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2022 Illinois First-Time Homebuyer Programs

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The state of Illinois offers first-time homebuyers a substantial amount of help with their down payment and even opens up these programs to repeat buyers. In this article, we’ll go through some of the statewide homebuyer assistance programs and how you may be able to qualify. An important note: For some programs, you may need to live in the home for a certain period of time to get the full benefits.

Illinois statewide and local first-time homebuyer programs

Illinois offers down payment assistance programs to first-time homebuyers and repeat buyers alike through the Illinois Housing Development Authority (IHDA). You’ll need to take out an IHDA first mortgage to be eligible for the second mortgage programs.

Program nameAssistance amountAssistance typeWhere it’s available
IHDA MortgageUp to purchase price limits by countyFirst mortgageStatewide
IHDAccess Forgivable4% of purchase price, up to a maximum of $6,000Forgivable second mortgage for down payment assistanceStatewide
IHDAccess Deferred5% of purchase price, up to a maximum of $7,500Deferred second mortgageStatewide
IHDAccess Repayable10% of purchase price, up to a maximum of $10,000Interest-free second mortgageStatewide

What to know about different types of down payment assistance

Illinois offers three of the most common types of down payment assistance loans. All are structured as a second mortgage, but the terms of how you repay them are different.

  • Forgivable loan. The IHDAccess Forgivable is a second mortgage that you don’t need to make payments on. Instead, it is forgivable over 10 years — meaning that each month you live in the home, a portion of the balance is wiped away. If you sell or refinance the home before the 10 years have passed, you’ll need to pay back the balance of the loan.
  • Deferred loan. These loans, including the IHDAccess Deferred, do not require monthly payments as long as you live in the home. Generally, they are repaid in full when the first mortgage is paid off (including if you sell or refinance your loan).
  • Interest-free loan. The IHDAccess Repayable loan must be paid back with monthly payments over 10 years, but Illinois does not charge interest on the loan.

If you search down payment assistance programs in other states, you may also find traditional second mortgages that do charge interest and, in some cases, grants that do not need to be repaid.

How Illinois first-time homebuyer programs work

The way you get a loan through the Illinois first-time homebuyer program is similar to the way you’d get any other mortgage, though there may be some more paperwork.

However, you should also keep in mind the requirements to enjoy the full down payment assistance amount. For example, you’ll need to live in your home for 10 years to get full loan forgiveness under the IHDAccess Forgivable program. In rare cases, you may also be subject to a “recapture tax” if you move out of the home too quickly, but IHDA promises to reimburse you if you are required to pay this.

Here is the general process, as spelled out by the Illinois Housing Development Authority.

Step 1: Find an approved IHDA lender

Only lenders approved by the Illinois Housing Development Authority are permitted to originate IHDA loans that qualify for down payment assistance. You can search for an IHDA lender in your area on the IHDA Mortgage website.

Step 2: Get prequalified

A loan officer at the lender you select will ask you to submit information on your finances to see which programs you may qualify for and how much you could borrow — as well as the interest rate and fees you would face. You may choose to take this step with several different lenders to see where you can get the best deal.

Step 3: Take a homebuyer education course

The Illinois Housing Development Authority requires you to take a homebuyer education course before you can close on your loan. The course you take must meet standards set by the federal Department of Housing and Urban Development (HUD) or the National Industry Standards for Homeownership Education and Counseling. You can search for a course on the IHDA website here.

Step 4: Search for a home

With your prequalification letter in hand, you can shop for a home in your price range with reasonable confidence that you will ultimately be approved for the home. You may want to hire a realtor to help you navigate the process of putting in offers, negotiating with home sellers and ultimately getting the home inspected and appraised once your offer is accepted.

Step 5: Finish your loan application

With a contract to purchase, your IHDA lender will finish getting the information needed for your full loan application and send it to underwriting to make sure you are fully qualified for the mortgage. Your lender is responsible for making sure you fit all the criteria for the IHDA programs, including that you fall below income limits and credit score requirements.

