IHDA announces Illinois Hardest Hit mortgage assistance program

The Illinois Hardest Hit Program, to be administered by the Illinois Housing Development Authority (IHDA), was announced on September 15 by Governor Pat Quinn. The program utilizes $345 million in federal funds to support working families having trouble making mortgage payments due to unemployment or under-employment.

Below is information from the IHDA news release about the program, which has an official website www.IllinoisHardestHit.org (the only website for applications).

The program allows eligible participants to receive up to $25,000 over 18 months as a 10-year loan to keep mortgages current and make ongoing payments, including fees and penalties. The loan is forgiven over the last five years of the 10-year term and carries zero interest. Funds for the program are supplied by the U. S. Department of the Treasury. Illinois is among 18 states and Washington, D.C., that received funding for the program earlier this year.

“The best way to stabilize our neighborhoods is to prevent foreclosures before they happen,” said Mary Kenney, IHDA executive director. “This program will make a difference in people’s lives and in our communities.”

Free applications for the program are available exclusively through IHDA’s Illinois Hardest Hit website at www.IllinoisHardestHit.org. Applicants will be matched with a local review agency that will answer questions, pre-screen applicants for eligibility and assist homeowners in preparing the application and assembling the required supporting documentation.

Eligibility criteria for the program include:

  • Property must be located in Illinois
  • Household must have a documented income reduction of at least 25 percent due to unemployment or under-employment through no fault of their own
  • Household income must be at or below 120 percent of the area median income
  • Principal loan balance of a mortgage must not be more than $500,000
  • Household liquid assets cannot exceed 3 months of mortgage payments
  • Property, which can be a 1-4 unit building, must be the primary and only residence of all borrowers/owners
  • Homeowners must carry a fixed or adjustable rate loan; negative amortization or interest-only loans are not eligible
  • The delinquency and forward payments must fall within available assistance and program guidelines
  • Applicants must not have been convicted of a mortgage-related felony in the last 10 years

The Illinois Hardest Hit program is funded by the U.S. Department of Treasury and does not have a fee for applying. Applicants should be aware of the prevalence for mortgage assistance fraud; no mortgage assistance program requires a fee.

New first-time buyer program for Illinois

As the state’s housing finance agency, the Illinois Housing Development Authority (IHDA) offers SmartMove—a suite of safe and reliable homebuyer loan products available statewide.

SmartMove mortgage products can make the difference in landing a home sale with incentives such as affordable interest rates and down payment assistance.

“Our SmartMove programs provide a secure and affordable way for first-time buyers and Veterans to purchase a home,” says Gloria L. Materre, IHDA executive director.

SmartMove features up to $6,000 for down payment and closing costs as a 10-year zero percent forgivable loan. IHDA’s programs are geared toward borrowers who need extra flexibility on sources of income or who have limited funds for down payment and closing costs.

SmartMove features:

  • Maximum LTVs from 96.5 to 100 percent
  • Conventional, FHA, USDA products available
  • Fixed-rate loans with up to 30-year terms
  • Mortgage insurance requirements at one-third less than other conventional products

Qualifications include:

  • Minimum credit score = 620 (FHA and USDA loans) or 660 (conventional loans)
  • Buyer must contribute 1 percent or $1,000 of purchase price, whichever is greater
  • Household income and purchase price limits apply
  • HUD-approved homeownership counseling required

For a list of lenders offering SmartMove, see www.ihda.org. Call 312-836-5200 to speak with the Homeownership Originations department.

Still a good time to buy even after the tax credit

When the homebuyer tax credit ends today it will still be a good time to buy a home in Illinois. Here’s why.

Mortgage interest rates remain low with 30-year rates hovering just above 5 percent this week according to Freddie Mac. Today’s more affordable home prices are another draw for first-time buyers and those looking to trade-up, invest or relocate.

First-time buyer programs are available from some cities and counties. For example, the City of Chicago’s  Home Purchase Assistance (HPA) program offers down payment and closing cost assistance to qualifying first-time homebuyers. The HOME Program adminstered both by HUD and IHDA helps homebuyers in participating Illinois cities and counties with down payment and closing cost assistance.

First-time buyers may also qualify for a safe and affordable mortgage backed by the Federal Housing Administration (www.FHA.gov or www.HUD.gov), and the Illinois Housing Development Authority’s HOME START program (www.IHDA.org) offers down payment assistance.

