Downpayment Assistance Program

Planning & Zoning

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

The program offers up to 17% of the purchase price, depending on need. The maximum amount of assistance for households with incomes at or below 80% of Area Median Income is $30,000.

Borrower Contribution

The Borrower must contribute at least 3% from personal savings towards a downpayment and qualify for First Mortgage financing of 80% or greater of the Purchase Price (80% Loan-to-Value). 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, subject to net proceeds from the sale. 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 for loans $1-14,999 is 5 years, forgiven at 1/60th per month
The affordability period for loans between $15,000 and $30,000 is 10 years, forgiven at 1/120th per month.

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 the City of Evanston and the purchase price must be less than $332,500. 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. The property must pass a City a housing inspection and if rehab is needed any identified health or safety defects must be cured no later than 6 months from closing.

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 Jan 2012

Household Size	Maximum 80% of Area Median Income (AMI)
1	$42,500
2	$48,550
3	$54,600
4	$60,650
5	$65,550
6	$70,400
7	$74,550
8	$79,350

The City uses the "Part 5" method to verfiy income. Please click here for detailed description of inclusion/exclusions to count for income: Part 5 Income Worksheet

Participating Lenders

Becoming a Participating Lender

If you would like to become a Participating Lender in the City of Evanston's Downpayment Assistance Program, please fill out the following: Partipcation Request Form. Following the submittal of the Participation Request Form, please call Housing Planner, Mary Ellen Poole at 847-859-7889 to schedule a meeting. If approved, you will asked to complete the Lender Agreement: Lender Agreement.

Current Participating Lenders
The DPA overview of procedures provides a step-by-step look at roles and responsibilities in the Downpayment Assistance Program: DPA overview of procedures.