re: Is anyone familiar with the Illinois Home Start Loan program, and participating lenders?
A follow-up to Al-info’s post…Al-info, here is what I would consider on the IHDA Down Payment Assistance (DPA) program:
FAQ: IHDA Home Start $8,000 Federal Tax Credit for First-Time Homebuyers
When must Home Start loans close by?
These must close on or before November 30th. There are no guarantees that the tax credit will be extended on a federal level nor are there any guarantees that IHDA would continue the program if the federal tax credit is extended.
What is the minimum down payment?
The combined Loan-to-Value can be 100%. The borrower must be able to document 1% of their own funds to qualify.
What loan(s) make up the Home Start program?
The first mortgage is an FHA 30 Year Fixed rate. The second mortgage provides up to $6,000 as a second mortgage.
Are there income or purchase price limits with this program?
There are two links from IHDA that might help:
Are there any limitations on property types?
This applies to existing 1-unit, single family homes, HUD approved condominiums, and townhomes. Ineligible property types include NO new construction and no condominiums that have pending litigation.
Where else can I learn more?
How does the Home Start program compare to other options?
The mortgage rate is going to be higher than the normal Chicago mortgage loan FHA interest rate. Right now, the spread is about .5%. That’s a pretty big spread. Here’s how I’m looking at this:
- For someone with access to a 3.5% gift from a family member, that is a better option that Home Start: You avoid the strings and hoops of the Home Start program and get a better mortgage interest rate. Buying now at low rates and low home prices seems like a good play if it is affordable.
- For someone without access to a 3.5% gift or down payment, this is a significantly better option than doing nothing. Let’s presume that it would take you 6 months to save up the full down payment. Mortgage rates would likely be .5% higher anyway and home prices are on the rise.
Home Start allows people to act now. With countless stocks that have jumped 800-900% (mortgage insurers, Fannie Mae, Freddie Mac, etc.), we’re seeing some investment in housing-related stocks. I don’t know when the housing market hit its low, but I know that the day that CNN reports that housing is recovered will be too late to buy a home at these current levels of affordability.
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$8000 Homebuyer Tax Credit – Looking Back
The end of the $8000 Homebuyer Tax Credit is getting closer
Only 148 shopping days until Christmas, only 60 shopping days left under the $8,000 First-Time Homebuyer Tax Credit. With that in mind, a few posts from my blog history.
The first one is funny. With all the changes in the homebuyer tax credit, you can’t blame anyone for being confused.
The latter, about the $8,000 Tax Credit up-front explains some general terms. We’ll be announcing some information about our participation with the IHDA $8,000 Tax Crediteither before the weekend or on Monday.
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$8000 Home Buyers Tax Credit: What We Currently Know – “It’s $15000. No wait, it’s $8000. Or is it $7500? It has to be paid back. No it doesn’t! Yes, it does! It’s only for first time home buyers. Nuh uh!” That’s about what the conversation sounds like if you are trying to figure out what …
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Using the $8000 First Time Homebuyers Tax Credit as a Down Payment … – I was going to write about the recent changes announced by the FHA that allow the $8000 first time homebuyers tax credit to be used to offset some costs in a home purchase (as opposed to waiting to get the $8K at tax refund time). …
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IHDA Adds $12 Million to Statewide MCC Pool
Illinois Housing Development Authority has added $12 million to the statewide mortgage credit certificate pool allocation effective July 7, 2009. This is from the Veterans’ program. This is only a portion of the Veterans’ allocation. The Veterans’ program is still active.
Program Highlights: The federal government allows each homeowner to claim an itemized income tax deduction for the amount of interest paid each year on a mortgage loan. The Mortgage Credit Certificate enhances this benefit. Homeowners with a MCC are allowed to use 20% of their annual mortgage interest as direct federal tax credit, resulting in a dollar for dollar reduction of their annual federal income tax liability. The remaining 80% of their annual mortgage interest will continue to qualify as an itemized tax deduction.
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IHDA to Lend on the $8,000 Tax Credit
The real estate web community has been buzzing following announcements at a federal level that would create vehicles to allow homebuyers to access the $8,000 Tax Credit as part of their closing.
