11/30/2016 05:34 pm ET | Updated Dec 01, 2016

Special Report: Free Down Payment Money!

A bank is granting free money to help you with a down payment on a house! It sounds too good to be true, but it actually is true. Here are the details.

To remain in compliance with Federal community lending rules, Associated Bank has created a fund to help home buyers in selected census tracks in Illinois and Wisconsin, by giving them up to $20,850 in free money to put toward their mortgage down payment!

Yes, the details are important. The money is being distributed through their affiliated mortgage originators, but the bank would not give out a list of those lenders. I learned of this new deal from my long-time mortgage expert Daniel Chookaszian of Perl Mortgage, which is one of the lenders that has this money available starting immediately for those who qualify.

Just to make things easier, you can contact Chookaszian at 312-376-2215 to see if you qualify based on credit and location of the property.

Here's what you need to know:

To qualify for this deal the property you are trying to purchase must fall within a specific census tract which has been determined to have a majority of minority homeowners, no matter what the property values.

• They will gift/grant you down-payment money up to 5% of the amount of the mortgage, with a maximum of $20,850. For example, if you qualify and are borrowing $400,000, you could get a grant of $20,000. The money does not have to be repaid - ever.

• The money is available for the purchase or refinance of a primary residence.

• There is no income limit for the purchaser.

• There is no limit on the purchase price of the house.

• You must have good credit (approx. 620 or higher) and appropriate income to qualify for a mortgage. (The higher the credit score, the lower the rate.)

• You may pay a slightly higher interest rate on the loan than with a traditional down payment loan.

• Mortgages may be made with only a 5% down payment -- all of which can come from the grant! Rates and PMI are, of course, higher for this option.

• If you do not have a 20% down payment (including the grant amount), you will be required to purchase PMI - private mortgage insurance that protects the lender, until you have 20% equity in the home.

• If you have saved 15% of the purchase price as a down payment, and get this gift of an additional 5% of the mortgage amount, and if it brings you up to 20% equity, you may avoid paying PMI on your purchase.

This grant money is available on a first come/first served basis. It has been estimated there is a pool of approximately $10 million available for these grants (although that could not be confirmed). Still, that could facilitate around $200 million in mortgages.

This column will be updated as soon as names of other participating lenders are revealed. Again, this program is only for homes located in specific census tracks in Illinois and Wisconsin.