Want to jump straight to the answer? The best mortgage lender for most people is definitely Rocket Mortgage® by Quicken Loans®.
When you become a first-time home buyer, you know a lot of planning, saving and calculations go into making a buying decision. If money’s tight, why not tap into financial assistance through Illinois’ housing development authority and several mortgage lenders in the Prairie State? Let’s dig deeper so you can turn your dreams into reality.
Best First Time Home Buyer Programs:
- Down Payment Assistance Program
- Home Buyer Assistance Program
- Wintrust Community Bank Home Buyer Grant Program
- Kane County First Time Home Buyer Loan Program
- Madison County HOMEBuyer Program
Best National First Time Home Buyer Lenders:
- Best for FHA Loans: Rocket Mortgage by Quicken Loans
- Best for VA Loans: Veterans United
- Best for USDA Loans: New American Funding
First Time Home Buyer Programs in Illinois
Choosing from a big pool of online mortgage options doesn’t have to be overwhelming. Here’s a list of Benzinga’s top 5 first time home buyer programs in Illinois.
1. Down Payment Assistance Program
Funded by the U.S. Department of Housing and Urban Development (HUD), Illinois’ Down Payment Assistance Program helps with down payment and closing costs up to $3,000. This is a first-come, first-serve, need-based program. You don’t have to be a first time home buyer to apply. The grant amount can be used for escrow payments, lending institution fees, contributions, filing and recording fees. First, the grant is approved and the grant amount, which lasts for 5 years, is given. The 20% grant amount is forgiven each year as long as the qualified homeowner occupies the property.
- Purchase an owner-occupied home.
- The house-to-income ratio must not be more than 30%.
- Have a minimum of $1,000 after paying down payment closing costs.
- Your debt-to-income ratio must not exceed 37%.
2. Home Buyer Assistance Program
You can take advantage of $14,999 down payment assistance through this program if you live in Rockford, Illinois. There’s a limit to property prices and you’re also subject to income limits.
- Have less than $50,000 in assets like deposit accounts, life insurance, bonds and stocks.
- Agree to pay $250 toward the cost of purchasing a home.
- Complete a HUD pre-purchase housing counseling class.
- Have substantial cash reserves post-purchase to cover 1 month of housing expenses.
- You should not have any unpaid judgments, liens and no bankruptcy discharged within the last 2 years.
3. Wintrust Community Bank Home Buyer Grant Program
Available to only first-time home buyers, the Wintrust Community Bank Homebuyer Grant Program offers a $2,000 grant through nonprofit partners. This program can be paired with local grants, loans, federal and state programs. This amount is granted if you are looking for a house in Cook, DuPage, McHenry, Will, Kane and Lake counties and is applicable only to buyers of 1- or 2-unit properties.
- Annual household income must be at or below 80% of the HUD median of the county where the property is located.
- Agree to pay $1,000 toward the cost of purchasing a home.
- Complete a HUD-approved homebuyer program.
- Apply for a 5-year loan term on adjustable-rate mortgages.
- Agree to a minimum 5 years’ lock period of an initial interest rate.
4. Kane County First Time Home Buyer Loan Program
Under this program, first time home buyers can get up to $10,000 for down payment or closing costs in the form of deferred-payment, zero-interest loans. You can choose to work with the mortgage lender of your choice.
- Live or work full time in the Kane-Elgin County area.
- Contribute at least 1% toward the down payment of your home.
- Complete a home buyer education course.
- The property must pass a lead-based paint inspection and general inspection to fulfill quality standards.
- The loan must be repaid when the property is sold or the title is transferred or when you’re no longer holding it as the primary residence.
5. Madison County HOMEBuyer Program
This program offers a 5-year forgivable loan for up to $5,000. You must have a total household income that does not exceed 80% of area median income. The loan amount can be used for a down payment or closing costs and you can use it on newly constructed or existing properties occupied as your primary residence in Madison County.
- Meet income guidelines.
- Have 2 years of steady income, 1 year of good median credit score (a minimum of 620).
- Get pre-purchase counseling from a HUD-certified agency.
- Occupy the property for at least 5 full years.
- Invest $1,000 toward the purchase of the home.
Best National First Time Home Buyer Lenders & Loans
You might prefer to scan the national first time home buyer programs in Illinois if you’re aiming for a grant that’s not county-specific. Here’s a list of the top 3 names in the industry that will help you make an uncompromised decision.
Created as a response to defaults and foreclosures of the 1930s, FHA loans provide affordable, accessible loans to home buyers and secure insurance to mortgage lenders. This program offers loans if you have a low credit score or lower down payment.
- You must have employment history or work for the same employer for the last 2 years.
- Agree to purchase non-cancellable mortgage insurance.
- Pay a 10% down payment for a credit score between 500-579, 3.5% down payment for a credit score of 580 or higher.
- The borrower must be a legal resident of the U.S. and must have a valid Social Security number.
Best National FHA Lender: Rocket Mortgage by Quicken Loans
Rocket Mortgage, an online mortgage experience developed by Quicken Loans, is undoubtedly the most popular and reliable national FHA lender. You can work at your own pace and within your budget.
Available to military service personnel, veterans and surviving spouses, VA loans guarantee mortgages by the U.S. Department of Veteran Affairs. VA loans offer a plethora of benefits including no down payment, no monthly PMI, competitive interest rates, VA assistance to solve any issues during the process of purchase and property appraisal on your behalf.
- You must be an eligible veteran with recorded service.
- Your debt-to-income ratio should be 41% or lower, depending on several factors.
- You must pose a satisfactory credit risk.
- Stable income record to handle the mortgage payment and necessities.
- Credit score of 620 or higher.
Best National VA Lender: Veterans United
Veterans United offers a customer satisfaction rating of 4.7 out of 5. Veterans United secures comfortable homes for those who served. Looking for someone to back you from start to finish throughout the process of buying a house? Trust extremely knowledgeable and experienced professionals and over 100,000 reviews by veterans who chose Veterans United!
USDA loans are a great initiative by the U.S. Department of Agriculture to provide a home to low-income applicants at 0% down. You’ll get a subsidy and receive a reduced mortgage payment for a short time. You can only get this loan in rural areas.
- You must have a 640 minimum credit score.
- The home you want to buy or refinance must be in an eligible rural or suburban area. Find out whether your property is eligible.
- You must have a household income under the limit set by the USDA for the area where you want to buy a home. Check your income eligibility with the USDA.
Best National USDA Lender: New American Funding
Backed by a cohesive team and a servicing portfolio of over 126,000 loans for $31 billion, New American Funding has a proven track record of closing loans fast. People with weaker credit can get financial assistance with a minimum down payment. New American Funding ensures that you have as much access to funding as anyone else, even if you have an unconventional credit history.
Find the Best First Home Buyer Program
Before you finalize your decision to connect with a money lender to buy your first home in Illinois, connect with a few lenders and explore all the possibilities. Check the online customer reviews (and the complaints), loan types and loan products offered, mortgage rate information, down payment requirements, credit score requirements and more.
Get Ready for Take Off
Rocket Mortgage® is an online mortgage experience developed by Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.
You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.