Homeownership remains a good long-term investment. In Illinois the median price in 2009 was 5.9% higher than it was 10 years earlier in 1999. Get more facts about today’s Illinois housing markets at www.YourIllinoisHome.com.

Note, for U.S. service members, the homebuyer tax credit deadline is extended through April 2011. According to the Internal Revenue Service, members of the uniformed services, Foreign Service and employees of the intelligence community serving outside the United States are eligible for this special rule.

It’s time to incorporate IHDA’s Home Start program into your pitch to homebuyers

The Illinois Housing Development Authority’s Home Start Loan Program provides a comprehensive package for first-time homebuyers and veterans by offering a 30-year fixed rate loan insured by the Federal Housing Administration with an option to apply for down payment assistance.

Illinois REALTORS® are urged to take advantage of complimentary training opportunities to learn more details about Home Start.

The Illinois Housing Development Authority (IHDA) is ramping up efforts to train REALTORS® about the Home Start Loan Program by providing customized training sessions across the state. Beyond the trainings listed below, IHDA invites REALTORS® to request a free training for their local association or individual broker offices.

“Our Home Start program creates a tremendous opportunity for first-time buyers who want to seize the chance to qualify for the federal tax credit, and take advantage of historically low prices and interest rates,” explains Gloria L. Materre, IHDA Executive Director. “Our free trainings will ensure REALTORS® know more about this homebuying tool.”

Planned REALTOR® trainings include:

  • 10:30-11:30 a.m. March 30
    Coldwell Banker, 5404 W. Devon Ave., Chicago, IL 60646
  • 1:30-2:30 p.m. April 15
    Holiday Inn of Rock Island, 226 17th St., Rock Island, IL 61201
  • 1:30-3 p.m. April 19
    Rockford Association of REALTORS®, 6776 E. State St., Rockford, IL 61108
  • 1:30-2:30 p.m. April 22
    Doubletree Hotel Collinsville, 1000 Eastport Plaza Drive, Collinsville, IL 62234

To attend a planned training or to request a personalized training, please e-mail IHDAEVENT@IHDA.ORG or call (877) 456-2656. Learn more at www.ihda.org.

Look to Home Start program + tax credit for your spring market buyers

The nation’s official groundhog Punxsutawney Phil predicts six more weeks of winter. In some areas in Illinois the spring housing market has already started with the early birds looking to take advantage of the homebuyer tax credit that expires on April 30, 2010.

That means long-time homeowners who want to take advantage of the $6,500 tax credit (defined by the IRS as taxpayers who have occupied the same property as a principal residence for five consecutive years during the previous eight years) need to sign a contract to purchase a new home in the next three months. Note: The IRS does not require qualifying buyers using the long-time homeowner credit to sell their current home before purchasing their next principal residence. For more details, read FAQs from the IRS at www.irs.gov or consult your tax professional.

First-time buyers also have just a three-month window to purchase a home within the guidelines of the $8,000 tax credit.

The down payment often can be the biggest hurdle for first-time buyers. That’s why the Illinois Housing Development Authority (IHDA) created the Home Start Program with its package of low-interest rate mortgage and down payment assistance loans for first-time homebuyers and veterans. It also includes an option to use the tax credit toward the down payment by using IHDA’s Tax Credit Advance Loan.

 1. Home Start First Mortgage

  • 30-year fixed-rate loan
  • FHA insured
  • Affordable interest rates
  • 3.5% down payment required

 2. Down Payment Assistance Loan

  • Provides 3% of the purchase price (up to $6,000)
  • 0%, 10-year forgivable loan
  • Only available with Home Start First Mortgage

3. Tax Credit Advance Loan – Expires April 30!

  • Use the federal first-time homebuyer tax credit toward the down payment
  • Provides 3% of the purchase price (up to $6,000)
  • Only available with Home Start First Mortgage

Qualifications: Applicants must be a first-time homebuyer or a veteran, and have a minimum credit score of 620. Certain income and purchase price limits and debt ratios apply. The buyer must contribute 1 percent or $1,000 of the purchase price, whichever is greater, and complete required homeownership counseling. Borrowers should contact an IHDA-approved lender for program details.

REALTORS®, look to IAR’s tax credit page for a series of consumer flyers to promote the tax credit including:

  • “Buy a Home, Get a Tax Credit” (info on both first-time buyer and long-time buyer credits)
  • “Looking to Sell? Hurry to Get the $6,500 Tax Credit” (information on the long-time buyer credit)
  • “The Home Start Program”