What is the Illinois SmartBuy Program?
The Illinois SmartBuy Program assists eligible homebuyers in Illinois by providing up to $40,000 in student loan repayment and an additional $5,000 for down payment and closing cost assistance. This initiative aims to alleviate student debt burdens, facilitating the path to homeownership.
Who is eligible for the SmartBuy Program?
Both first-time and repeat homebuyers purchasing a primary residence in Illinois are eligible. Applicants must have at least $1,000 in student loan debt and meet specific income and purchase price limits, which vary by county and household size.
How does the student loan repayment assistance work?
The program offers up to $40,000 or a maximum of 15% of the home's purchase price (whichever is lower) to pay off existing student loans. To qualify, the entire outstanding student loan balance must be paid in full at the time of home purchase; partial payments are not permitted.
What is the structure of the down payment assistance?
In addition to student loan repayment, SmartBuy provides $5,000 in assistance for down payment and closing costs. This assistance is offered as a deferred loan, which is forgiven after three years, provided the homeowner does not sell or refinance the property within that period.
Are there specific property types eligible under the SmartBuy Program?
Eligible properties include single-family homes, townhouses, condominiums, and certain manufactured homes, provided they will serve as the borrower's primary residence.
Is homebuyer education required for the SmartBuy Program?
Yes, all borrowers are required to complete a homeownership counseling course, which can be taken online or in person, to ensure they are well-prepared for the responsibilities of homeownership.
Are there income and purchase price limits for the SmartBuy Program?
Yes, both income and purchase price limits apply and vary by county and household size. These limits are designed to assist low- to moderate-income families in achieving homeownership.
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Get Started NowWhat happens if I sell or refinance my home before the three-year forgiveness period ends?
If the property is sold or refinanced before the three-year period concludes, the remaining unforgiven portion of the down payment assistance must be repaid at the time of sale or refinancing.
Can the SmartBuy assistance be used with different types of mortgage loans?
Yes, the program can be paired with various mortgage loan types, including FHA, VA, USDA, and conventional loans, offering flexibility to suit different borrower needs.
Is there a minimum credit score requirement for the SmartBuy Program?
Yes, applicants must have a minimum credit score of 640 to qualify for the program, ensuring borrowers have a satisfactory credit history.
Are there specific debt-to-income (DTI) ratio requirements for the SmartBuy Program?
Yes, DTI ratio requirements are established to ensure borrowers can comfortably manage their mortgage payments. These ratios may vary based on individual circumstances and should be discussed with your lender.
Is mortgage insurance required when using the SmartBuy Program?
Mortgage insurance requirements depend on the type of first mortgage loan selected. For instance, conventional loans with less than a 20% down payment typically require private mortgage insurance (PMI).
How do I apply for the SmartBuy Program?
To apply, you need to work with a participating lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.
Are there occupancy requirements for the SmartBuy Program?
Yes, the property purchased must be occupied as the borrower's primary residence throughout the three-year forgiveness period.
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Get Started NowCan the SmartBuy assistance be used for new construction homes?
Yes, the assistance can be applied to both newly constructed and existing homes, provided all other program criteria are met.
Is there a prepayment penalty for the SmartBuy loan?
No, there is no prepayment penalty. However, if you sell or refinance the home before the three-year forgiveness period ends, the remaining unforgiven portion of the down payment assistance must be repaid.
What documentation is required to apply for the SmartBuy Program?
Applicants will need to provide proof of income, employment, credit history, student loan statements, and completion of the required homeownership counseling course, among other standard loan application documents.
Is the SmartBuy Program available statewide?
Yes, the program is available throughout Illinois, but income and purchase price limits vary by location.
Can I combine the SmartBuy assistance with other down payment assistance programs?
Combining the SmartBuy assistance with other programs may be possible, subject to specific program guidelines and approval. It's advisable to consult with your lender to explore available options.
What if my student loan debt exceeds $40,000?
If your student loan debt exceeds $40,000, you must pay off the remaining balance at closing, as the program requires full repayment of the student loan debt to qualify.