Downpayment Plus (DPP®) and Downpayment Plus Advantage® (DPP Advantage®) offer Federal Home Loan Bank of Chicago (FHLBank Chicago) members easy-to-access down payment and closing cost assistance to help their income-eligible customers achieve homeownership. These programs give our members:
- The opportunity to maintain and expand their customer base
- The ability to assist any eligible borrowers purchasing homes in the communities they serve—not just first-time homebuyers
- Improved loan-to-value ratios
- The flexibility to combine these programs with the MPF Xtra® product or other secondary market programs
Downpayment Plus Program
Downpayment Plus
Downpayment Plus is a matching program that provides down payment and closing cost assistance for income-eligible homebuyers. The assistance is provided in the form of a forgivable grant paid on behalf of the borrower at the time the borrower closes on mortgage financing with a participating FHLBank Chicago member financial institution. Grants are forgiven on a monthly basis over a five-year retention period.
Downpayment Plus Advantage
Downpayment Plus Advantage is a similar program but assists income-eligible homebuyers participating in homeownership programs offered by nonprofit organizations that provide mortgage financing directly to the homebuyer; it is not a matching program. Nonprofit organizations providing direct first-mortgage financing, such as Habitat for Humanity or Neighborhood Housing Services, must partner with an FHLBank Chicago member financial institution to access DPP Advantage funds. Grants are forgiven on a monthly basis over a five-year retention period.
Program Elements
- For DPP, the maximum grant amount is the lesser of: 1) $6,000; 2) three times the homebuyer's net contribution; or 3) 25% of the first mortgage amount. For DPP Advantage, the maximum grant amount is $6,000.
- For DPP, the member limit is $420,000 on a first-come, first-served basis as long as funds are available. For DPP Advantage, there is no member limit.
- Program beneficiaries are required to complete both pre-purchase homebuyer education and counseling. Education must be delivered by a provider that has adopted the education component of the NIS or by an online provider approved by the FHLBank Chicago. Counseling must be delivered by a provider that has adopted the counseling component of the NIS.
Member and Borrower Roles and Responsibilities
Members:
- Execute a DPP Program Agreement
- Review the FHLBank Chicago DPP Program Guide
- Verify the borrower’s income in accordance with the DPP Income Calculation Guidelines
- Submit a grant reservation through eBanking
- Ensure the borrower completes both pre-purchase homebuyer education and counseling. Education must be delivered by a provider that has adopted the education component of the NIS or by an online provider approved by the FHLBank Chicago. Counseling must be delivered by a provider that has adopted the counseling component of the NIS
- Ensure the grant amount does not exceed the lesser of 1) $6,000; 2) three times the homebuyer’s net contribution; or 3) 25% of the first mortgage amount (DPP only)
- Disburse grant funds at the closing of the first mortgage
- Ensure the property is subject to a recorded retention agreement
- Submit all pertinent documentation to the FHLBank Chicago
- Monitor the retention agreement
Borrowers:
- Apply for first mortgage financing with a participating FHLBank Chicago member
- Provide the executed purchase contract for the property
- Provide evidence of household income
- Complete both pre-purchase homebuyer education and counseling. Education must be delivered by a provider that has adopted the education component of the NIS or by an online provider approved by the FHLBank Chicago. Counseling must be delivered by a provider that has adopted the counseling component of the NIS
- Contribute a minimum of $1,000 toward the purchase transaction (DPP only)
Application and Eligibility
- Members wishing to participate in the DPP programs must execute a Program Agreement with the FHLBank Chicago.
- The DPP programs are accessed through eBanking—the FHLBank Chicago’s member-only website. The institution’s Member Security Administrator must authorize one or more individuals to conduct DPP transactions in eBanking.
- A list of participating members is available under DPP Resources.
- Reservations are on a first-come, first-served basis.
- Property may be in any state in which the member does business.
- For DPP, the member originates or funds the first mortgage. For DPP Advantage, a nonprofit originates or funds the first mortgage.
Contact
Questions related to the DPP programs can be directed to FHLBank Chicago Community Investment at 312-565-5824 or dpp@fhlbc.com.