FHLBank Chicago Downpayment Plus (DPP) Program

What is FHLBank Chicago Downpayment Plus (DPP) Program?

FHLBank Chicago Downpayment Plus (DPP) Program is a forgivable loan for homebuyers in Statewide, Illinois, administered by Federal Home Loan Bank of Chicago.

• Downpayment Plus (DPP) is a set-aside program of the Federal Home Loan Bank of Chicago providing forgivable grants of up to $10,000 (or 25% of first mortgage amount, whichever is less) for down payment and closing costs to income-eligible homebuyers (at or below 80% AMI) purchasing in Illinois or Wisconsin through participating FHLBank Chicago member lenders. Grants are forgiven pro-rata over a 5-year retention period. Borrower must contribute minimum $1,000 and complete both pre-purchase homebuyer education and HUD-approved counseling.
• Up to $10,000 forgivable grant.
• No interest on grant.
• Stackable with state/local/federal programs.
• Broad eligible mortgage product list.
• Manufactured homes eligible.
• 2-unit properties eligible.
• Land trust units eligible.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Federal Home Loan Bank of Chicago AHP set-aside funds.

How much assistance does it provide?

FHLBank Chicago Downpayment Plus (DPP) Program offers up to $10,000 in assistance.

• Award tiers: None; single tier.
• Buyer contribution: Minimum $1,000 from borrower's own funds toward purchase transaction. Cash back at closing reduces contribution; more than $250 cash back deducted from reimbursement. Contribution may be earnest money, cash at closing, or costs paid outside closing.
• The program can be combined with Federal, state, and local grants or loans including CDBG, HOME, IHDA programs; DPP Advantage for nonprofit mortgage partners.
• Amounts are the program's published maximums, not an offer — Federal Home Loan Bank of Chicago determines any individual award.

Do you have to pay it back?

FHLBank Chicago Downpayment Plus (DPP) Program is forgiven after 5 years, so a buyer who stays that long does not repay it.

• Repayment is triggered by Sale or refinance before end of 5-year retention period unless buyer is also <=80% AMI; forgiven pro-rata monthly over 60 months; no repayment if amount due is $2,500 or less.
• The assistance is recorded in Second lien (retention agreement recorded on property) position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

FHLBank Chicago Downpayment Plus (DPP) Program is open to buyers who will live in the home as their primary residence.

What are the income limits?

FHLBank Chicago Downpayment Plus (DPP) Program limits household income to 80% of the area median income, which varies by county and household size.

• The limit applies to total household income, not only the borrower&rsquo;s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

FHLBank Chicago Downpayment Plus (DPP) Program caps the purchase price as follows: No stated purchase price limit; sales price may not exceed appraised value for related-party or REO transactions.

• Eligible property types include single-family, two-unit, condominium, and manufactured home (titled as real estate).
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

FHLBank Chicago Downpayment Plus (DPP) Program is a federal program, so it is not limited to Illinois.

How do you apply?

Applications for FHLBank Chicago Downpayment Plus (DPP) Program go through Federal Home Loan Bank of Chicago, which publishes the current terms and the application steps on its own site.

1. 1

   Take a homebuyer education course

   Required by the program, through Pre-purchase education: HUD-approved counseling agency OR Framework, eHome America, Fannie Mae HomeView, Freddie Mac CreditSmart. Pre-purchase counseling: HUD-approved counseling agency only. Both education AND counseling required; certificates required for at least one borrower..

2. 2

   Contact Federal Home Loan Bank of Chicago to reserve funds

   Funds are reserved through First-come, first-served via DPP Online (eBanking portal); reservations available until member limit exhausted or last business day in December, and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.