NEW IHDAccess Mortgage Products

If you are thinking about purchasing a home but money is a little tight, we’ve got some BIG news for you —

On February 1st, 2018, The Illinois Housing Development Authority (IHDA) rolled out THREE new programs that helps people statewide with limited income purchase a home.

The main objective of using an IHDA loan product is to make the idea of homeownership reality. Each program is custom designed to make sure borrowers can comfortably afford they home they buy.

In addition, the program offers safe fixed-interest loans with affordable rates that won’t break your wallet. Qualified homebuyers can even receive down payment and closing cost assistance.

Recently, the IHDA announced they have created three new Access Mortgage products. The program welcomes first-time and even repeat homebuyers to utilize the products. Each Access Mortgage program has special down payment options to accommodate borrower’s financial needs.

Eligible borrowers can receive up to $10,000 to help finance the down payment and closing costs for either their new or existing home. These programs are also offer statewide, which makes the idea of homeownership easier to obtain.

With affordable fixed-interest rates and countless benefits, all three Access Mortgage programs make purchasing a home stress-free!

Below, we will discuss in-depth about the new Access Mortgage products available.

 

IHDAccess Forgivable

Forgivable

The Access Forgivable mortgage offers 4% of the purchase price up to $6,000 in financial assistance for the down payment and closing costs. The program is designed as a 30-year fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHA, VA or USDA loan.

In order to be considered eligible, borrowers must have a minimum credit score of 640. Newly constructed or existing homes are eligible to be financed.

There are also household income requirements and purchase price limits that need to be followed. The home purchased must be lived in as the primary residence.

Borrowers are required to invest 1% of the purchase price or $1,000 toward the transaction, whichever is greater.

In addition, borrowers must complete homeownership counseling before they close. These programs are offered online or in-person. Under certain circumstances, borrowers may be exempt to complete the course.

IHDAccess Deferred

Deferred

The Access Deferred mortgage offers 5% of the purchase price up to $7,500 in financial assistance for the down payment and closing costs. This product is offered as an interest-free loan; the interest is deferred during the life of your mortgage. Borrowers will not need to pay for interest until they sell their house, refinance or pay off their mortgage, whichever happens first.

The program is designed as a 30-year, fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHA, VA or USDA loan.

In order to be considered eligible, borrowers must have a minimum credit score of 640. Newly constructed or existing homes are eligible to be financed.

There are also household income requirements and purchase price limits that need to be followed. The home purchased must be lived in as the primary residence.

Borrowers are required to invest 1% of the purchase price of $1,000 toward the transaction, whichever is greater.

In addition, borrowers must complete homeownership counseling before they close. These programs are offered online or in-person. Under certain circumstances, borrowers may be exempt to complete the course.

IHDAccess Repayable

Repayable

The Access Repayable mortgage offers 10% of the purchase price up to $10,000 in financial assistance for the down payment and closing costs. This product is offered as an interest-free loan; the interest-free loan; the interest is repaid monthly over a 10-year period with zero interest.

The program is designed as a 30-year, fixed-rate mortgage and is available to both first-time and repeat homebuyers across Illinois.

Borrowers can finance this mortgage as an FHA, VA or USDA loan.

In order to be considered eligible, borrowers must have a minimum credit score of 640. Newly constructed or existing homes are eligible to be financed.

There are also household income requirements and purchase price limits that need to be followed. The home purchased must be lived in as the primary residence.

Borrowers are required to invest 1% of the purchase price or $1,000 toward the transaction, whichever is greater.

In addition, borrowers must complete homeownership counseling before they close. These programs are offered online or in-person. Under certain circumstances, borrowers may be exempt to complete the course.

Additional requirements

If applicants are interested in one of these programs, your lender will determine your eligibility. They will evaluate the following:

  • Program criteria
  • Income and purchase price restrictions (varies for each borrower depending on income and property location)
  • First-time homebuyer status (however, repeat buyers are STILL eligible)
  • If the purchase home is a qualified dwelling (single family dwelling homes include condos, townhouses and 2-unit properties)

Borrowers also must meet IHDA’s debt-to-income (DTI) ratio. Majority of lenders will allow a maximum DTI ratio of 45%.

This means, your monthly debt payments need to be 45% or lower of your gross monthly income. This ratio shows lenders how financial stable you are while factoring in recurring debts.

It also will provide lenders a realistic idea of how much money you will have left over to cover mortgage payments, in addition to other home-related costs.

Because each program allows borrowers to make a low down payment, they are required to purchase mortgage insurance (MI). Mortgage insurance is required by lenders when borrowers make a down payment less than 20 percent.

This insurance premium only protects the lender if the borrower stops making payments on their mortgage.

Each program offers borrowers the option to pay for MI as a monthly premium (that would be calculated into mortgage payments and total loan balance), or a single premium that would be paid upfront at closing.

Just like a regular FHA or fixed-rate loan, all Access Mortgage products require specific documentation from borrowers. Generally, your lender will require the following information:

  • Three years of W-2’s
  • Three years of tax returns
  • Names and addresses of employers from the last three years
  • Copies of stubs for each applicant
  • Bank statements from the last three months
  • Verification of current employer, position and income
  • Dividend earnings
  • Social Security and disability payments (if applicable)
  • Bonuses
  • Debts
  • Security accounts or assets

Lastly, single-families that apply for any one of the Access Mortgage products are not required to have cash reserves.

Cash reserves are funds that need to be set aside for mortgage payments after closing.

Some lenders require borrowers to have at least three months’ worth of cash reserves to make sure they have enough money to cover mortgage payments.

All three Access Mortgage products do not require single-families to have cash reserves.