When considering purchasing a home we’ve all heard how important it is to save for the down payment, but what is it?

the words down payment assistance etched into a cut out of a house

A down payment is money you pay to secure a large purchase like a home. The down payment is your first payment of the purchase, and represents your initial ownership stake.

In the home buying process most buyers apply for a mortgage to pay the purchase price. The amount you put down for a down payment helps the lender determine if you’re eligible for a mortgage and the interest rate for the loan.

A 20% down payment is the standard guideline in order to secure approval for a mortgage and a good interest rate. A 20% down payment will also help you avoid the need for mortgage insurance.

Even without a 20% down payment, homebuyers have many other options available. There are a variety of different types of mortgages available that allow for considerably lower down payment percentages.

Illinois Down Payment Programs Available for Home Buyers

Click any program below to learn more about it.

IHDA Mortgage

The Illinois Housing Development Authority (IHDA) offers a variety of mortgage and up to $10,000 in down payment assistance products for Illinois homebuyers who meet income and other program guidelines.

Finally Home

This Illinois State Treasurer’s Office program helps Illinois residents who might not qualify for a conventional loan purchase or refinance a home. Finally Home guarantees up to 10 percent of a qualifying loan.

National Programs Available for Illinois Home Buyers

Click any program below to learn more about it.

FHA Loans

Backed by the Federal Housing Administration require as little as a 3.5% down payment.

Home Possible Mortgage

Offered by Freddie Mac for very low to low-income borrowers, first time homeowners, move up borrowers and retirees with a 3% down payment.

HomeReady Mortgage

Offered by Fanny Mae for low-income buyers requires a 3% down payment.

HomeOne Mortgage

Freddie Mac’s 3% down payment solution for first-time homebuyers.

USDA Guaranteed and Direct Loans

US Department of Agriculture (USDA) assists low and moderate-income buyers in rural and suburban areas.

With knowledge of mortgage assistance programs and a price range in mind, it’s time to start saving for a down payment.

While it may seem difficult to save for a 20% down payment it’s important to set goals and cut expenses where possible. Some solutions include cooking more at home, making your own coffee in the morning, entertaining friends at home instead of at a restaurant or bar, delay big travel plans until after you’ve closed on your new home. Many prospective homebuyers will have roommates to help save on housing costs. In the era of cord cutting, reconsider some of those subscription services.

We’ve all heard that even saving pennies a day can make a big impact, but that’s because it’s true. If you buy a $3 cup of coffee every morning before work that’s about $780 a year! Every dollar makes a big savings impact.

While saving it’s also important to remember why home ownership is the goal. Once the down payment is made, the mortgage approved, and the keys are in hand you have ownership and are building equity in your home.