing costs that you repay monthly over ten years. It works with all mortgage types on a 30-year, fixed-rate mortgage for first-time or seasoned home buyers.

IHDAccess Repayable Main Requirements:

  • Income and purchase price limits
  • Credit score of at least 640

TaxSmart Chicago

The tricky part of this program is that you need to know about it and apply when applying for your mortgage. It is a Mortgage Credit Certificate program that offers a tax credit for first-time homebuyers on a portion of the mortgage interest paid per year. It can save you up to $2000 per year.

* As of December 31, 2021, the program has temporarily ended and will reopen when new funds are made available *

TaxSmart Chicago Main Requirements:

  • First-time homebuyer (has not owned a home in the prior three years)
  • Must receive HUD-approved in-person pre-purchase counseling 
  • Limits on annual gross income and purchase price
  • Must be owner’s principal residence and a one-to-four family home
  • In the City of Chicago
  • Mortgage must be new and not replace another

Get An Offer Today and Sell Your House This Week