Isn't That Rich Podcast

If you’ve ever felt like homeownership is just out of reach because of the down payment, you’re not alone. Saving up thousands of dollars on top of everything else life throws your way can feel impossible. That’s why we’re excited to share something that could truly change the game for you. It’s called the Downpayment Plus® Program, and it offers up to $10,000 in grant money to eligible homebuyers. Yes, you read that right. Ten thousand dollars that you don’t have to pay back—if you meet a few simple requirements.

We recently talked with our Chief Mortgage Officer, John Streuter, on the Isn’t That Rich podcast, and he broke down everything you need to know about how this grant works, who qualifies, and how you can apply through Farmers State Bank.

So What Exactly Is the Downpayment Plus® Program?

The Downpayment Plus® Program is a grant offered through the Federal Home Loan Bank of Chicago, and it’s designed to help people who need a little boost to get into a home of their own. The most important thing to know is that this is not a loan. That means you don’t have to pay it back, as long as you stay in the home for at least five years.

This grant is part of a community reinvestment initiative funded by the bank system—not your tax dollars. That’s one of the features that makes the Downpayment Plus® Program so unique. It’s not a government handout, and it’s not something you’ll see advertised all over the place. It’s designed to support local communities, and it’s only available through participating lenders like Farmers State Bank.

Who Can Qualify?

You don’t have to be a first-time buyer, but you cannot currently own a home. If you’ve sold your home and are looking to buy another, or if this is your very first home purchase, you’re potentially eligible—as long as you meet the income guidelines.

These income limits are based on household size. For example, a one-person household must earn $48,550 or less annually. For two people, the limit is $55,450. If you’re part of a four-person household, the cap increases to $69,300. The program considers all income sources for people living in the home. That includes job income, disability payments, and any other consistent income—so it’s important to include everything when applying. And no, your pets don’t count toward household size, although we know they feel like family.

One important note: your household must be able to contribute at least $1,000 of your own money. That amount cannot be gifted or borrowed—it needs to be yours. That upfront contribution shows commitment and gets factored into the Downpayment Plus® Program.

How the Grant Money Can Be Used

The $10,000 grant from the Downpayment Plus® Program is designed to help with the major upfront costs of buying a home. That includes both your down payment and closing costs. Most buyers will use around $4,400 to $4,800 of the grant on expenses like insurance and fees due at closing, and the rest—typically around $5,500—can be applied to your down payment.

If you’ve saved up more than the required $1,000, you can absolutely bring more money to the table. The grant can be combined with your own funds to reduce the size of your mortgage and even eliminate the need for private mortgage insurance sooner.

Is There a Catch?

There’s no catch, but there are a few requirements. In addition to income and homeownership status, you’ll need to complete a homebuyer education course and a counseling session. The online course usually takes a few hours and costs around $350. That amount is included in your required $1,000 contribution and helps ensure you understand the homebuying process before signing on the dotted line. There’s no test you can fail. The counseling session is a helpful phone call that walks you through the basics and answers your questions.

You also must commit to staying in the home for at least five years. If you sell early, you may have to pay back a portion of the grant, depending on how long you lived there and how much equity you have. However, if you sell for less than the total owed, the remaining balance may be forgiven. And if you stay in the home for five years or more, you don’t pay a cent of the grant back.

Can You Combine This with Other Programs?

Yes, you can. In fact, some buyers might qualify for an additional program through the Illinois Housing Development Authority (IHDA). That means you could receive even more money—sometimes $14,000 or $16,000 total—depending on your eligibility. Every situation is unique, and our mortgage specialists will help walk you through what combination works best for you.

The Downpayment Plus® Program also works well with popular loan types like FHA, VA, USDA, and Freddie Mac or Fannie Mae programs. John explained that the most common fit tends to be with the Freddie Mac Home Possible and Fannie Mae HomeReady programs. These offer favorable interest rates and lower private mortgage insurance, especially for first-time buyers. While government-backed loans like FHA and USDA have their own pros and cons, the Downpayment Plus® Program can be used in many of those cases as well.

What If You Have Little or No Credit History?

Even if you don’t have much of a credit history—or what we sometimes call being a “credit ghost”—you still need to qualify for a mortgage. That means you’ll need to meet standard credit and debt-to-income requirements. The Downpayment Plus® Program itself doesn’t require a specific credit score, but the mortgage loan you use does.

One important rule to keep in mind is that you must apply for both the mortgage and the grant through Farmers State Bank. You can’t take the grant to another lender or use it with a loan you’ve secured elsewhere. It’s all part of one simple process here, and our team will take care of all the paperwork involved.

Real-Life Impact: One Customer’s Story

John shared the story of a recent buyer who was purchasing a $50,000 home. She had just over $1,000 to her name and no way to make the purchase without help. Using the Downpayment Plus® Program, she was able to cover closing costs, make a down payment, and walk into her new home with a manageable mortgage—and a lot of hope for the future. Without the program, that wouldn’t have been possible.

How to Apply

Applying is easy. Just call Farmers State Bank at 618-998-1188 and say you’re interested in the $10,000 homebuyer grant. You don’t need to remember the official name of the program. Just say, “I want the $10,000 grant,” and we’ll know exactly what you mean.

We’ll schedule an appointment to pre-qualify you for a mortgage loan. This includes a soft credit check that doesn’t affect your credit score. Once you’re pre-qualified and we confirm you meet the income and eligibility requirements, we’ll handle the Downpayment Plus® Program application paperwork for you.

Everything is done right here at Farmers. There’s no jumping between websites, no third-party applications, and no confusion.

Final Thoughts

With $1 million in funding available to Farmers State Bank for the Downpayment Plus® Program, we’re looking to help up to 100 buyers this year alone. That’s a hundred families who could finally take the step into homeownership with support they may not have known existed.

So if you’re thinking about buying a home, now is the time to explore your options. You don’t have to figure it all out alone. Come talk to our mortgage team and let’s see if the Downpayment Plus® Program could be the key that unlocks your front door.

Want to learn more or schedule a time to talk? Call us today at 618-998-1188. We’re here and we’re ready to help.