Best First Time Home Buyer Programs in Illinois

The IHDA Mortgage program is widely regarded as a top choice for first-time homebuyers in Illinois.

When you become a first-time homebuyer, a lot of planning, saving, and calculations go into making a purchasing decision. If money’s tight, tapping into financial assistance through Illinois’ housing development authority and several mortgage lenders in the Prairie State can help you save more while becoming a homeowner. Below, you'll find the best first-time homebuyer programs in Illinois so you can turn your dreams into reality. 

Quick Look: Best First-Time Homebuyer Programs in Illinois

• Best for Down Payment Assistance: IHDA Mortgage
• Best for Closing Cost Assistance: IHDAccess Forgivable
• Best for Deferred Closing Costs: IHDAccess Deferred
• Best for Higher Down Payments: IHDAccess Repayable
• Best for Chicago and Cook County Buyers: Wintrust Community Bank Homebuyer Grant Program
• Best for Residents of Kane County: Kane County First Time Home Buyer Loan Program
• Best for Madison County Residents: Madison County HOMEBuyer Program

Best First-Time Homebuyer Programs in Illinois

Illinois has many programs to help both first-time homebuyers and repeat homebuyers. Here are some of the best options available. 

1. Best for Down Payment Assistance: IHDA Mortgage

Illinois Housing Department Authority (IHDA) offers loans, down payment assistance and closing assistance. The assistance program is structured as a loan that doesn’t have to be repaid. With IHDA mortgages, you can get government-backed loans and 30-year fixed-rate loans.

• Credit score: 640+
• Income limit: Varies by county, $123,480 to $145,560
• Loan limit: $610,939 for one unit or $754,187 for two units

2. Best for Closing Cost Assistance: IHDAccess Forgivable

If you qualify for an IHDAccess Forgivable loan, you can receive 4% of the purchase price or up to $6,000 toward closing costs and a down payment. An IHDAccess Forgivable loan is like a second mortgage. It acts as a second lien on your primary 30-year, fixed-rate mortgage.

You won't have to make additional payments, but you do need to live in the home for at least ten years. If you refinance or sell the house after less than ten years, you must pay back the loan balance.

• Credit score: 640
• Income limit: $97,600 in most counties, up to $114,100 in Kendall County
• Loan limit: $6,000

3. Best for Deferred Closing Costs: IHDAccess Deferred

An IHDAccess Deferred loan is another Illinois Housing Department loan that gives qualifying borrowers up to 5% of the purchase price, with an upper limit of up to $7,500. You can use these fees for closing costs or toward a down payment. You only need to repay the loan when you sell or refinance the property. 

• Credit score: 640
• Income limit: Income limit on one- to two-unit dwellings:$123,480 in most counties, up to $145,560 in Kendall County
• Loan limit: $7,500

4. Best for Higher Down Payments: IHDAccess Repayable

With an IHDAccess Repayable loan, you can get a down payment or closing cost assistance up to 10% of the purchase price or up to $10,000, whichever is less. These interest-free loans act as second mortgages. However, you must make monthly payments over the loan's 10-year life.

• Credit score: 640
• Income limit: One- or two-unit dwellings: $123,480 in most counties, up to $145,560 in Kendall County
• Loan limit: $10,000 or 10%, whichever is less

5. Best for Chicago and Cook County Buyers: Wintrust Community Bank Homebuyer Grant Program

Wintrust Community Bank Homebuyer Grant Program has a downpayment assistance program if that's the only thing standing between you and a new home. You can qualify with just $1,000 or a 1% down payment, whichever is less. 

Wintrust Community Bank can help you qualify for the City Of Chicago Taxsmart Mortgage Credit Certificate (MCC) or the Cook County Homebuyers Assistance program. The information below is about the Cook County Homebuyers Assistance Program.

Available only to first-time homebuyers, the Wintrust Community Bank Homebuyer Grant Program offers a $2,000 grant through nonprofit partners. This program can be paired with local grants, loans and federal and state programs. This amount is granted if you are looking for a house in Cook, DuPage, McHenry, Will, Kane and Lake counties and applies only to buyers of one- or two-unit properties. 

Eligibility requirements: 

• Annual household income must be at or below 80% of the U.S. Department of Housing and Urban Development (HUD) median of the county where the property is located
• Agree to pay $1,000 toward the cost of purchasing a home
• Complete a HUD-approved homebuyer program
• Apply for a five-year loan term on adjustable-rate mortgages
• Agree to a minimum five-year lock period of an initial interest rate 

• Credit score: 620
• Income limit: None stated
• Loan limit: None stated, but you only need a 1% down payment or $1,000, whichever is less.

