Downpayment Assistance Program
Evanston’s Downpayment Assistance Program offers a forgivable loan to income eligible first time buyers for downpayment and or closing cost assistance of a home in Evanston. The loans are available through participating lenders who provide purchase mortgage financing. The City’s funds are provided at closing.
Amount of Assistance
Up to $30,000 per household for downpayment and/or closing cost assistance is available for persons with household income at or below 80% of Area Median Income. Up to $25,000 in assistance is available for persons whose household income is between 81% and 100% of Area Median Income. The amount is also dependent on need.
Borrower Contribution
The Borrower must contribute at least 1.5% from personal savings towards a downpayment and qualify for First Mortgage financing, which cannot exceed 97% of the Purchase Price. There can be no cash back to the Borrower at closing except for pre-paid closing costs itemized on the Settlement Statement.
Forgivable Loan
The assistance is a forgivable loan secured by a Junior Mortgage. Borrowers also sign a Promissory Note, but no payments are due as long as the property remains owner-occupied during the affordability period. The loan is forgiven on a pro-rata basis over the length of the affordability period. If the property is sold or transferred or no longer owner-occupied, a portion of the loan is repaid based on the remaining affordability period. Otherwise, it is totally forgiven and no payments are due at the end of the term.
Affordability Period
The loan is forgiven on a pro-rata, monthly basis during the affordability period.
The affordability period is 5 years for loans up to $15,000
The affordability period is 10 years for loans over $15,000 and up to $30,000.
The junior mortgage may be subordinated upon request if the first mortgage is refinanced as long as there is no cash back upon refinancing. Otherwise, the unforgiven portion of the loan must be repaid.
The Property
The Property must be located in Evanston and the purchase price must be less than $332,500 or $340,000 depending on the funding source of the downpayment assistance. Allowable properties are: one or two unit buildings, a condominium or co-op unit, a
townhome, duplex, or detached single family home; manufactured housing, or property held in a Community Land Trust.
Other qualifications
The borrower must be a First Time Buyer, which means that they have not owned a home in the last three years. There are exceptions which include a single parent who only owned with a former spouse, or a displaced homemaker.
Borrowers must receive Homebuyer Education and provide a certificate from a HUD-approved housing counseling agency, lender or a locally-approved counseling course. Borrowers should obtain homebuyer education as early as possible to help determine the amount of first mortgage financing they could obtain based on income and debt, and a purchase price they can afford based on income, financing and downpayment.
Income Eligibility Limits as of April, 2008
Household Size |
Maximum 80% of Area Median Income (AMI) |
Maximum 100% of Area Median Income (AMI) |
|---|---|---|
1 |
$42,200 |
$52,800 |
2 |
$48,250 |
$60,300 |
3 |
$54,250 |
$67,900 |
4 |
$60,300 |
$75,400 |
5 |
$65,100 |
$81,400 |
6 |
$69,950 |
$87,500 |
7 |
$74,750 |
$93,500 |
8 |
$79,600 |
$99,500 |
Loan Limits and Purchase Price Limits
Household Income |
Maximum Loan Amount |
Maximum Purchase Price |
|---|---|---|
Up to 80% AMI |
$30,000 |
$332,500 |
81 to 100% AMI |
$25,000 |
$340,000 |
See the "Lenders and Education" document for the most up-to-date list of participating lenders.
Procedures: Follow the “Procedures for Purchasers” and submit the Eligibility Wait List Form to the Planning Division to start the process.
