The City of Chicago and the State of Illinois both have a number of programs designed to help people buy homes. In some cases they will lend you money to use as a down payment and in some cases the City of Chicago will give you money to use as a down payment.

One of the most generous programs is City of Chicago’s Home Buyer Assistance Program.  They will give you up to 7% of the loan amount, up to $17,500, to use as the down payment and to cover closing costs. There are some credit score requirements and there is a maximum income you can have to qualify. The income cutoff is a surprisingly high, $131,775. Home buyers are required to put up a $1000.

In theory you can have a low credit score and very little cash and the city will help you buy a home. In reality it is not that simple. You still have to qualify for a loan. The city may be happy with a $1000 down payment and a so-so credit score but that does not mean a mortgage company will be. The biggest problem will be with the seller. Most sellers want earnest money of more than $1000. The city will pay a down payment but not until the closing. Very few sellers will be willing to take their home off the market with only $1000 guaranteeing the deal. I have done deals with as little as 2.5% down and 5% will work in some cases but owners usually want 10% or more.