Illinois Home Start Loan Program
Illinois has introduced a new program to ramp up sluggish home sales. It is called the Illinois Home Start Loan Program. This program allows first time home buyers the opportunity to buy an existing home with zero down payment needed at the closing table. There are some qualifications and this program ends on November 30, 2009. Mortgage brokers recommend having your property under contract at least 45 days before the November 30, 2009 deadline or you may lose out on this fantastic program.
Illinois Home Start Loan Program Helps First Time Home Buyers
The Specifics:
What the Illinois Home Start Loan Program comes down to is that it offers 2 loans.
1. 30 Year Fixed Rate Loan
This loan is insured by the Federal Housing Administration (FHA) and serviced by U.S. Bank Home Mortgage.
2. Tax Credit Advance Loan
This loan allows first time homebuyers in Illinois the opportunity to get a short term loan to use as the down payment towards the purchase of their home.
This program is designed specifically for first time home buyers and not existing home owners or investors. The Illinois Home Start Loan Program allows first time home buyers the opportunity to use the government $8000 tax credit (American Recovery and Reinvestment Act) and adds a twist to it. The twist is that first time home buyers can now use up to $6000 or 3.5% of the home purchase price (whichever is greater) to use as the down payment in purchasing a home. For some first timers, this may mean that no down payment money is needed at the closing table.
After the first time home buyer purchases their home, they will file a return with the IRS (or an amended return) to pay back the Tax Credit Advance Loan. If the loan is not paid back in its entirety by June 30, 2010, the remaining loan amount will become a 10 year loan at .5% above the 30 year fixed rate loan.
There are some qualifications which must be met in order to receive both the 30 Year Fixed Rate Loan (can be obtained by itself) as well as the Tax Credit Advance Loan. For instance, the property must be a one unit single family property (some townhomes apply). The first time home buyer must have a minimum FICO credit score of 660. The buyer must also occupy the property within 60 days after closing and remain in the property for the life of the loan. The buyer must close on or before November 30, 2009. There are several other program requirements which any FHA approved mortgage lender would be more than happy to provide more information.
All in all the Illinois Home Start Loan Program looks to be just what the Illinois real estate market needs at this time to ramp up existing property home sales. First time home buyers take note though. In order to use this program, you must close on a property before November 30, 2009. Mortgage brokers are recommending that a property be put under contract 45 days before closing, so time is of the essence!!!
