General Parameters (All Loans)
- Started June 1, 2016
- Purpose: to provide down payment assistance for qualified borrowers (elibigility info, below) in connection with FHA, VA, and Freddie Mac Eligible loan financing for properties within city limits.
- Purpose: to provide continuous funding to all eligible borrows. *Note: the city reserves the right to suspend the program at any time
- Primary residence only, borrows and spouses must permanently reside in the U.S. and must occupy the property as their principal residence within 60 days of closing.
- No price limit.
- The city’s grant must be used to fund up to 100% of the borrower’s cash to close; including the borrower’s required down payment (subject to the minimum borrower investment as stated herein), closing costs, financing costs, prepaids/escrows as defined by HUD and Freddie Mac.
- Subject to repayment if property is sold or refinanced within the first 5 years from note date. Otherwise lien is released free and clear after 5 year anniversary of note.
Borrow Eligibility
- Borrowers must have a minimum representative/indicator credit score in accordance with FHA, VA, or Freddie Mac and mortgage insurer guidelines.
- Borrowers need not be a first time homebuyer. If borrowers are a first time homebuyer, they must complete a city approved HUD-certified Homebuyer Education Course and receive a certificate of completion.
- Borrowers must have a minimum representative/indicator credit score in accordance with FHA, VA, or Freddie Mac and mortgage insurer guidelines.
- Freddie Mac loans: currently, qualifying annualized income of up to $133,000, regardless of family size. *as reported in the Freddie Mac Underwriting and Transmittal Summary, or such other income limits approved by the program sponsor.
- FHA/VA loans: currently, qualifying annualized income of up to $87,400 regardless of family size. *as reported in the FHA Underwriting and Transmittal Summary, or such other income limits approved by the program sponsor.
- Qualifying income must include all stable monthly income for all Borrowers on the note. Household income does not apply. Income limits are subject to annual update and revision by the program sponsor.
Homebuyer Education
- Required for borrows on the note who are first time homebuyers. Borrowers must attend local home buyer education courses with counseling centers approved by the city. A Home Buyer Education Certificate of Completion in the borrower’s name is a condition for the loan to close.
- Please refer to the city’s home buyer counseling website HERE for a list of approved home buyer counselors.
Eligible Properties
- must be primary residence
- 1 unit
- condominiums
- PUDs
- townhomes
- manufacture homes are permitted per FHA and VA guidelines
Borrow Profile
- A minimum indicator score of 600 is required for all borrowers unless a higher score is required herein. If any of the borrowers do not have a usable credit score, the loan is NOT eligible.
- The lesser of $1,000 or 1% of the purchase price from the borrower’s own personal funds per Freddie Mac guidelines or such greater amount as required by the Mortgage Insurers. (minimum borrow investment)
- No maximum Debt to Income ration but subject to Loan Prospector approval and manual underwriting guidelines.
Click HERE to read more into this program.
Have more questions on how the Chicago Down Payment Assistance Program works? Contact Shay!
