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Illinois First-Time Homebuyer Programs

There’s plenty to love about Illinois, from the wide open grasslands to the shiny skyscrapers and gooey deep-dish pizza of Chicago.

If you plan to buy your first house in the Prairie State, Illinois offers several programs that can help first-time homebuyers who can’t quite come up with enough cash for a down payment.

One program provides down payment assistance loans to first-time homebuyers that are forgiven if they stay in the home for five years. Illinois also offers three other programs that provide forgivable, deferred and repayable loans to help cover down payments for both first-time and repeat homebuyers.

Each program has slightly different qualifying criteria. The first-time homebuyer program applies only to existing homes in certain counties, while the other programs include new construction and existing homes across the entire state.

In January 2019, we researched first-time homebuyer programs in Illinois. This included a review of the Illinois Housing Development Authority website and other state resources. Here’s what first-time homebuyers in Illinois need to know.

In this guide, we will cover:

Illinois first-time homebuyer programs

The Illinois Housing Development Authority oversees statewide programs dedicated to creating and retaining affordable housing. The agency offers several programs to help first-time homebuyers and others purchase homes.

It also helps current homeowners keep their homes if they run into trouble making mortgage payments. In addition to its new purchase programs, IHDA also offers a program called I-Refi that uses federal funds to help homeowners who are struggling to stay in their homes but have managed to stay current. The program contributes up to $50,000 to help homeowners pay down their mortgages and refinance them into more affordable loans.

Eligibility for Illinois assistance

Homebuyers who wish to use one of the Illinois assistance programs must be Illinois residents with a credit score of at least 640. They must also have a household income that falls below a certain threshold, which varies by county but is generally between $78,000 and $114,000.

The home they wish to buy also must fall beneath a certain purchase price, which also varies by county but has a maximum of $336,706 for one unit.

1st HomeIllinois

The 1st HomeIllinois program offers up to $7,500 in down payment assistance as a forgivable loan to help first-time homebuyers and military veterans purchase a home. You must live in the home for five years to get full forgiveness of the down payment loan. If you sell your home in the first five years of ownership, you must pay back a prorated portion of the loan.

Features

The 1st HomeIllinois program offers:

  • $7,500 in cash assistance for down payment and/or closing costs.
  • A fixed-rate 30-year mortgage with a competitive interest rate.
  • A choice of a conventional, FHA, VA or USDA loan.

Eligibility

In order to participate in the program, you must:

  • Be either a veteran or a first-time homebuyer. This is defined as not having owned a home in the past three years, unless you are purchasing a home in a federally designated targeted area.
  • Buy an existing single-family home or duplex.
  • Be located in one of the following Illinois counties: Cook, Marion, St. Clair or Winnebago.
  • Contribute the greater of either $1,000 or 1% of the purchase price toward the purchase of the home.
  • Not exceed maximum income and purchase price limits set by the state of Illinois.
  • Have a credit score of 640 or higher.
  • Complete a homeownership counseling program online or in person.
  • Move into and live in the home as your main residence.

How it works

Homebuyers who want to apply for the 1st HomeIllinois program must contact one of more than 165 IHDA-approved lenders to start the process.

Using your income information and other financial details, the lender will help you figure out whether you qualify for 1st HomeIllinois or another IHDA program. To help streamline the process, IHDA does not have much involvement until your loan closes.

Learn More

IHDAccess Forgivable

The IHDAccess Forgivable program also offers down payment assistance as a forgivable loan, but this program is available to both first-time homebuyers and repeat homebuyers.

You must live in the home for 10 years to have the down payment assistance loan forgiven completely. A portion of the loan is forgiven each month, and if you sell your home within the first 10 years, you must pay back the prorated portion of the loan.

Features

The IHDAccess Forgivable program offers:

  • 4% of the purchase price of the home, up to $6,000, to help with down payment and/or closing costs.
  • A fixed-rate 30-year mortgage with a competitive interest rate.
  • Compatibility with any type of mortgage, including FHA, VA, USDA and Fannie Mae HFA Preferred.

Eligibility

Borrowers must:

  • Fall within income and purchase price limits set by the state of Illinois.
  • Have a credit score of 640 or higher.
  • Buy an existing home or build a new one in the state of Illinois.
  • Contribute either $1,000 or 1% of the purchase price, whichever amount is greater, toward the purchase of the home.
  • Complete a homeownership counseling program online or in person.
  • Move into and live in the home as your main residence.

How it works

Homebuyers who want to apply for the IHDAccess Forgivable program can contact an IHDA-approved lender to start the process.

Using information on your income and other financial details, the lender will check your credit and help you figure out whether you qualify for IHDAccess Forgivable or another IHDA program. To expedite the loan process, IHDA has little involvement until your loan closes.

Learn More

IHDAccess Deferred

The IHDAccess Deferred program offers down payment assistance as a zero-interest, deferred loan to help both first-time homebuyers and repeat homebuyers. You don’t repay the down payment loan until you sell your home, refinance or pay off your mortgage.

Features

The IHDAccess Deferred program offers:

  • A deferred, no-interest loan that’s equal to 5% of the purchase price of the home, up to $7,500, to help with down payment and/or closing costs.
  • A fixed-rate 30-year mortgage at a competitive interest rate.
  • Compatibility with any type of mortgage, including FHA, VA, USDA and Fannie Mae HFA Preferred.

Eligibility

Borrowers must:

  • Fall within Illinois income and purchase price limits.
  • Have a credit score of 640 or higher.
  • Buy an existing home or build a new one in any Illinois county.
  • Contribute either $1,000 or 1% of the purchase price, whichever amount is greater, toward the purchase of the home.
  • Complete a homeownership counseling program online or in person.
  • Move into and remain in the home as their main residence.

How it works

Homebuyers who want to apply for the IHDAccess Deferred program can contact an IHDA-approved lender to start the process.

The lender will go over your financial details, check your credit and help you figure out whether you qualify for IHDAccess Deferred or another IHDA program. The lender then reserves the IHDA funds. To help the process move more quickly, IHDA does not get involved further until your loan closes.

Learn More

IHDAccess Repayable

The IHDAccess Repayable program offers down payment assistance as a zero-interest loan to help both first-time homebuyers and repeat homebuyers. You repay the loan with monthly payments spread out over 10 years.

Features

The IHDAccess Repayable program offers:

  • A repayable no-interest loan equal to 10% of the purchase price of the home, up to $10,000, to help with down payment and/or closing costs.
  • A fixed-rate 30-year mortgage with a competitive interest rate.
  • Compatibility with any type of mortgage, including FHA, VA, USDA and Fannie Mae HFA Preferred.

Eligibility

Borrowers must:

  • Fall within state income and purchase price limits.
  • Have a credit score of 640 or higher.
  • Buy an existing home or build a new home in any Illinois county.
  • Contribute either $1,000 or 1% of the purchase price, whichever amount is greater, toward the purchase of the home.
  • Complete a homeownership counseling program online or in person.
  • Move into and live in the home as your main residence.

How it works

Homebuyers who want to apply for the IHDAccess Repayable program can contact an IHDA-approved lender to start the process.

The lender will go over your financial details, check your credit and help you figure out whether you qualify for IHDAccess Repayable or another IHDA program. IHDA does not have much involvement in the homebuying process until your loan closes.

Learn More

National first-time homebuyer programs

If you want to buy a home in Illinois, you’re not limited to Illinois first-time homebuyer programs. There also are other programs available to help first-time homebuyers across the country. If you’re interested in learning about national programs, start by checking out our guide to first-time homebuyer programs nationwide.

 

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