A Comprehensive Guide to Illinois First-Time Home Buyer Grants and Assistance

If you’re buying a home for the first time in the state of Illinois, you’re in luck. There are multiple statewide and locally-sponsored down payment and closing cost assistance programs to help you reach your goal of becoming a homeowner. They each offer different levels of assistance and have varying requirements for eligibility, but all require recipients to complete a homebuyer education course.

Let’s get started.

Illinois Housing Development Authority

The Illinois Housing Development Authority has four programs that offer different types of assistance to homebuyers located across the state. Each program offers assistance in accordance with a 30-year, fixed-rate mortgage from a participating lender.

1. ILHFA1

ILHFA1 provides up to $10,000 in down payment and closing cost assistance.

Who Is Eligible?

Homebuyers must have a minimum credit score of 640; make a minimum contribution to the sale of $1,000 or 1%, whichever is greater; and have an annual income that meets the threshold set for their county, the number of people in their household, and the type of property they’re buying. Both first-time and repeat homebuyers are eligible to apply.

What Types of Properties are Eligible?

One- and two-unit properties that are either new or existing and in the state of Illinois are eligible. The home must be used by the homebuyer as their primary residence.

Is it a Grant or a Loan?

This is a 0% loan that is deferred for the life of the mortgage. The loan becomes payable once the homebuyer sells the home, refinances, or pays off the mortgage.

What’s Good About This Program?

This is a statewide program that matches the assistance payback amount with that of the homebuyer’s first mortgage. This can make it easier for the homebuyer to manage both sets of financing.

2. IHDAccess Forgivable Mortgage

The IHDAccess Forgivable Mortgage provides down payment and closing cost assistance for 4% of the purchase price, up to $6,000.

Who Is Eligible?

This program is available to first-time homebuyers and repeat homebuyers who have a minimum credit score of 640 and meet the income threshold requirement for their county, number of household members, and the type of property they are buying. Homebuyers contribute $1,000 of their own money or 1% of the purchase price, whichever is greater.

What Types of Properties are Eligible?

One- and two-unit properties that are either new or existing and in the state of Illinois are eligible. The home must be used by the homebuyer as their primary residence.

Is it a Grant or a Loan?

This is a forgivable loan that is forgiven monthly over 10 years. If the homebuyer stays in the home for 10 years or more, they will not have to repay the loan.

What’s Good About this Program?

This loan is completely forgiven if the homebuyer stays in the home for 10 years. This could be a good option if the homebuyer plans to stay in the home for the long-term.

3. IHDAccess Deferred Mortgage

The IHDAccess Deferred Mortgage provides payment and closing cost assistance of up to 5% of the purchase price or $7,500, whichever is greater.

Who Is Eligible?

Illinois residents with a credit score of 640 or higher; who are first-time or repeat homebuyers; and meet the income threshold for their county, number of household members, and the property type they’re buying are eligible to apply. Program participants must contribute at least 1% of the purchase price or $1,000 of their own money toward the purchase of the home, whichever is greater.

What Types of Properties are Eligible?

One- and two-unit properties – both new and existing – that are located in the state of Illinois are eligible. The home must be used by the homebuyer as their primary residence.

Is it a Grant or a Loan?

This is a 0% interest, 30-year second-mortgage, deferred for the life of the first mortgage. It becomes payable once the homeowner sells the home, or refinances or pays off the first mortgage.

What’s Good About It?

This loan isn’t due for payback until the first mortgage is completely paid off (either by selling, refinancing, or making monthly payments). This can make it easier for the homebuyer to manage it.

4. IHDAccess Repayable Mortgage

The IHDAccess Repayable Mortgage provides down payment and closing cost assistance of 10% of the purchase price up to $10,000, which borrowers repay on a monthly basis.

Who Is Eligible?

Homebuyers must have a minimum credit score of 640; make a minimum contribution of $1,000 or 1% of the purchase price toward the sale, whichever is greater; and have an annual income that meets the threshold set for their county, the number of people in their household, and the type of property they’re buying. Both first-time and repeat homebuyers are eligible to apply.

What Types of Properties are Eligible?

One- and two-unit properties – for both new and existing homes – that are located in the state of Illinois are eligible. The home must be used by the homebuyer as their primary residence.

Is it a Grant or a Loan?

This is a 0% loan that the borrowers repay monthly over the life of the first mortgage.

What’s Good About The Program?

This second mortgage becomes a part of the monthly mortgage payment so there isn’t a large balloon payment due when the homeowner pays off the first mortgage. This can make it easier to budget.

1st Home IL

1st Home IL provides up to $7,500 in assistance.

Who Is Eligible?

First-time homebuyers, homebuyers who haven’t owned a home in the last three years, and veterans are eligible to apply. They must meet the lenders’ credit score and income threshold requirements for the number of people in their household and the county in which the property is located. Homebuyers must contribute at least 1% of the purchase price or $1,000 from their own funds toward the home purchase.

