Illinois Home Start Loan Program
Illinois has introduced a new program to ramp up sluggish home sales. It is called the Illinois Home Start Loan Program.
This program is designed specifically for first time home buyers. The Illinois Home Start Loan Program allows first time home buyers the opportunity to use the government $8000 tax credit (American Recovery and Reinvestment Act) and ads a twist to it. The twist is that first time homebuyers can now use up to $6000 or 3.5% of the home purchase price (whichever is greater) to use as the down payment in purchasing a home. For some first timers, this may mean that they need no money to be brought to the closing table in the form of a down payment.
The Specifics: What the Illinois Home Start Loan Program comes down to is that it offers 2 loans.
1. 30 Year Fixed Rate Loan
This loan is insured by the Federal Housing Administration (FHA) and serviced by U.S. Bank Home Mortgage.
2. Tax Credit Advance Loan
This loan allows first time home buyers in Illinois the opportunity to get a short term loan to use as the down payment towards the purchase of their home.
After the first time home buyer purchases their home, they will file a return with the IRS (or an amended return) to pay back the Tax Credit Advance Loan. If the loan is not paid back in its entirety by June 30, 2010, the remaining loan amount will become a 10 year loan at .5% above the 30 Year Fixed Rate Loan.
There are some qualifications which must be met in order to receive both the 30 Year Fixed Rate Loan (can be obtained by itself) as well as the Tax Credit Advance Loan. For instance, the property must be a one unit single family first time home buyer must have a minimum FICO credit score of 660. The buyer must also occupy the property within 60 days after closing and remain in the property for the life of the loan. The buyer must close on or before November 30, 2009.
All in all the Illinois Home Start Loan Program looks to be just what the Illinois real estate market needs at this time to ramp up existing property home sales.