Mortgage News June 21, 2023
Illinois has launched a new program to assist over 1,500 low- and moderate-income homebuyers in purchasing a new home. The program involves providing a second mortgage to these buyers, which does not require any payments while the first mortgage is still active.
The program, known as Illinois HFA1, is being administered by the Illinois Housing Development Authority, as announced by Governor JB Pritzker. The aim of the program is to address the challenge of saving enough money for a down payment, which has become increasingly difficult due to rising home values, interest rates, and other financial responsibilities such as supporting a family.
Under this program, eligible buyers can receive second mortgages of up to $10,000 each, which can be used towards the down payment and closing costs. The housing authority will also provide a fixed-rate first mortgage, suggesting that the funding for the second lien comes from profits in the secondary market.
The second mortgages are interest-free and come with a 30-year payment deferral. This means that borrowers are not required to repay the funds until they sell the home, refinance, or pay off their first mortgage.
Governor Pritzker emphasized the importance of every individual, family, and senior in Illinois having a stable and safe home, stating this in the official news release.
Illinois HFA1 is a new program administered by the Illinois Housing Development Authority, offering over 1,500 low- and moderate-income homebuyers in Illinois a second mortgage without payments while their first mortgage is active. The program provides down payment assistance of up to $10,000 per buyer, which can be used for down payment and closing costs. The interest-free second mortgages have a 30-year payment deferral, becoming due when the borrower sells the home, refinances, or pays off their first mortgage. Governor JB Pritzker emphasized the importance of stable and safe housing for all residents in Illinois.
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