Lake County, IL - First Time Home Buyer

Are you a first time home buyer looking to purchase a home in Lake County, Illinois?  On this page you can learn about some of the different types of mortgage programs that are available to first time home buyers in Illinois.  You may also view down payment assistance programs that are currently being offered in Illinois.

Lake County, IL – First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

• Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
• FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
• USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
• VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
• Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2023 conforming loan limits for Lake County, IL (or any other county) using this conforming loan limit lookup tool.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
• Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and people with a variety of credit issues (such as low credit scores or a recent bankruptcy).  Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the mortgage options that are available to first time home buyers. 

Would You Like to Get Pre-Approved for a Mortgage?
Click Here to Get Pre-Approved for a Home Loan

Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Illinois.  You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.

Lake County, IL – Down Payment Assistance Programs

First time home buyers in Lake County, Illinois may be eligible to receive down payment assistance.  This includes programs that are offered statewide, as well as a program that is offered exclusively in Lake County.  You can learn more about the program offered in Lake County below.

Lake County Down Payment Assistance Program

The Affordable Housing Corporation (AHC) of Lake County, Illinois offers an excellent down payment assistance program.  This includes up to 5% of the purchase price in the form of a 5 year loan.  A great aspect of this is that the amount you owe is reduced each month and after 5 years, you do not have to pay anything back!  Therefore, it initially acts as an interest free repayable loan, but after 5 years it disappears an acts more as a grant.

The program details and requirements are as follows:

• You must be a first time home buyer. The only exception to this rule is a single parent who has custody of one or more children and has not owned a home in the last 3 years.
• You may purchase a one unit (single family residence) property in Lake County, with a max purchase price of $214,000.
• A maximum of 5% of the purchase price can be received in assistance.  Based on the maximum price of $214,000, this would equal as much as $10,700 in assistance.
• The home that you buy can only be used as a primary residence.  You can not buy a home that you do not occupy or rent out.
• As a minimum investment, you are required to pay either $1,000 or 1% of the sales price, whichever is
• A home inspection is required to make sure that there are no hazardous materials or structural damages.
• You must attend a home buyer education class.  This can be through a HUD approved agency, or through the AHC who offers courses.  Online classes are not accepted, they must be attended and completed in person.
• The funds are only available for low and average income individuals or households.  The amount that you can make depends on the current median income average in Lake County.  For one person, this can be as low as $42,600 and for 8 persons in a household, this can be as high as $100,320.  The amounts are adjusted annually.

Are You Eligible for Down Payment Assistance?

A mortgage specialist can help you check your eligibility for down payment assistance.  If you would like to receive some help checking what down payment assistance programs you may be eligible for, please fill out this form.  We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
It is easy to find out what mortgage programs you may qualify for.  We can match you with lender that offers free consultations, and they can help you get pre-approved (and also compare what options may be available to you).  To have a mortgage lender contact you, request to be matched with a lender.