Making the decision to buy your first home is a large and expensive commitment. It’s important that you know all of the financial options that are available to you. There are many different types of first-time home buyer programs that have been developed to help you with your down payment and closing costs. These include government-sponsored programs, charitable organizations, local and federal tax credits and educational programs.

Down Payment Assistance (DPA)

A down payment is needed when you buy any home as a deposit, it is also required in order to get a mortgage. There are several options when it comes to payment assistance. These are usually in the form of grants or low and no-interest loans.

A few options include

  1. Second mortgages – these have to be paid at the same time as your main mortgage.
  2. Deferred payment loans  –  these have to be paid in full when you sell, refinance, move or pay off your main mortgage.
  3. Forgiven loans – these can be deferred for a set number of years, unless you move, sell, refinance or pay off your main mortgage before this time expires, in which case you have to pay off the full amount.
  4. DPA Grants – these don’t have to be repaid and are given by your local or state department.
  5. Government – Backed Loans

A loan backed by the federal government can also help qualified first-time home buyers Illinois purchase with no down payment

Closing Assistance

There are also available, government-sponsored and private programs that can help you pay the closing costs of the sale of your house. Closing costs are additional fees that have to be paid when you come to the end of the mortgage process. They are usually between 2-6% of the total value of your home loan.

Home Buyer Education

There are educational programs offered that will help you understand buying processes, and how to apply for a  mortgage or a loan.

Federal, local and state  First-Time Home Buyer Programs

These are open to legal residents and US citizens

Government-Backed Loans

These help you purchase a house even if you have a low down payment or poor credit.  There are three government-backed loan options: FHA loans, USDA loans and VA loans.

Good Neighbor Next Door

This is a programme developed specifically for pre-K – 12 teachers, emergency medical technicians, firefighters or law enforcement officers, which is sponsored by the Department of Housing and Urban Development (HUD).

HomePath® Ready Buyer™ Program

Home buyers have the chance to purchase a foreclosed property on this program with a down payment of as little as 3% You can even apply for up to 3% of your closing costs back..

State And Local First-Time Home Buyer Programs

Government programs that assist first-time home buyers Illinois vary from state to state, there is a full list on the HUD website.

Charitable Or Nonprofit First-Time Home Buyer Programs

If your income is low, you may qualify for charitable or nonprofit assistance. These are non-government programs.

Habitat For Humanity

This a well-known, very popular international organization that provides low-income families with affordable housing. The housing is built by volunteers and the organization receives no profit after the sale.

Neighborhood Assistance Corporation Of America (NACA)

The Neighborhood Assistance Corporation of America (NACA) is a  nonprofit organization that offers education for low-income families and helps them find a lender. These loans have no down payments or closing costs or minimum credit score.

First-Time Home Buyer Loans And Grants For Students

Students may have more difficulties finding funding due to their student loans

FHA and VA loans,

These loans are great for students needing to balance mortgage repayments and student loans.

Some states offer first-time homeowner financial assistance specifically for students that have student loans. Some offer specific loans, help with the down payment or help to reduce the mortgage rate.