FHA working with 1st-time buyers
Recent policy changes in Federal Housing Authority (FHA) loans and new Illinois first-time home buyer loan programs are making it easier for Illinois home buyers to fulfill the dream of homeownership.
Homeowners who tapped risky sub-prime mortgage financing for their purchase may be eligible to refinance with FHA insurance if they are falling behind in their mortgage payments. Announced Aug. 31, the federal mortgage insurer FHA is allowing eligible homeowners the new "FHASecure" option if they meet the following five criteria:
• A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset.
• Interest rates must have or will reset between June 2005 and December 2009.
• Three percent cash or equity in the home.
• A sustained history of employment
• Sufficient income to make the mortgage payment.
"Realtors® have been advocating for FHA reforms since early 2007," said Rozanne Kurman, president of the Realtor Association of NorthWest Chicagoland. "FHASecure can help many more families in jeopardy of losing their home and Realtors will continue to push for more FHA reforms such as increasing FHA loan limits."
There are a variety of mortgage assistance programs specific to Illinois that can help first-time borrowers take that first step up the homeownership ladder. Recently, the Illinois Department of Human Services announced its new Assets Illinois Homeownership Project, a $1.7 million grant program designed to create 850 first-time homeowners annually throughout the state.
Families or individuals participating in Assets Illinois qualify for a state-sponsored matched savings program using Individual Development Accounts. These small savings accounts allow participants to save up to $2,000 and receive up to $2,000 in matching funds to be used toward the purchase of a new home. The Illinois Association of Realtors Partnership for Home Ownership foundation, was the co-applicant for the federal funds and, as a HUD-certified counselor, will provide the credit counseling aspect of the program.
In addition, the Illinois Housing Development Authority (IHDA) recently announced the expansion of its I-Loan Mortgage program to 40-year loans with a fixed, below-market interest rate for first-time home buyers. Some 30-year I-Loan Mortgage participants may also be eligible for cash grants up to $1,500 to meet down payment and closing costs.
"Consumers today have options when it comes to finding a home loan and they should take the time to carefully search for a loan that matches their special circumstances," said Rozanne Kurman. "The Illinois Association of Realtors has mortgage resources for consumers and potential home buyers available at www.illinoisrealtor.org. Click on Consumer Info where you can find information on loan programs and real estate financing."
First-time home buyers in Illinois may qualify for low-cost loans through the Partnership for HomeOwnership's existing Rural Initiative, Quincy Initiative and HomePower Mortgage Assistance programs. Learn more at www.pfho.org.