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Today’s Rates for First Time Homebuyers in Chicago

Tuesday, August 4, 2020

Mortgage rates are at 3.00% for the 30 year fixed loan program and at 2.38% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 4.56%. Check out FHA and VA rates as well if you are doing low or no down payments.

Chicago First Time Buyer Home Loan Programs

Interested in a buying your first home in Chicago Illinois, and curious about your financing options? Explore everything from government-backed and first time homebuyer assistance loans to mortgage tax credits and more in Lender411's comprehensive guide to Chicago mortgage. 

Chicago FHA Loans

FHA loans are insured by the Federal Housing Administration, and have long been a favorite option for Chicago first time homebuyers and homebuyers with smaller savings, thanks to their low down payment requirements and lenient credit standards. Take a look at current FHA loan facts and requirements:

  • Down payment, loan-to-value (LTV): 3.5%, 96.5%.
  • Credit score minimum: Typically 580 or greater. 
  • Debt-to-income (DTI): Typically 45-50% or less. 
  • Upfront mortgage insurance of 1.75% the base loan amount is required. 

Annual mortgage insurance premiums of varying percentage are also required, and paid monthly. New FHA borrowers, however, will receive annual MIP rates of half a percent lower than the original rate, typically 1.35%.

Chicago First time Homebuyer Loan Programs

If you live in Chicago and are a first time home buyer, there are a number of resources that are available to you. These programs are meant to help you be able to afford the down payment and/or closing costs:
Chicago’s Home Purchase Assistance Program
The City of Chicago offers funds for closing costs and a down payment for first time homebuyers in the Chicago area. The amount of assistance can range from $10,000 to $40,000 depending on the financial need. This program is for condominiums, town homes, single-family homes, or small apartment buildings. In order to be eligible for this program, homebuyers must:
  • Purchase a residential property.
  • Ensure that the HPA funds don’t exceed 25% or more of the home’s purchase price.
  • Not have debt that exceeds the 33% of the house’s monthly gross earnings.
  • Have a 3% down payment.
  • Occupy the property for the term.
In order to apply for this program, home buyers must be preapproved for a fixed rate mortgage and submit EDS forms as well as an application. Homebuyers must also complete homeownership counseling and provide proof of the training.

Statewide Grant and Assistance Programs

The Illinois Housing and Development Authority has several mortgage assistance options for first time home buyers to affordably finance a mortgage, including funding any necessary repairs. Low to moderate income borrowers can receive a cash grant of up to $5,000.

For financing homes in need of repairs, home buyers may receive up to $20,000 rehab funds in the form of a forgivable second loan. Participants will need to contribute at least $1,000 in out-of-pocket funds up front. Borrowers will be required to attend a first time home buyer counseling course.

user suit Lenders in: Chicago, Illinois.

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