Grants for Homebuyers

IHDA allocates funds to a network of partners across the state to administer a number of programs to help Illinois first-time homebuyers attain homeownership affordably. Homebuyers can receive:

• Down payment and closing cost assistance
• Down payment, closing costs with funds to rehabilitate their new home; and
• Subordinate loans
  
  Funding for this assistance comes from two resources:
  - HOME Investment Partnerships Program (HOME)
  - Illinois Affordable Housing Trust Fund program
  
  

Down Payment and Closing Cost Assistance

To help potential buyers, the Illinois Affordable Housing Trust Fund program offers low- and very low-income individuals help with down payment and closing cost assistance. Assistance is available in the form of a grant or a loan.

Grant assistance:

Households earning at or below 50 percent of the area median income are eligible for a maximum grant amount of $5,000. Households earning between 51 percent and 80 percent of the area median income (AMI) are eligible for a maximum grant of $3,000. Grants are forgiven monthly over a five-year recapture period.

Subordinate loan assistance:

Households between 51 percent and 80 percent AMI are eligible for a maximum loan amount of $20,000. Households at 50 percent AMI are eligible for a maximum loan amount of $30,000.

Basic Eligibility Requirements:

• Must be a first-time homebuyer
• Household income must be at or below 80 percent of the AMI
• Homebuyer participants must occupy the property as their principal residence
• Homebuyer must contribute at least $1,000 to the purchase
• Homebuyer is required to attend first-time homebuyer counseling
  
  

How to apply:

Homebuyers must contact one of the IHDA-funded down payment and closing cost assistance participating agencies to apply.

Down Payment and Closing Costs with Rehabilitation Assistance

The HOME Investment Partnerships Program (HOME) provides homebuyers with assistance that can be either in the form of acquisition assistance, or a combination of purchase and rehabilitation assistance.

Homebuyers opting for acquisition assistance only can receive up to $10,000 for down payment and up to $2,000 in closing cost assistance to help with the purchase of their first home. Assistance comes in the form of a deferred, forgivable loan at zero-percent interest.

Homebuyers opting for both the acquisition and rehabilitation assistance can receive a maximum of $40,000 in total costs. Work completed on these homes often features repairs to the major systems and focuses on bringing the home up to current minimum housing standards, and in some cases, increasing the energy efficiency of the home. These funds are provided in the form of a forgivable loan, with a portion of the loan amount forgiven each month over a 5- or 10-year term, depending on the direct subsidy to the homebuyer. If the direct subsidy is below $15,000, the loan is forgiven over 5 years. If the loan is between $15,000 and $40,000, the loan is forgiven over 10 years.

Basic Eligibility Requirements:

• Household income must be at or below 80 percent of the AMI
• Homebuyer participants must occupy the property as their principal residence
• Homebuyer must contribute at least $1,000 to the purchase
• Homebuyer is required to attend first-time homebuyer counseling

If rehabilitation assistance is received, additional eligibility requirements include:

• Appraised value of a property after rehabilitation must be under the maximum appraised value ceiling set for a given area
• Rehabilitated single-family properties must meet both federal and state standards for repair
  

The use of HOME funds carries certain restrictions on the use of the assisted property, as well as upon any proceeds realized from the sale of the home. If the homebuyer moves out or sells the home before the allotted time period has expired, a portion of the HOME funds may need to be repaid by the homebuyer.

How to apply:

Homebuyers must contact one of the IHDA-funded homebuyer program participating agencies to apply.

Please note:

Some Illinois cities and counties, called HOME participating jurisdictions, receive federal HOME fund allocations directly from the U.S. Department of Housing and Urban Development (HUD) each year. Homebuyers living in any of the following localities should contact a participating jurisdiction directly.