Illinois Offers Tax Credit Advances To First-Time Buyers

time home buyers in Illinois now have an opportunity to take advantage of current low interest rates and decreasing home prices under a new program offered by the Illinois Housing Development Authority (IHDA). The Illinois Home Start Loan Program will provide first-time buyers 30-year fixed-rate loans and advance loans on the federal tax credit created by the American Recovery and Reinvestment Act of 2009. Earlier this month, Massachusetts announced a similar [link=http://www.mortgageorb.com/e107_plugins/content/content_lt.php?content.3883][u]program[/u][/link] that provides advances on the tax credit. Before IHDA's Home Start Advance Loan, Illinois families could only access this credit next year after filing their tax returns with the IRS. Only those home buyers who qualify for an Illinois Home Start Loan can receive the Home Start Advance Loan. Illinois residents who qualify will receive a zero-interest loan for up to 3.5% (or up to $6,000) of the home purchase price to put toward the down payment. "By combining the federally insured loan with the anticipated federal tax credit toward their home purchase, home buyers can qualify for a lower interest rate," says IHDA Executive Director DeShana L. Forney. "Home Start also will help stabilize neighborhoods by stimulating home sales across the state." In addition to the tax credit down payment assistance, the home buyer must contribute at least 1% toward the purchase price. To qualify for the Home Start loan, home buyers must complete education offered by HUD-certified counselors. Home purchases and mortgage loans must close on or before Nov. 30. Veterans and active duty service personnel don't need to be first-time home buyers to qualify, the department adds. A $300 application fee must be paid at closing. The tax advance loan may be used, and if a loan is repaid in full by June 30, 2010, $100 will be refunded. The tax advance loan, if not repaid in full by June 30, 2010, becomes a 10-year amortizing loan at 0.5% above the interest rate on the Illinois Home Start 30-year loan. SOURC

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