AskMike.

03Guide · 5 min read

The number that matters is not "down payment." It is cash to close — down payment plus closing costs minus any credits and assistance. Buyers routinely over-save for one and forget the other entirely.

Cash to close, defined

Down payment + closing costs + prepaids (taxes and insurance set up in escrow) − seller credits − lender credits − assistance = cash to close. Mike gives you this number on day one and updates it with every offer.

Gift funds are normal

Family can gift your down payment on conventional, FHA, VA and USDA loans. There is a simple gift letter and a paper trail — Mike walks your family through it so nobody is surprised at underwriting.

IHDA

The Illinois Housing Development Authority offers forgivable, deferred and repayable second loans (the IHDAccess programs) for down payment and closing costs, paired with an IHDA first mortgage. Income and purchase-price limits vary by county.

City of Chicago programs

Buying inside the city limits can open additional, city-specific assistance for eligible households. Programs change year to year, so Mike checks what is funded the week you are shopping — not what was funded last spring.

Seller and lender credits

A seller can agree to pay part of your closing costs. A lender credit trades a slightly higher rate for lower upfront cost. Both are tools, not tricks, and both have program limits.

What to leave in the bank

Underwriters like reserves and so should you. Draining every dollar to close is how new homeowners end up putting a water heater on a credit card. Build the plan with a cushion.

Mike · Branch Manager & Loan Officer
my parents want to help with the down payment. is that allowed?
Absolutely — gift funds are allowed on every major program. I will send them a one-page gift letter and tell you exactly how the transfer should look so underwriting is a non-event.

Quick answers

What are closing costs on a house in Illinois?

Closing costs typically run roughly 2–4% of the purchase price and include lender fees, title and settlement charges, recording fees, and prepaid taxes and insurance. The exact figure appears on your Loan Estimate.

Can I use a gift for my down payment?

Yes. Gift funds from family are allowed on conventional, FHA, VA and USDA loans. A gift letter and documentation of the transfer are required.

Is down payment assistance a grant or a loan?

Usually it is a second loan — often deferred with no monthly payment, repaid when you sell or refinance. Some programs include forgivable portions. Mike explains the exact terms of your version before you commit.

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