By Joseph Bayer, Sr.
Missouri and Illinois are truly a place of paradise for first-time buyers because of the unique programs implemented by these states to encourage people to buy homes.
In Missouri, the program is administered by Missouri Housing Development Commission (MHDC) and is called the First Place Loan. The Home Start program in Illinois is administered by the Illinois Housing Development Authority (IHDA). Both IHDA and MHDC offer tremendous assistance to their first-timer buyers. These buyers are required to put as little as 0.5% to 1% of their own funds toward home ownership—that’s it! The obvious question is, what about the rest? Read on!
Here is how it works; typically entry-level buyers are required to invest a minimum of 3.5% toward their down payment. For some, this blocks them from home ownership even if they have achieved a track record of good credit. However, with both the First Place and Head Start programs, the states provide buyers with an alternative downpayment source. This is achieved by making a direct 2nd mortgage (at ZERO percent interest) for the remainder of the down payment. Amazingly this 0% second mortgage loan is forgiven by both MHDC and IHDA after a predetermined period of time. This means qualified buyers need far less cash than typical borrowers.
For Example: On a $170,000 home, eligible MHDC buyers would need only $850 of their own money for a down payment. Illinois buyers need just $1,700 of their own funds to own a home. However, without the benefit of these programs, a first-time home buyer would need to have a minimum of $5,950 (3.50% of the sale price) for their down payment.
The Golden Question: Why isn’t everyone aware of this program? Because both IHDA and MHDC have limited budgets for advertising their programs. Both agencies rely upon lenders to “get the word out”. Unfortunately, most lenders are not authorized to offer the First Place and Home Start programs. Not surprisingly, many non-approved lenders direct clients away from the programs because they will lose the business if the buyer is informed about this program! Fortunately for our readers, First Integrity IS a Certified MHDC and IHDA lender, and is ready to assist first-time home buyers that you may very well know!
If you, or someone you know, could benefit from either of these amazing programs, encourage them to visit http://www.firstintegrity.com/ then click on the Special Financing button. You could open a whole new world for them.