IHDA Access Forgivable Mortgage Program

With over 2000 down payment assistance (DPA) programs available, choosing an assistance program for which you qualify and which best suits your needs becomes difficult. For first-time and repeat homebuyers, the constant worry is securing assistance to reduce costs dedicated towards down payment and mortgage without having to repay the amount in double with the burden of interest.

The Illinois Housing Development Authority keeps the homebuyers’ concern at its focus with the IHDA Access Forgivable Mortgage scheme that provides forgivable loan assistance to both first-time and repeat homeowners.

With this blog, we’ll explain the key features, benefits, and step-by-step process to apply for the IHDA Access Forgivable Mortgage scheme alongside important things to keep in mind to secure a loan that is forgiven over time so you can secure your dream home.

IHDA Access Forgivable Mortgage Program Explained

The Illinois Housing Development Authority (IHDA) provides an Access Forgivable Mortgage plan that provides assistance on down payment and closing costs without interest that does not need to be repaid monthly. Instead, with this scheme, your loan is forgiven over the period of 10 years, provided that you meet certain conditions.

What the IHDA Forgivable Mortgage scheme does is make homebuying for Illinois residents easier, affordable, and reliable with assistance that has a basic eligibility criterion, can be combined with other loan options, and is available for both first-time and repeat home buyers.

Key Elements and Features of the Program

• Receive 4% of the purchase price up to $6000 in assistance for mortgage, down payment, and closing costs.
• The loan amount is gradually forgiven monthly over the period of 10 years.
• Fixed-rate mortgage for a 30-year period with an affordable interest rate.
• Can be clubbed with all mortgage types like FHA, VA, USDA, and more.

Eligibility and Qualifications for the Mortgage Program

• Available for all first-time and repeat homebuyers in Illinois.
• Minimum credit score of 640+.
• The home should be a primary residence within 60 days of closing.
• A debt-to-income ratio of 50% or lower.
• Contribution of either 1% of the sale price or $1000 (on the basis of which is the greater amount) towards the final transaction.
• The borrower should fall within the income and purchase price limits.
• Complete a homeownership counselling and education program before closing.

Step-wise Guide to Applying for the IHDA Access Forgivable Program

• Choose an IHDA-approved lender who can process the application. The list of approved and participating lenders is available on the IHDA website.
• Get pre-qualified for the mortgage after an assessment of your credit score, debt-to-income ratio, wage amount, and other eligibility requirements.
• Submit all income, property-related, and financial documents for the approval process.
• The final stage involves approval of the forgivable loan and closing procedures.

Key Benefits and Outcomes of the Program

• Reduces upfront costs by contributing to down payment and closing costs.
• Can be combined with FHA, VA, and USDA loans for more benefits.
• Interest-free loans that are gradually forgiven over a 10-year period.

Pro Tip: Limitations and What to Keep in Mind

• Be sure to remain in the primary household for the 10-year duration.
• If you plan on selling or refinancing before the time period, you’ll have to make a partial repayment of the loan.
• Income limits vary from county to county; check the requisites before making a decision.
• Keep all income, finance and residential documents in hand for easier processing.
• Must process the scheme application only through an IHDA approved lender.

Alternatives to the Access Forgivable Mortgage Program

If you feel that the IHDA Access Forgivable Mortgage Program limits your possibilities for receiving the best assistance, there are other options available under the Illinois Housing Development Authority:

• IHDA Access Repayable Mortgage: Offers 10% assistance up to $10,000 that is repaid monthly over a 10-year period.
• IHDA Access Deferred Mortgage: Offers 5% assistance up to $7500 that does not need to be repaid until you sell or refinance your house.
• Local residential authority or NGO assistance programs

FAQs

What does ‘forgivable’ mortgage program mean?

A ‘forgivable’ mortgage program translates to cost assistance during down payment or closing amount that need not be repaid if certain program-specific conditions are met. Under this scheme, the balance of the loan is partially or totally forgiven under certain eligibility requirements.

Are monthly payments on the forgivable loan required?

Under this scheme monthly payments on the forgivable amount are not required. This program functions as a 0% interest and no-monthly payment mortgage that is gradually forgiven over the period of 10 years, given that certain eligibility conditions are fulfilled.

What if I shift houses or refinance before the time period?

In case you decide to shift residences or refinance before the completion of the 10-year time period, you will have to repay the remainder of the loan amount that has not yet been forgiven. It is highly advised to read all documents and terms and conditions of the mortgage program for the best knowledge.

Can the IHDA Access Forgivable Program be combined with FHA loans?

Yes, absolutely! One of the key benefits that the IHDA Access Forgivable Mortgage initiative is that it can be combined with additional primary first mortgage loans like FHA, VA, or even USDA loans so you can get the best assistance for your homebuying purchase. Choose an IHDA-approved lender so you can reap the highest program benefits and choose the best combination.

Choose a Loan That Feels Like A Gift Not a Burden

What the IHDA Access Forgivable Mortgage scheme does is make your loan assistance a Gift and not a burden. By removing the need to repay your assistance monthly, the IHDA makes homeowning affordable with up to $6000 help towards a down payment that is forgiven over a 10-year period.

Choose an IHDA-approved lender today and move one step closer to homeownership.