Newsflash! A Bridge to the American Dream: SmartBuy Program Provides First-Time Homebuyers Loan Forgiveness

Authors: Audrey E. Gamble, Esquire & John W. Campbell, Jr., Esquire

At a time when interest rates are historically low, Illinois seeks to make the “American Dream” a reality for more Illinois residents by relieving some of the challenges and barriers that have historically prevented certain communities from owning a home. Illinois Treasurer Michael Frerichs reported that 17% of Illinois residents carry student loan debt with an average debt of $29,855. This student debt is often a barrier that prevents young adults from saving enough for a down payment and may discourage potential homebuyers from undertaking the financial commitment of a mortgage while balancing student loan payments with other expenses.

To combat this trend, Illinois has instituted its SmartBuy program, which provides $25 million in student loan relief for eligible first-time homebuyers. The SmartBuy program will pay off up to $40,000 of an applicant’s student loan debt, or 15% of the purchase price of the home, whichever is lower, and provide a $5,000 loan toward a down payment or closing costs. Applicants must have an individual annual income limit of $109,000, a minimum credit score of 640, and must be able to pay off the full balance of their student loans upon closing. Additionally, new homeowners must reside in the home for three years to avoid repayment obligations.

The SmartBuy program was launched simultaneously with the IHDA Mortgage Opening Doors program, which is designed to increase home purchase accessibility for low- and moderate-income qualified homebuyers across Illinois. IHDA will provide a 30-year 1st mortgage with a fixed interest rate and $6,000 in down payment and/or closing cost assistance. The down payment assistance is forgiven after five years.

The two programs are intended to boost the economy by making access to homeownership more equitable and available to those that have historically faced disproportionately higher financial barriers to homeownership.

CONTACT:

Andrew J. Annes, Esquire
aannes@satclaw.com
Mobile: (312) 246-3110

John W. Campbell, Jr., Esquire
jcampbell@satclaw.com
Direct: (312) 554-3126

Websites:
https://satclaw.com/
https://www.satcsolutions.com/
https://www.BridgingChicago.com