Buying a home in Frankfort does not have to wait until you save 20 percent. You have several low and even zero-down paths, plus state and local resources that can help with closing costs. If your goal is to minimize cash to close while staying competitive in Will County, this guide gives you clear options and a simple way to compare them. Let’s dive in.
What your cash to close includes
Your total upfront cost is more than the down payment. You will bring your down payment, closing costs, and prepaids like taxes and insurance. Closing costs typically range about 2 to 5 percent of the purchase price, but your actual amount depends on fees, taxes, and who pays what. Ask your lender for a detailed Loan Estimate to see your specific numbers.
Loan types with low or zero down
Conventional loans
Many buyers in Frankfort use conventional financing with as little as 3 percent down if they qualify. Private mortgage insurance is required when you put less than 20 percent down, and it can be monthly or lender-paid. Conventional loans also allow gift funds and seller contributions within program limits. For program background, review guidance from Fannie Mae or Freddie Mac.
FHA loans
FHA loans require a 3.5 percent minimum down payment for qualified borrowers. You will pay an upfront and monthly mortgage insurance premium, and FHA tends to be more flexible on credit and debt-to-income. FHA financing pairs well with many down payment assistance programs. You can learn more through HUD’s resources.
VA loans
If you are an eligible veteran, active-duty service member, or a qualifying spouse, a VA loan may allow zero down payment. A funding fee may apply, and you can finance it into the loan. Some assistance programs can be combined with VA depending on rules. Explore eligibility at the U.S. Department of Veterans Affairs home loan page.
USDA loans
USDA loans can offer zero down for eligible buyers purchasing in qualifying rural areas, subject to income limits. Suburban neighborhoods may not qualify, so you will need to check the property location and income rules. See program details on the USDA Rural Development Single Family Housing page.
Jumbo and portfolio loans
Higher-priced homes often need jumbo or portfolio loans that typically require 10 to 20 percent down or more. These loans have stricter credit standards and generally do not pair with government assistance programs. If you are shopping at higher price points, compare jumbo requirements early in your process.
Ways to cover the gap
Gift funds and family help
Many loan programs accept documented gift funds for some or all of your down payment. You will need a gift letter and proof of transfer. Your lender will guide you on acceptable sources and the documentation steps.
Seller concessions and lender credits
Seller concessions can cover some of your closing costs. Limits depend on loan type. For example, FHA allows seller-paid costs up to 6 percent of the sales price for certain items. Lender credits can also offset closing costs in exchange for a slightly higher interest rate, which can increase your long-term payment.
Down payment assistance structures
Assistance can come as grants, forgivable second mortgages, deferred zero-interest seconds, or low-interest loans. Each option has its own rules for eligibility, forgiveness, and repayment. Check how long you must live in the home, whether you can refinance, and what happens if you sell.
State and local help for Frankfort buyers
Illinois Housing Development Authority (IHDA)
IHDA is the primary statewide source of down payment and closing cost assistance. Programs change over time, and most require a homebuyer education course and income and purchase price limits. Start by reviewing current offerings and participating lenders on the IHDA website.
Will County and Village of Frankfort resources
Will County sometimes administers assistance funded through housing programs for income-qualified buyers or targeted areas. Check the county’s community development pages for current options and referrals to housing counselors on the Will County official site. You can also look for local contacts or workshop notices on the Village of Frankfort site.
Nonprofits, housing counselors, and employers
Neighbor-focused nonprofits and community development groups may offer education, small grants, or matched savings programs. Many buyers benefit from speaking with a HUD-approved housing counselor for budgeting and program referrals. You can search approved agencies through HUD’s counselor finder. Also check your employer or local credit unions for homebuyer benefits.
How to compare programs with local lenders
Step 1: Get preapproved with 2 to 3 lenders
Get written preapprovals from a few banks, credit unions, or mortgage brokers. Confirm they offer the loan types you need and that they participate in IHDA or local assistance programs you plan to use. This reveals your price range, credit and debt-to-income fit, and DPA eligibility.
Step 2: Ask precise questions
Use the same questions with each lender so you can compare apples to apples:
- Which loan products fit my profile: Conventional 3 percent, FHA, VA, USDA?
- Do you participate in IHDA or Will County assistance? What are the current limits and forgiveness or repayment terms?