6. Best for Residents of Kane County: Kane County First-Time Homebuyer Loan Program

Kane County First-Time Homebuyer Program Financial Assistance can help you get down payment assistance and achieve homeownership. The Kane-Elgin HOME Consortium funds this program. The loan offers income-eligible applicants up to $10,000 in assistance funds. You can use it to pay down or close costs. Kane County's programs offer a zero-interest, deferred payment second mortgage that you'll repay to Kane County.

• Credit score: 580+
• Income limit: Varies by household size, from $61,800 for a one-person household to $88,250 for an eight-person household 
• Loan limit: Up to $10,000

7. Best for Madison County Residents: Madison County HOMEBuyer Program

Madison County HOMEBuyer Program offers loans, down payment assistance and/or closing assistance. To qualify for HOMEBuyer Program assistance, your household income must not exceed 80% of the area's median income. You must be a first-time homebuyer purchasing single-family housing that is either an existing or newly constructed home. This can include one- or two-unit housing, a house, apartment or condominium units.

• Credit score: 620+
• Income limit: Varies by household size, from $56,250 for a one-person household to  $106,100 for an eight-person household. 
• Loan limit: $5,000

Best National First-Time Homebuyer Programs

In addition to Illinois-specific homebuyer programs, you can consider national homebuyer programs available for a variety of loan types. Consider these options if you want a national program for loans backed by the Federal Housing Administration (FHA), Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA). 

1. Best National FHA Lender: Rocket Mortgage, formerly Quicken Loans

Created as a response to the 1930s defaults and foreclosures, FHA loans provide affordable, accessible loans to homebuyers and secure insurance to mortgage lenders. This program offers loans to people with low credit scores or lower down payments. 

Eligibility requirements: 

• You must have an employment history or have worked for the same employer for the last two years.
• You must purchase noncancellable mortgage insurance.
• You must pay a 10% down payment for a credit score between 500 and 579 and a 3.5% down payment for a credit score of 580 or higher.
• The borrower must be a legal resident of the U.S. and must have a valid Social Security number.
• Credit score: 500+
• Income limit: None
• Loan limit: Varies by county, usually, up to $498,257 for single-family homes in low-cost areas and up to $1,149,825 in high-cost areas. 

2. Best National VA Lender: Veterans United

Available to military service personnel, veterans, and surviving spouses, VA loans are guaranteed mortgages by the U.S. Department of Veteran Affairs. They offer many benefits, including no down payment, no monthly private mortgage insurance (PMI), competitive interest rates, VA assistance to solve any issues during the purchase process, and property appraisal on your behalf. 

Eligibility requirements: 

• You must be an eligible veteran with recorded service.
• Your debt-to-income ratio should be 41% or lower, depending on several factors.
• You must pose a satisfactory credit risk.
• Stable income record to handle the mortgage payments and necessities.

If you're looking for a VA lender to help get a mortgage, Veterans United offers a customer satisfaction rating of 4.8 out of 5. Veterans United secures comfortable homes for those who served. Looking for someone to back you from start to finish throughout the process of buying a house? Trust extremely knowledgeable and experienced professionals and over 100,000 reviews by veterans who chose Veterans United.    

• Credit score: 620, but in some cases as low as 500
• Income limit: None
• Loan limit: $766,550 for most U.S. counties, up to $1,149,825 for a single-family home in high-cost areas. 

3. Best National USDA Lender: CrossCountry Mortgage

USDA loans are a great initiative by the U.S. Department of Agriculture to provide a home to low-income applicants at 0% down. You’ll get a subsidy and a reduced mortgage payment for a short time. You can only get this loan in rural areas.

Eligibility requirements: 

• You must have a 640 minimum credit score.
• The home you want to buy or refinance must be in an eligible rural or suburban area. 
• You must have a household income under the USDA limit for the area where you want to buy a home. Check your income eligibility with the USDA.

• Credit score: 640+, but borrowers with a lower score can qualify
• Income limit: $110,650 for households with up to four members; $146,050 for households with up to eight members. 
• Loan limit: Varies by county, usually $398,600 to $919,800

Qualification Requirements

First-time homebuyers in Illinois will need to come prepared to facilitate the mortgage closing process. To apply for a mortgage, you will need:

• Government-issued ID
• Social Security number or Individual Taxpayer Identification Number
• Proof of income and employment, including W2s, bank statements and tax returns
• Information on any debt

How to Apply for a Program

To apply for an Illinois first-time homebuyer program, you will need to follow the steps for the individual program you're applying for. 

• You can apply directly on the Illinois government site for the IHDAcess Forgivable, IHDAcess Deferred, or the IHDAcess Repayable loans. 
• You will need to apply with the county for Kane County or Cook County programs.
• For USDA, VA or FHA loans, you can apply directly with your chosen lender(s).

Remember to apply to multiple lenders and that you may qualify for more than one closing cost or down payment assistance program. Consider the best available offers to find what works for you.

Frequently Asked Questions