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DuPage County, IL - First Time Home Buyer

First Time Home Buyer Mortgages
Down Payment Assistance Programs

DuPage County, IL – First Time Home Buyer Programs

Are you a first time home buyer looking to purchase a home in DuPage County, Illinois?  On this page you can learn about some of the different types of mortgage programs that are available to first time home buyers in Illinois.  You may also view down payment assistance programs that are currently being offered in Illinois.

DuPage County, IL – First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2020 conforming loan limits for DuPage County, IL (or any other county) using this conforming loan limit lookup tool.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
  • Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and people with a variety of credit issues (such as low credit scores or a recent bankruptcy).  Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the mortgage options that are available to first time home buyers. 

Would You Like to Get Pre-Approved for a Mortgage?
Click Here to Get Pre-Approved for a Home Loan

Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Illinois.  You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.

DuPage County, IL – Down Payment Assistance Programs

First time home buyers in DuPage County may be eligible to receive down payment assistance.  This includes programs that are offered throughout the entire state of Illinois, as well as a program offered exclusively in DuPage County.  You can learn more about the program offered in DuPage below.

DuPage Homestead Program

The DuPage Homeownership Center, known as the DHOC, initiated the DuPage Homestead Program.  This offers a down payment assistance program for first time home buyers.  It is only available for homes located within DuPage County, excluding Aurora and Bolingbrook.

Requirements:

  • Attend a homebuyer education course.  The DHOC is a HUD approved housing counseling agency.  This class costs $40.  There is also a $400 administration fee (paid to DHOC), but that is only due if you receive the assistance and close on your home purchase.  So the $400 fee is dismal in comparison to the down payment assistance and opportunity to be a homeowner.
  • Have a minimum of a 660 credit score.  If you do not have this score, the counseling may assist you in improving it.
  • Have at least one mortgage payment in reserves.  This means that you have in savings enough to cover an extra mortgage payment.  This helps ensure that you have a little bit of breathing room in the case of a job or income loss.  To provide an example, if your mortgage payment were to be $900, you would need to show you have $900 in savings.
  • You must contribute at least $1,000 towards the down payment or closing costs.
  • The maximum sales price of a home that is allowed is $214,000.
  • Only single family residences are allowed.  This can be your typical detached home, a condo, townhouse, or one side of a duplex.
  • If you have previously had a bankruptcy, you must be at least 2 years out of it.  Also, the DHOC requires 24 months of established credit since declaring bankruptcy.  This could mean new tradelines, such as auto loans, credit cards, or other types of reported credit.

A wonderful aspect of the DuPage Homestead Program is that the DHOC will start working with you even if you do not qualify at this time.  They created the Gateway to Homeownership Orientation, which will start helping you take care of issues that could prevent you from owning your own home or receiving assistance.  For instance, if ear credit score is too low, you do not have the minimum $1,000 (or 1% of the sales price) to contribute, or some other disqualifying factor.  You can enroll in the homeownership counseling and start moving towards your future goal of homeownership.

You can learn more about this program on the H.O.M.E. DuPage, Inc website.

Are You Eligible for Down Payment Assistance?

A mortgage specialist can help you check your eligibility for down payment assistance.  If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form.  We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Illinois.

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