Posted On: July 27, 2020 by Prevail Bank in: Home Loans
The Downpayment Plus Program (DPP) is a matching program offered by the Federal Home Loan Bank of Chicago (FHLBC) that assists income-eligible home buyers with their down payments and closing costs. The Prevail Bank Mortgage Lending Team is proud to offer this assistance through our partnership with the FHLBC. The Downpayment Plus Program is provided as a forgivable grant, which is paid on behalf of the borrower at the time the mortgage is first closed upon.
What is the Downpayment Plus Program?
The Downpayment Plus Program helps income-eligible homebuyers put money down towards a home purchase, which in turn typically offsets the cost of their monthly payments.
This down payment grant is forgiven over the course of a 5-year retention period; meaning, if a consumer stays in this house for 5 years, the consumer does not have to make any payments back on the grant. If the consumer accepting the grant does not reside in the home for 5 years, the consumer will have to repay a proportional share of the grant.
Downpayment Plus Program Requirements
The Downpayment Plus Program is an annual program that is based on a first-come, first-served basis until the allotted funds in the program run out. While there are many factors that determine a consumer’s eligibility for the program, the maximum amount of grant assistance for 2020 is $6,000, which goes toward the down payment and closing costs.
Approval for assistance is additionally based on the county’s Housing and Urban Development (HUD) income guidelines, and on how many people will be living in the specified home. In addition to meeting the program’s income-eligibility requirements, the homebuyer must meet the following criteria:
- Must contribute at least $1,000 toward the purchase of the home
- Must not exceed 45% in total debt to income ratios
- Must complete pre-purchase homebuyer education and counseling
- Must live in the home as their primary residence
For additional requirements and details on the Downpayment Plus Program, reach out to a Prevail Bank Mortgage Lender to see whether you are eligible for this assistance-based program.
Down Payment Tips: The Downpayment Plus Program (DPP) is a great option to assist with further down payment and closing costs for those who are eligible. It is a grant, up to $6,000 in assistance, that lowers your borrowing costs and doesn't need to be paid back if you can stay in the home for a minimum of 5 years. If you don't quite have enough for a down payment from your own funds, this program could potentially help!
