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First Time Home Buyer in IllinoisIf you are looking to buy your 1st home, you've come to
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Today’s Rates for First Time Homebuyers in Illinois

Thursday, May 23, 2024

Mortgage rates are at 3.00% for the 30 year fixed loan program and at 2.56% 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.

Illinois First Time Home Buyer Checklist

  1. Weigh your loan program options. If you're moving to an approved area, you may be eligible for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. The content in the paragraphs below should give you an idea of where you may fall. 
  2. Get familiar with your credit score. Your credit should fall somewhere above 600, but few lenders accept scores in the high 500s. If your credit score needs a boost, work on improving it before you try to take out a mortgage. Once annually, you're able to request a free credit report from the three major credit bureaus.
  3. Shop interest rates from different lenders in your part of Illinois. Choose one who not only provides a great offer, but carries a high rating from the Better Business Bureau.
  4. Get pre-approved. Once you've picked a lender, provide income documentation with your last two pay stubs and tax returns from the past two years. 
  5. Map out a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford. 
  6. Begin home shopping. Refrain from making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your finances again before issuing your loan.  

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, an Illinois FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

  • Down payment: 3.5%
  • Minimum acceptable credit score: 580 (varies)
  • Mortgage insurance: Upfront (1.75% loan amount) and monthly
  • Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Illinois page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Illinois home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas like Chicago, Aurora, and Elgin are not eligible. 

  • Down payment: None required; financing up to 102% available depending on home appraisal
  • Minimum acceptable credit score: 620
  • Mortgage insurance: Upfront (2% loan amount) and monthly
  • Income maximums apply 

Illinois 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.

Major Cities in Illinois

Looking for programs specific to your part of Illinois? Lender411 has researched mortgage assistance programs for the top city in Illinois for first time homebuyers:

Click the links above to learn about down payment assistance programs, grants, and mortgage tax credits for the Chicago area. 

Local Cities

user suit Lenders in: Illinois.

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