What Types of Properties are Eligible?

One- or two-unit residential homes that are existing construction and located in the following counties are eligible: Boone, Cook, DeKalb, Fulton, Kane, Marion, McHenry, St. Clair, Will, and Winnebago. The property must also meet the lender’s purchase price threshold for its respective county.

How Does it Work?

Homebuyers that want to participate in this program must apply for it with a participating lender.

Is it a Grant or a Loan?

This is a grant. It doesn’t need to be repaid.

What’s Good About This Program?

Since the assistance comes in the form of a grant, the homeowner has more flexibility in their future choices when it comes to what they do with the home.

City of Alton Homeownership Program

The City of Alton Homeownership Program provides between $3,000 and $5,000 in down payment and closing cost assistance. Homebuyers classified as “low income” will receive $3,000 in assistance, and those classified as “very low income” will receive assistance in the amount of $5,000.

Who Is Eligible?

Homebuyers with an annual income at 80% of the area median income or less, as determined for the number of people in their household, are eligible to apply. For example, a family of four can have an annual income of $53,700 or less.

Program participants must have had a clean credit history for the last 12 months, be able to contribute at least $1,000 of their own money toward the home purchase, and must secure a first mortgage with a fixed-interest rate that is within 1% of market rate. The $1,000 contribution can come in the form of earnest money deposit or cash at closing.

What Types of Properties are Eligible?

Properties located in the city of Alton that are the homebuyers’ primary residences are eligible. They must also have a purchase price at or below the limit set by the city. Contact the Department of Development and Housing for more information.

How Does it Work?

Applicants must apply for the program through a participating lender.

Is it a Grant or a Loan?

This is a 0% loan that is forgiven over a period of five years.

What’s Good About this Program?

Even though this is a loan, the five-year period in which it’s forgiven is relatively short.

Community Connections Homebuyers’ Assistance

Community Connections Homebuyers’ Assistance provides a grant of up to 7% of the total first mortgage amount for down payment and closing cost assistance.

Who Is Eligible?

Borrowers that are eligible for an FHA, VA, USDA, Freddie Mac, and Fannie Mae loans, and meet the corresponding credit score and annual income requirements, are eligible to apply:

• Borrowers that are arranging an FHA, VA, or USDA loan must have a minimum credit score of 580 and a maximum annual income of $88,435.
• Borrowers that are securing a first mortgage with a Freddie Mac or Fannie Mae lender must have a minimum credit score of 640 and a maximum annual income of $131,775.

Borrowers must contribute $1,000 or 1% of the purchase price, whichever is less, of their own funds.

What Types of Properties are Eligible?

The following properties are eligible as long as they are within an eligible census tract: single-family homes, townhomes, condos, and owner-occupied properties that have up to four units.

How Does it Work?

Once homebuyers apply for their first mortgage with a private lender, they must submit their application packet to the Department of Housing.

Is it a Grant or a Loan?

This is a grant. It doesn’t need to be repaid.

What’s Good About This Program?

This grant can be used to refinance a mortgage, which means the homeowner would end up with a lower loan amount. This could help lower a homeowner’s monthly mortgage payment.

Downpayment Plus and Downpaymnent Advantage Programs

Downpayment Plus and Downpayment Advantage Programs provide down payment and closing cost assistance in the amount of $10,000 or 25% of the purchase price, whichever is less.

Who Is Eligible?

Program participants must meet income eligibility requirements and complete a homeowner’s education course by a HUD-approved counseling organization.

What Types of Properties are Eligible?

The home may be located in any state in which the member lender does business.

How Does it Work?

These forgivable loans are offered in conjunction with the homebuyers securing a first mortgage with a lender that’s also a member of the Federal Home Loan Bank of Chicago. You can find a list of participating lenders on the DPP and DPA website.

• The Downpayment Advantage program is for borrowers securing their first mortgage through a nonprofit institution like Habitat for Humanity.
• The Downpayment Plus program is for borrowers securing a first mortgage through a for-profit participating financial institution. Participants of the Downpayment Plus Program must contribute at least $1,000 of their own funds toward the purchase of their home.

Is it a Grant or a Loan?

This is a loan forgiven on a monthly basis over a five-year period.

What’s Good About This Program?

Homebuyers have the option to work with any lender they prefer (as long as that lender is a member of the Federal Home Loan Bank of Chicago). There also aren’t strict location requirements for this program like with other assistance programs.

Madison County First-Time HOMEBuyer Program

The Madison County First-Time HOMEBuyer Program provides down payment and closing cost assistance of up to $5,000 for first-time home buyers.

Who Is Eligible?