Step 6: Close on the loan

At the closing table, you’ll sign a stack of documents and finally get the keys to your new home.

Illinois first-time homebuyer program requirements

The qualifying criteria are similar for each of the state’s first-time homebuyer programs.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
IHDA Mortgage64045%$102,000 in most counties, a range in others; up to $128,760 in Kendall CountyUnknown
IHDAccess Forgivable64045%$102,000 in most counties, a range in others; up to $128,760 in Kendall County10 years for full loan forgiveness
IHDAccess Deferred64045%$102,000 in most counties, a range in others; up to $128,760 in Kendall CountyUnknown
IHDAccess Repayable64045%$102,000 in most counties, a range in others; up to $128,760 in Kendall CountyUnknown


Like most states, Illinois requires homebuyers to fall below household income limits to take part in its first-time homebuyer programs. These limits vary based on the county where you live. Currently, income limits are as follows:

  • Most counties: $102,000
  • Menard, Sangamon counties: $102,600
  • Champaign, Ford, Piatt counties: $103,680
  • DeKalb County: $105,120
  • Grundy County: $108,360
  • Cook, DuPage, Kane, Lake, McHenry, Will counties: $111,840
  • McLean County: $114,360
  • Kendall County: $128,760

Many programs base their income limits on the area median income. You can look up your county’s median income with HUD’s median income family lookup tool.

National first-time homebuyer programs

The Illinois Housing Development Authority’s mortgages fall into one of four categories: conventional, Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) or U.S. Department of Agriculture (USDA) loans. These loan programs aren’t specific to first-time homebuyers. To qualify for assistance, you generally need to meet the criteria for one of these loan programs, including credit scores, as well as IHDA’s rules.

Conventional loans. Conventional loans are the most common type of mortgage and offer borrowers the ability to buy a home with as little as 3% down. Credit scores as low as 620 may be accepted (though IHDA requires a score of 640). Conventional loans are not part of a government program.

FHA loans. FHA loans have more lenient qualifying criteria, making them popular with first-time homebuyers. You can get an FHA loan with a credit score as low as 500, though you’ll need a 10% down payment. You can put down as little as 3.5% with a credit score of 580 or higher.

VA loans. VA loans offer military service members and veterans the ability to buy a home without a down payment. These loans also do not have a specific credit score needed to qualify; lenders look at the borrower’s overall financial picture to make sure they can afford the loan instead.

USDA loans. This U.S. Department of Agriculture program helps low- and moderate-income families buy homes in rural areas. You can get a USDA loan with no down payment, but you’ll need to fall below income limits.

FAQs about Illinois’ first-time homebuyer programs

Who qualifies as a first-time homebuyer in Illinois?

While many states require people to be first-time homebuyers to qualify for assistance, Illinois currently does not for its down payment programs. A first-time homebuyer is someone who has not had an ownership interest in their primary residence in the last three years, according to HUD’s definition.

Can I qualify for down payment assistance in Illinois?

To qualify for down payment assistance, you’ll need to check a few boxes first. You must:

  • Have a credit score of at least 640
  • Take a homebuyer education course
  • Get a first mortgage through IHDA
  • Have a debt-to-income ratio of 45% or below
  • Fall below income limits

How much of a down payment do I need to buy a house in Illinois?

The Illinois Housing Development Authority’s down payment assistance programs can provide as much as $10,000 toward the cash you’ll need to close. However, you’ll still need to put down $1,000 of your own money or 1% of the purchase price — whichever is higher.

Home price trends in Illinois’ major areas

Median home prices in the state of Illinois fall below $150,000 in many parts of the state, according to data from the National Association of Realtors. These prices are rising, but more slowly than in many parts of the country: around 5% to 10% year over year (from the second quarter of 2020 to the second quarter of 2021) in many areas.

In Cook County, home to Chicago, the median home price increased 7% to $284,509. This translates to a monthly mortgage payment of $1,080, which is up $42 year over year. In Will County, the median home price is $273,843, up 7% year over year. This translates to a monthly mortgage payment of $1,039, up $39.


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