First-Time Buyers

November 9, 2023

First Time Buyer Loans in Greater Chicago

First Time Buyer Loans in Greater Chicago

So, you’re considering taking the plunge into the world of homeownership in the Windy City? Even though our sports teams are taking it on the chin these days, real estate in Chicago is still a great investment and beats the heck out of renting. Here are some first-time home buyer financing ideas to help make your first purchase more affordable. 

Chicago Bear Down Payment Assistance and Grants

Illinois and Chicago have a stash of cash waiting for you. These programs offer down payment assistance (DPA) and great interest rates. Usually, there are income limits associated with these programs. Down payment assistance can range from $6,000 to $10,000 and, depending on the program, can either be forgiven or repaid over 10 years at a zero percent rate. Not too shabby! 

Aunt Fannie and Uncle Freddie 3% Down Programs 

No, they are not actual relatives. Fannie Mae and Freddie Mac offer first time buyer loans called Home Ready and Home Possible respectively. These programs offer a super low down payment at only 3% and offer better interest rates than you would get if you are not a first time buyer. Like the DPA programs listed above, these first-time buyer loans also have income limits.  

Good Old FHA Loans 

FHA is the OG when it comes to first time buyer loans. FHA allows for a low down payment of only 3.5% and has very flexible qualifying terms allowing for slightly higher debt-to-income ratios and slightly lower credit scores. If you happen to have a score under 700, an FHA first time buyer loan will often provide a lower payment than conventional, as FHA mortgage insurance rates are fixed, typically at .55%.  

Zero Down VA Loans for our Military Veterans 

As it should be, the VA loan is the best loan on the market for eligible veterans, whether they are first time buyers or not. A VA loan does not require a down payment and does not require monthly mortgage insurance, just an upfront funding fee that can be financed so it does not require cash out of pocket. 

In the end, Chicago’s first-time homebuyer programs are like the city itself—vibrant, diverse, and takes a very long time to explore. For that reason, it is critical to connect with a knowledgeable mortgage banker to help you navigate this awesome, but still complicated, process to help you take the plunge!

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