First-time homebuyers or homebuyers who haven’t owned a home in the last three years are eligible to participate as long as they have a credit score of at least 620 and their annual income doesn’t exceed 80% of area median income. For a family of four, their income can be $80,350 or less.

What Types of Properties are Eligible?

New and existing, one or two-unit family residences, and condominiums are eligible as long as they’re located in Madison County.

How Does it Work?

Program participants must apply through a participating lender.

Is it a Grant or a Loan?

This is a grant. It doesn’t need to be repaid.

What’s Good About This Program?

This is a grant so homebuyers don’t need to stay in their home for any specified period of time in order to avoid paying it back. This gives homebuyers more flexibility in their future decisions.

Joliet Down Payment Assistance Program

The Joliet Down Payment Assistance Program provides down payment and closing cost assistance of between $1,000 and up to 20% of the purchase price.

Who Is Eligible?

Homebuyers are eligible to apply for this assistance if their annual income is 80% of area median income or less.

What Types of Properties are Eligible?

Eligible properties must be located in the city of Joliet, owner occupied, and the homebuyer’s principal residence. They can’t be located in a 100-year floodplain and must comply with the maximum purchase price threshold for the property’s area and pass inspections. Eligible home types include: single family homes, townhomes, condominiums, and manufactured homes on a fixed foundation.

How Does it Work?

Homebuyers that wish to apply can submit this application to the Will County Center for Community Concerns. Homebuyers must provide $2,500 of their own funds toward the purchase.

Is it a Grant or a Loan?

This is a 0%, forgivable loan that is secured as a second mortgage.

What’s Good About This Program?

This program targets a specific area so if you and your property are eligible, you may have a higher chance of receiving funds than with another program.

Kane County First-Time Homebuyer Loan Program

The Kane County First-Time Homebuyer Loan Program provides up to $10,000 in down payment and closing cost assistance. An additional $10,000 could be available if the home is located within the city limits of St. Charles.

Who Is Eligible?

First-time homebuyers and those who haven’t owned a home in the last three years who have been a resident of, or employed full time in, Kane County or the portion of Elgin that’s in Cook County for at least one year. Homebuyers who meet the income threshold and are pre-approved for a first mortgage are eligible to apply.

What Types of Properties are Eligible?

Eligible property types include single family homes, townhomes, and condominiums. If the property is existing construction, it can have a maximum purchase price of $209,000. If the property is new construction, it can have a maximum purchase price of $228,000.

How Does it Work?

Once homebuyers receive mortgage pre-approval, they should complete and submit an application per the application’s instructions. Homebuyers must also contribute at least 1% of the purchase price from their own funds toward the home purchase.

Is it a Grant or a Loan?

This is a 0% interest second mortgage that must only be repaid if the home is sold, transferred, or when it no longer serves as the homeowner’s primary residence.

What’s Good About this Program?

This program is targeted to a specific location so it could have a smaller applicant pool than other programs, which can increase the likelihood that homebuyers receive assistance. If the homebuyer is looking to purchase in St. Charles, they could end up with $20,000 in assistance.

Town of Normal Downpayment Assistance Program

The Town of Normal Downpayment Assistance Program provides up to $3,000 or 10% of the purchase price, whichever is less, in down payment and closing cost assistance.

Who Is Eligible?

Residents of the Town of Normal who have an annual income that doesn’t exceed the threshold for the number of people in their household are eligible to apply.

What Types of Properties are Eligible?

The home must be located in the Town of Normal and be the homeowner’s primary residence. Manufactured housing is not eligible for the program.

How Does it Work?

Homebuyers should apply for this program through their lender. The homebuyer must maintain a minimum of $1,000 in their bank account after the down payment assistance has been paid.

Is it a Grant or a Loan?

This is a 0% second mortgage that is forgiven at a rate of 20% per year. After year five, the loan is fully forgiven. If the home is sold or refinanced within the first five years, the homeowner will be required to pay back the remaining unforgiven balance.

What’s Good About this Program?

For homebuyers looking to purchase a home in the Town of Normal, it might be easier to qualify for this program than for other statewide programs since the pool of applicants is likely to be smaller.

Village of Romeoville Homebuyer Assistance

Village of Romeoville Homebuyer Assistance provides up to 3% of the first mortgage amount in down payment and closing cost assistance.

Who Is Eligible?

First-time homebuyers or those who haven’t owned a home in the last three years are eligible for this program. Homebuyers must have an annual income that doesn’t exceed the program threshold for the number of people in their household and the location of the home. All applicants must have a minimum credit score of 660.

What Types of Properties are Eligible?

To be eligible for this program, homes must be the homebuyer’s principal residence and meet the maximum purchase price threshold for their location. Homes located in a targeted area can have a maximum purchase price of $404,806 and homes outside targeted areas can have a maximum purchase price of $331,205. Eligible property types include single family homes, townhomes, and condominiums. New and existing construction will be considered.