Great news–In the next few weeks, the Illinois Housing Development Authority will be releasing the procedural details for making this possible. Early whispers are that they’ll leverage the same income limits as before and have some sort of limitation on the loan size.
As always, when this is official, we’ll be among the first to roll it out. We are a Full Eagle FHA lender which means we have the ability to directly approve an FHA Condominium Approval.
Related posts
Mortgage Rate Update – October 14, 2008
The financial markets have opened the week with a long-awaited rally. Stocks are surging; however, this money is coming out of Treasuries. So far, mortgage bonds are actually trading slightly higher by 3 basis points.
There’s been an interesting switch on the Federal Government’s $700 billion rescue plan and, frankly, it’s a good plan. The intent is to use $250 billion as a direct investment in the financial institutions. Investments appear to target Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Bank of New York. Early media reports also appear to be indicating that State Street Corp and Merrill Lynch will be receiving direct investments.
This should add stability and, although unthinkable just a year ago that the government would need to be buying into the banks, it does add a capital infusion.
Due to the lagging market for Mortgage Revenue Bonds, the IHDA program is temporarily suspended.
This is good news for mortgage rates that money is moving through the markets again.
IHDA – F.H.A. – Delayed
The Illinois Housing Development Authority’s FHA – Financing Homes Affordably program has been delayed; however, we are expecting it to launch during fall 2008.
Stay tuned on all the IHDA News in our site.
Mortgage Rate Update – September 23, 2008
Mortgage bonds are trading higher (meaning lower rates) today after a pretty brutal day yesterday. Oil and gold both had record rallies in place for much of the day. This was largely based on a weaker US Dollar due to $700 Billion bailout that will require a massive sale of US Treasuries to cover the checks the government is writing…
…which brings us to the big news of the day: Fed Chair Bernanke and Treasury Secretary Paulson are testifying to the Senate Banking committee today. The task before them is selling the plan that will take the mortgage backed securities and other illiquid assets off the lender’s books in exchange for more readily-marketable US Treasuries. This could be an interesting day.
Right now, rates are trending lower versus yesterday and have made up some of the gains. The new Access program is incredible. This is about the most aggressive lending product in the market right now. The IHDA loan still carries the grant and the City of Chicago program is ready for a big set of changes.
School’s back but the City of Chicago Teachers program never left. In this same vein, the other program, often called the City of Chicago Police mortgage program, is also a good program and open to most City of Chicago Public Safety workers.
If today’s testimony moves the markets, check back for an update and commentary this afternoon.
Mortgage Rate Update – September 22, 2008
It’s been a crazy couple of weeks. Two Mondays ago we were assessing the impact of the governmental intervention with Fannie Mae / Freddie Mac. Last Monday was the Lehman Brothers and Merrill Lynch news.
We went into the weekend with the potential that Morgan Stanley might be next to fall……but we actually have different news to break this Monday.
The Mitsubishi Financial Bank announced that it is purchasing somewhere between 10-20% of the institution. This is a leading indicator that the government may have stabilized the financial sector.
Adding the AIG bailout last week, the Fed has taken on some very inflationary expenses. The Dollar is getting sold off today, commodity prices are up, and mortgage rates are on the rise in the short-term.
Overall, these moves could lead to lower rates, but the short-term volatility should push rates up today and in the immediate future.
Oil has surged to $107 after hitting $91 last week. It could be volatile. When it is volatile, the IHDA loan can become a very competive rate.
Mortgage Rate Update – September 12, 2008
Mortgage bonds are trading lower, but off their worst levels of the day. This is sort of an interesting day. Inflation data is better than expected with Wholesale Prices dropping for the first time this year. Retail Sales were much lower than expected. Both of these items are traditionally good for mortgage rates.
Consumer Sentiment was better than expected, a sign that the economy and inflation is no longer wearing on consumers’ minds.
Nontheless, while this should lead to better mortgage rates in the mid-term, we’ve been talking about this short-term volatility in the Daily Updates.
Keep an eye peeled for opportunities to use the grant programs, specifically small windows of opportunity with the City of Chicago Mortgage Program and IHDA.