- Can assistance be combined with my loan type? Any stacking restrictions?
- What are the minimum credit score, maximum DTI, and income limits?
- How much is available for down payment or closing costs, and what can it be used for?
- Is the assistance a grant, forgivable second, or deferred second? When would I repay it?
- Are there extra overlays or fees when using assistance?
- How do seller concessions and gift funds work with this program?
Step 3: Request sample Loan Estimates
Ask each lender for a Loan Estimate for the same price point and program scenario. Compare:
- Cash to close, including assistance and any credits
- Monthly payment, including taxes, insurance, and mortgage insurance
- Mortgage insurance rules and how long PMI lasts
- Total interest over the loan term
Step 4: Understand documents and timing
Many assistance programs require early reservation of funds and extra paperwork. Confirm the timeline and what triggers repayment. Ask how any second mortgage will be recorded on title.
Step 5: Watch for overlays and experience
Some lenders apply stricter rules than program minimums. Ask for written overlays and confirm they have experience closing loans with your chosen assistance to avoid delays.
Step 6: Use housing counseling and coordinate with your agent
If assistance requires education, enroll early and get your certificate ready. A HUD-approved counselor can help you budget and meet program steps. Keep your lender and agent aligned on deadlines and seller negotiations.
Paperwork checklist
Gather these items early to speed up approval:
- Recent pay stubs, W-2s, and two years of tax returns
- Two to three months of bank statements for all accounts
- Driver’s license and Social Security number
- Homebuyer education certificate if required
- Gift letter and evidence of transfer if using gift funds
- Veteran Certificate of Eligibility if applying for a VA loan
Quick ways to narrow your options
- If you qualify for VA, start there for possible zero down and favorable terms, then compare with conventional or FHA if needed. Review details at the VA home loan program.
- If your credit or debt-to-income is tighter, compare FHA with conventional 3 percent to see which lowers your total cost. Guidance from CFPB can help you decode fees and mortgage insurance.
- If you want to minimize upfront cash, look at IHDA or county assistance plus seller concessions, and review whether a slightly higher rate with a lender credit makes sense.
- If a property might be eligible for USDA, confirm area and income limits through the USDA program site.
Frankfort-focused tips
- Start the assistance conversation before you shop. Some programs require education, income verification, and a funds reservation that must be in place before closing.
- Ask whether the program can be combined with your chosen loan type and whether you can use seller concessions alongside it. FHA allows seller-paid costs up to 6 percent for certain items.
- If you are considering a condo or townhome, confirm the property and association meet the loan and program’s eligibility rules.
- Check for updates. Assistance amounts, income limits, and purchase price caps change. Review the IHDA site and consult a participating lender for the latest specifics.
Your next step
If you want a clear plan for buying in Frankfort with the least cash possible, start with a conversation and a side-by-side comparison of your loan and assistance options. We can help you connect with local lenders who work with IHDA and Will County programs and make sure your offer strategy supports your financing. Reach out to Latitude Realty to map your path to homeownership in Frankfort.
FAQs
Can I use down payment assistance in Frankfort if I am not a first-time buyer?
- Many programs focus on first-time buyers, but some waive that requirement for certain populations or areas. Check the specific program rules with IHDA or your lender.
Will down payment assistance reduce my monthly mortgage payment?
- Assistance lowers your upfront cash. Your monthly payment depends on loan type, down payment amount, and mortgage insurance. A larger down payment can reduce or remove mortgage insurance.
Can I combine seller concessions with assistance programs in Will County?
- Often yes, within program and loan limits. FHA allows seller-paid costs up to 6 percent for certain items. Confirm exact limits with your lender.
What happens if I sell or refinance after receiving assistance?
- Forgivable or deferred second mortgages often require repayment if you sell or refinance before a set period. Review the forgiveness and repayment terms before you commit.
How long does it take to secure assistance funds in Illinois?
- Timelines vary. Many programs require early application and reservation, and funds can be limited. Start during preapproval and coordinate with your lender.
Are condos in Frankfort eligible for loans and assistance?
- Many programs and loan types allow condos, but the property and association must meet eligibility standards. Ask your lender to review the association and program rules.
Are assistance funds taxable income?
- Most grants used to buy a primary residence are not taxable income, but tax treatment can vary by program. Consult a tax professional for personal advice.