How Does it Work?

This is a grant offered in conjunction with a 30-year, fixed rate mortgage. Homebuyers interested in this program can apply through a program specialist through the website or through a participating lender.

Is it a Grant or a Loan?

This is a grant. It doesn’t need to be repaid.

What’s Good About This Program?

If you’re looking to purchase a home in the Town of Normal, it might be easier to secure assistance through this program than through one of the statewide programs since the pool of applicants is likely to be smaller.

Chicago Housing Authority Down Payment Assistance Program

The Chicago Housing Authority Down Payment Assistance Program provides up to $20,000 in financial assistance for down payment, closing costs, or to buy down the interest rate on a first mortgage.

Who Is Eligible?

First-time homebuyers or those who haven’t owned a home in the previous three years are eligible for this program. Homebuyers must also be Illinois residents or U.S. citizens, and must either live in or be moving to Chicago.

Homebuyers must have an annual income at or below 80% of area median income for the number of people in their household and have at least $3,000 in their checking account at the time of application. (If a homebuyer is receiving social security benefits, the requirement is $2,000.) If the homebuyer has already paid earnest money toward the home purchase or for an appraisal or inspection reports, those costs can count toward the cash requirement.

What Types of Properties are Eligible?

To be eligible, a home must be located within Chicago city limits; the homebuyer’s principal residence; and one of the following eligible property types: single family home, townhome, condominium, or an owner-occupied two- to four-unit building. If purchasing a multiple unit building, the homebuyer must take a landlord training class.

How Does it Work?

Homebuyers must apply for the program through a participating lender.

Is it a Grant or a Loan?

This is a grant. It doesn’t need to be repaid.

This grant program offers one of the highest levels of assistance in the state of Illinois. It also allows for the purchase of an owner-occupied investment property, so if that’s of interest to you as a homebuyer, and you meet the other eligibility requirements, you could consider this program.

Peoria Down Payment Assistance Program

The Peoria Down Payment Assistance Program provides up to $5,000 in down payment and closing cost assistance for homebuyers purchasing a home in a qualified census tract.

Who Is Eligible?

Residents of Peoria that don’t owe the city any fines, fees, or taxes, who have a signed purchase contract and a pre-approval letter for a mortgage, as well as a closing attorney and closing date, may apply.

What Types of Properties are Eligible?

Only single family homes located in a qualified census tract will be considered. The purchase price must be $125,000 or less and the home must be the homebuyer’s principal residence.

How Does it Work?

Eligible homebuyers can apply for the program through the website.

Is it a Grant or a Loan?

This is a 0% forgivable loan. The loan is forgiven if the homebuyer lives in the home for at least two years after closing.

What’s Good About This Program?

This is a very targeted program so the applicant pool is likely to be small. If you and the property you’re buying are eligible, it’s worth considering.

Community Partners for Affordable Housing

Community Partners for Affordable Housing provide up to $13,999 in financial assistance. The funds can be used for down payment assistance, closing cost assistance, and to buy down the interest rate on the first mortgage.

Who Is Eligible?

First-time homebuyers in Lake County, or those who haven’t owned a home in the last three years, who also have an annual income of less than or equal to 80% of the area median income are eligible to apply.

What Types of Properties are Eligible?

Single-family homes that are located in Lake County and valued at $304,950 or less are eligible. The home must pass a home inspection and any significant repairs must be made prior to closing.

How Does it Work?

Homebuyers must apply for this program with a participating lender. Homebuyers must contribute at least $1,000 of their own money or 1% of the purchase price, whichever is greater.

Is it a Grant or a Loan?

This is a 0% loan, forgiven monthly over the course of five years. Once the homeowner has lived in the home for five years, the loan is fully forgiven. If the house is sold before that time, the homeowner will have to repay the remaining unforgiven balance.

What’s Good About this Program?

This program offers a high level of assistance and is forgiven over a relatively short period of time. This gives the homeowner flexibility in the future plans they can make.

Will County Down Payment Assistance Program

The Will County Down Payment Assistance Program provides up to $25,000 in down payment and closing cost assistance for Will County residents.

Who Is Eligible?

Will County residents are eligible to apply. Other eligibility rules may apply.

What Types of Properties are Eligible?

Contact the program for property eligibility rules.

How Does it Work?

Contact the assistance program for more information.

Is it a Grant or a Loan?

This is a 0% deferred payment loan secured by a second mortgage.

What’s Good About This Program?

This program offers a relatively high level of financial assistance. If a homebuyer wants to purchase a home in Will County, it’s worth considering.

The Bottom Line

For homebuyers looking to purchase in the state of Illinois, there are multiple options for assistance programs. Each program has its own focus and eligibility requirements, which means there are opportunities for many types of buyers. For specific questions about each program, reach out to that program directly.