First-Time Homebuyer Assistance in Illinois: New Savings Programs and Down Payment Grants

Understanding First-Time Homebuyer Assistance in Illinois

Illinois has a strong commitment to helping first-time buyers succeed. Statewide initiatives, local programs, and partnerships with hard money lenders like LBC Capital ensure buyers have access to the financial support they need. By reducing upfront costs, providing forgivable loans, and offering down payment grants, Illinois creates more pathways to homeownership.

Who Qualifies as a First-Time Homebuyer?

In Illinois, a “first-time homebuyer” is typically someone who has not owned a home in the past three years. Even if you previously owned property, you might still qualify if enough time has passed. Programs often include income limits, credit score minimums, and require completion of a homebuyer education course.

IHDA Mortgage Programs: Statewide Opportunities

The Illinois Housing Development Authority (IHDA) offers several mortgage assistance programs, combining affordable financing with cash support. LBC Capital ensures you navigate these options with ease, helping you secure the best fit for your financial goals.

IHDAccess Forgivable

The IHDAccess Forgivable program provides up to 4% of the purchase price, capped at $6,000, as a forgivable loan. This assistance is forgiven monthly over 10 years, provided you continue to live in the home. There are no monthly payments, making it an ideal solution for buyers seeking manageable long-term expenses.

IHDAccess Deferred

IHDAccess Deferred offers up to 5% of the purchase price, up to $7,500, as an interest-free loan. Repayment is deferred until you sell, refinance, or fully repay your mortgage. This program is perfect for buyers expecting income growth over time.

IHDAccess Repayable

This program offers up to 10% of the purchase price (maximum $10,000) as an interest-free loan. Unlike the Forgivable or Deferred options, you repay the loan in equal installments over 10 years. It’s a strong choice if you want to minimize upfront costs while planning for predictable monthly payments.

LBC Capital helps clients determine which IHDA program aligns with their financial needs, ensuring you maximize every dollar of assistance available.

Local and Regional Down Payment Assistance Programs

Beyond state-run programs, local governments in Illinois provide targeted support for buyers purchasing in specific areas.

Chicago Home Buyer Assistance Program

The City of Chicago offers grants covering up to 7% of the total loan amount for down payment and closing costs. To qualify, buyers must meet income guidelines and complete an approved homebuyer education course. LBC Capital partners with trusted organizations in Chicago to streamline your access to these funds.

Cook County Down Payment Assistance Program

Introduced in June 2024, Cook County’s program provides up to $25,000 or 5% of the home purchase price, whichever is less. Assistance can be used toward down payments, closing costs, or mortgage rate buydowns. LBC Capital ensures you understand eligibility requirements and completes the application process efficiently.

Kane County First-Time Homebuyer Program

Kane County offers up to $10,000 in down payment and closing cost assistance through an interest-free loan. Repayment is due only when the home is sold, the title is transferred, or the property is no longer your primary residence. LBC Capital helps clients evaluate county-specific programs to stretch their budgets further.

Federal Home Loan Bank of Chicago: Downpayment Plus® Programs

The Federal Home Loan Bank of Chicago provides additional support through the Downpayment Plus® (DPP®) and Downpayment Plus Advantage® programs. Eligible homebuyers may receive up to $10,000 in forgivable assistance, gradually forgiven over five years. LBC Capital collaborates with participating financial institutions to give you access to these valuable resources.

How DPP Programs Work

To qualify, you must work with a participating lender, complete a homebuyer education course, and meet income guidelines. The funds help with both down payments and closing costs, reducing your out-of-pocket expenses dramatically.

Additional Support Options for First-Time Buyers

In addition to traditional down payment and grant programs, Illinois offers unique initiatives to address specific financial barriers.

SmartBuy Program

The IHDA SmartBuy program offers up to $40,000 to pay off student loan debt, plus an additional $5,000 for down payment and closing costs. By reducing student loan burdens, more buyers can qualify for mortgages and afford homeownership. LBC Capital specializes in helping student-loan-heavy borrowers tap into this innovative program.

Finally Home Program

Administered by the Illinois State Treasurer’s Office, the Finally Home program provides a five-year, 10% mortgage guarantee for buyers with less-than-perfect credit or higher debt-to-income ratios. Participants must contribute at least 3.5% of the home’s purchase price. LBC Capital helps you leverage this guarantee to secure favorable mortgage terms even if your credit history isn’t spotless.

Eligibility Requirements and How to Apply

Navigating eligibility for multiple programs can be complex, but LBC Capital makes it easy.

Common Eligibility Factors

• Income Limits: Many programs set maximum household income limits based on the area’s median income.
• Credit Score Requirements: Most programs require a minimum credit score, typically 640 or higher.
• Primary Residence Requirement: The home must be used as your primary residence.
• Homebuyer Education: Completion of a HUD-approved or program-specific homebuyer education course is required.

How LBC Capital Helps You Apply

Our experienced team ensures you gather all necessary documents, complete pre-approvals, enroll in the required education courses, and apply for maximum assistance. With LBC Capital’s support, you can focus on finding the right home while we handle the heavy lifting behind the scenes.

Why Choose LBC Capital for Your First Home Purchase

LBC Capital provides more than just loans. We deliver a seamless, supportive experience, starting with pre-approval and continuing through closing day. Our personalized service, deep knowledge of Illinois programs, and access to competitive rates make us the premier choice for first-time buyers.

We ensure you:

• Maximize grant and loan opportunities.
• Understand every program’s benefits and obligations.
• Complete applications correctly and on time.
• Secure the best mortgage solution for your financial situation.

Reach out to LBC Capital today and discover how affordable your first home purchase can be. Your future starts with the right partner—and with LBC Capital, your journey to homeownership is in the best hands.