REALTORS® across Illinois know firsthand that even as homebuyers face high interest rates and home prices, the demand for homeownership remains strong. Unfortunately, rising costs have put the American dream just out of reach for many households. But did you know financial institutions in your community can help bridge the financial gap to homeownership for qualifying borrowers?

If a financial institution in your area is a member of the Federal Home Loan Bank of Chicago (FHLBank Chicago), they may be able to provide easy-to-access down payment and closing cost assistance to your low- and moderate-income homebuyers through the Downpayment Plus® (DPP®) grant program. With grants up to $10,000 per homebuyer and year-round availability, REALTORS® can partner with financial institutions in their area to help reduce barriers to homeownership and provide opportunities to build home equity.

Throughout 2023, FHLBank Chicago and their financial institution members have risen to the demand for DPP grants, helping more than 3,000 homebuyers achieve the American dream. In addition to down payment and closing costs, homebuyers can use the funds for eligible rehabilitation costs, an interest rate write-down on a mortgage, escrow reserves and deposits with a lender, and up to $500 for homebuyer education and counseling.

“We’ve been utilizing the DPP program since 2009 and have dispersed over $7 million in funds to our communities and to homeowners, and over 1,200 families have been assisted,” says Sandy DeMond, Senior Vice President, Director of Community Banking, at Busey Bank in Edwardsville, Illinois. “Our homebuyers are so humble. They’re so excited to know they were able to buy a home, that they’ve had assistance, and someone’s there to help them out.”

But there is more to the DPP program, including the Downpayment Plus Advantage® (DPP Advantage®) program, which assists income eligible homebuyers participating in homeownership programs offered by nonprofit organizations that provide mortgage financing directly to the homebuyer. Nonprofit organizations providing direct first-mortgage financing, such as Habitat for Humanity or Neighborhood Housing Services, can partner with an FHLBank Chicago member financial institution to access DPP Advantage funds.

Tracking down which financial institutions are FHLBank Chicago members is easy and can help you point homebuyers in the right direction. There is a great chance there are FHLBank Chicago members in your community that you know. To view FHLBank Chicago member banks and credit union in Illinois, visit fhlbc.com/illinois-members. What does the homebuyer have to do? Outside of meeting income eligibility requirements, homebuyers are required to participate in homeownership education and counseling, which supports sustainable homeownership. The lender will work directly with the homebuyer to handle the application process and approval with FHLBank Chicago.

“It’s not just about dispersing a down payment assistance fund. It’s about building relationships. It’s about connecting with your community and getting that trust from that client to know that whatever they need in the future, they’re going to come back,” continues DeMond. “DPP is another tool in our belt to leverage on how we can maximize that relationship with the client.”

As you work with potential homebuyers, keep the DPP programs in mind when you discuss their financials. The straightforward process and access to funds could make all the difference for residents in your community.

Written by Rebecca Pagano, AVP, Lead Community Investment Operations Specialist, FHLBank Chicago.