Illinois Homebuyers Get a Boost with Down Payment Plus Programs

The Federal Home Loan Bank (FHLB) of Chicago is committed to assisting very low-, low-, and moderate-income homebuyers in making their homeownership dreams a reality through their Downpayment Plus Programs. These programs are designed to ease the financial burden of upfront costs associated with purchasing a home.

Available Assistance: The Downpayment Plus (DPP) program operates on a 3:1 matching ratio, with a cap at $6,000 or 25 percent of the first mortgage. This means that for every dollar the homebuyer contributes, the program provides three dollars in assistance. For instance, if a homebuyer invests the minimum required contribution of $1,000, they will receive a DPP grant of $3,000. However, if the applicant contributes $2,000 or more, they become eligible for the maximum grant of $6,000. This assistance is provided in the form of a forgivable grant, which can be applied toward down payment and closing costs, homebuyer counseling expenses (up to $700), and eligible rehabilitation costs related to the home purchase.

The Downpayment Plus Advantage Program functions similarly but is tailored to borrowers participating in mortgage programs with non-profit organizations. To access subsidies offered in the DPP Advantage program, non-profits must be registered as partners with FHLB Chicago. Unlike DPP, the Advantage program is exempt from the 3:1 matching ratio but retains the maximum grant amount of $6,000 or 25 percent of the first mortgage.

*It’s important to note that recipients of assistance funds from either program are obligated to repay a pro-rata share of the grant if they decide to sell or refinance the property before the end of the 5-year retention period.

Eligibility Requirements: To be considered for the Downpayment Plus Program, all applicants must meet specific criteria. They must secure a first mortgage through a participating member and provide a signed purchase contract. Additionally, applicants’ annual household income must not exceed 80 percent of the area median income, adjusted for household size. It is essential for applicants to disclose their current sources of income and any anticipated changes in income or employment status. In addition to the minimum $1,000 contribution, all applicants are required to complete a homebuyer counseling program before receiving grant funds.

Property Guidelines: All homes purchased under these programs must be the primary residence of the applicants. Eligible property types include attached or detached one- or two-unit homes, condominiums, and manufactured homes. For new construction properties, they must be completed before the closing of the home purchase.

The Federal Home Loan Bank of Chicago’s Downpayment Plus Programs are dedicated to helping individuals and families with limited income achieve homeownership while making the process more affordable and accessible.