Using First Time Home Owner Grants?

[Ryan O.]

Hi I recently came across some local programs in the Chicago area (Chicago Home Assistance Program) that offers a grant for up to 7% of the loan value so I was just curious to know if anyone has used any government sponsored programs like this to buy an investment property. If anyone has any experience with this I’d love to hear about it. Thanks!

[Michael Facchini]

We have a Chicago, Cook County, and IL (IHDA) program.  City and County have no geographic restrictions within those boundaries, but if within Chicago limits you cannot participate in the Cook County program - must go Chicago.  The two are very similar.  City allows a grant up to as much as 7% (subject to the market) of the loan amount, and County up to as much as 8%.  However, most often we see these DPA grants between 3% and 5% of the loan amount, and the higher you go the worse the rate....thus, it costs you in the long-run.  Income limit is $131,775, buyer must put at least $1k of their own funds down, and these only allow primary residences (but do not need to be a 1st-time buyer).  IHDA (Illinois Program) has a few options, but most popular DPA program provides a grant up to 5% of the purchase price ($7,500 cap).  Income limits are capped between $88,920 and $94,800 (depending on County), and IHDA  only allows up to 2units whereas Chicago & Cook allow up to 4units.  In general, rate pricing on IHDA is more competitive, typically by .25% to .50%.  However the Cook County program has been improving in recent months, and Chicago is supposed to be working on theirs.  We'll see.  Hope this helps!