City Offers New Grants for Homebuyers

Families and individuals will now get a shot at homeownership through a city initiative to support home buyers in neighborhoods across Chicago.

The Home Buyer Assistance Program will work with families and individuals by providing support for down payment and closing costs. Through the program, qualified buyers may receive a grant for up to 5 percent of the total loan amount based on income.

The program is intended to assist a broad range of families that include middle- and low-income households. Depending on whether they select an FHA-insured loan or a loan insured by Fannie Mae or Freddie Mac, home buyers can have annual incomes of up to 160 percent of the area median income – approximately $121,000.

The typical home in Chicago is sold for $250,000, meaning a family could receive a grant of more than $12,000 to help them cover their down payment and closing costs, the city said in a news release.

The Home Buyer Assistance Program program is open to families or individuals who are buying a home in Chicago. First-time buyers must complete a homebuyer education course. The program can be used to purchase a single-family homes, townhomes, condominiums and owner-occupied properties containing up to four units. It may also be used to refinance an existing mortgage.

The city will provide an initial $1 million to launch the Home Buyer Assistance Program, which will become self-sustaining over time. The program will be administered by the Chicago Infrastructure Trust, which will work in conjunction with authorized lending institutions responsible for accepting and processing applications, which will be accepted on a first-come, first-serve basis.

In the coming months, the city will work with aldermen and not-for-profit partners to conduct workshops across Chicago to provide interested residents with information about the program.

Ald. Matt O’Shea, (19th), a co-sponsor of the program in the Chicago City Council, wrote to constituents:

“Chicago’s housing market is recovering, particularly in the communities of Beverly, Morgan Park, and Mount Greenwood. First time homebuyer demand is up and average home prices remain affordable. Still, the lack of funds for downpayment and closing costs remains the single greatest obstacle to homeownership, especially among first time homebuyers and recent college graduates interested in our community.”

For a complete list of proposed program guidelines, visit the Chicago Infrastructure Trust.