First-Time Buyer Assistance in Chicago & Illinois: Real Programs That Can Help With Down Payments and Closing Costs

Buying your first home can feel exciting, confusing, expensive, and slightly like trying to assemble IKEA furniture without the little cartoon man helping you.

You find a house you like.

You picture yourself living there.

You start mentally placing furniture.

Then the lender starts talking about down payments, closing costs, prepaid taxes, insurance, credits, grants, income limits, loan programs, and suddenly you’re wondering if renting forever and becoming emotionally attached to your landlord’s bad paint choices might be easier.

Good news: there are real programs in Chicago and Illinois that may help eligible buyers with down payment and closing cost assistance.

Some programs are grants.

Some are forgivable loans.

Some are deferred loans.

Some need to be paid back later.

And some run out of money quickly, because apparently even assistance programs have the same energy as concert tickets.

So let’s break this down in plain English.

What Is Buyer Assistance?

Buyer assistance is money that may help qualified buyers cover some of the upfront costs of buying a home.

That can include:

• Down payment

• Closing costs

• Prepaid expenses

• Mortgage-related costs

• Sometimes even interest rate buy-downs, depending on the program

But here’s the big thing to understand:

Not every assistance program works the same way.

Some money is forgiven over time.Some money has to be repaid when you sell or refinance.Some money is only available in certain areas.Some programs have income limits.Some require homebuyer education.Some are only available through approved lenders.

Translation: please do not read one headline about “free money” and immediately start shopping for a kitchen island the size of O’Hare.

You still have to qualify.

The Big Chicago Program Right Now: HomeGrown Purchase Assistance

One of the most talked-about programs right now is the Chicago HomeGrown Purchase Assistance Program.

This program was created to help eligible buyers purchase a home in the City of Chicago by providing financial assistance for down payment and closing costs.

Depending on the buyer’s income and where the property is located, eligible buyers may qualify for assistance of up to:

• $70,000 in Zone A

• $50,000 in Zone B

Yes, that is a very real number.

No, it does not mean everyone automatically gets that amount.

This program has rules.

Generally, eligible buyers must:

• Buy in the City of Chicago

• Use the home as their primary residence

• Complete homebuyer education counseling

• Meet income and mortgage requirements

• Purchase an eligible one- or two-unit property

• Contribute some of their own funds

• Occupy the property as their primary residence for the required period

This could be a big deal for buyers who are close to being ready but need help with the cash needed to close.

In normal language: this program may help buyers who can afford the monthly payment but need help getting over the upfront cost mountain.

And yes, that mountain is wearing a tiny hat labeled “closing costs.”

IHDAccess Home: Up to $15,000 in Assistance

The Illinois Housing Development Authority, also known as IHDA, offers mortgage programs that may help eligible buyers across Illinois.

One option is IHDAccess Home.

This program may provide:

• 6% of the purchase price

• Up to $15,000

• Assistance for down payment and closing costs

• A deferred second mortgage

• No monthly payment on the assistance loan

Deferred means the buyer generally does not make monthly payments on that assistance. Instead, repayment is typically due later, such as when the home is sold, refinanced, or the mortgage is paid off.

This can be helpful for buyers who need help getting to the closing table without adding another monthly bill right away.

IHDAccess Forgivable: Up to $6,000

Another IHDA option is IHDAccess Forgivable.

This program may provide:

• 4% of the purchase price

• Up to $6,000

• Assistance for down payment and closing costs

• Forgiveness over 10 years

This means the assistance can be forgiven over time if the buyer follows the program rules.

The important words here are “over time.”

It is not Monopoly money.

It is not “take the money and move to Miami next Tuesday” money.

There are conditions.

But for eligible buyers who plan to stay in the home, this can be a helpful option.

IHDAccess Deferred: Up to $7,500

IHDAccess Deferred may provide:

• 5% of the purchase price

• Up to $7,500

• Assistance for down payment and closing costs

• A deferred loan

• No monthly payment on the assistance loan

Like other deferred programs, repayment is usually due later, often when the buyer sells, refinances, or pays off the mortgage.

This can help reduce the upfront cash needed to buy.

And let’s be honest: upfront cash is usually where buyers start sweating like they just opened a Cook County tax bill.

IHDAccess Repayable: Up to $10,000

IHDAccess Repayable may provide:

• 10% of the purchase price

• Up to $10,000

• Assistance for down payment and closing costs

• A zero-interest second mortgage

• Monthly repayment over 10 years

This can still be helpful, but buyers need to understand that it does add a monthly repayment.

So the question is not just, “Can this help me close?”

The question is also, “Does the monthly payment still make sense after everything is added together?”

Because the goal is not just to buy the home.

The goal is to buy the home and still be able to afford groceries, utilities, gas, insurance, and the occasional emotional support pizza.

FHLBank Chicago Downpayment Plus

Another program worth knowing about is Downpayment Plus through FHLBank Chicago.

This program provides assistance through participating member lenders.

Eligible households may receive up to:

• $10,000

The money can help with down payment and closing costs.

A few important points:

• It is for income-eligible homebuyers.

• It is generally for households at or below 80% of area median income.

• It is offered through participating lenders.

• Funds are limited and available while they last.

• The grant is generally forgiven over a five-year retention period.

This is one of those programs where the lender matters.

Not every lender participates.

So if one lender says, “We don’t offer that,” it does not always mean the program does not exist.

It may just mean you are not talking to a participating lender.

Real estate is fun like that.

FHA Loans: Not Assistance, But Still Important

FHA loans are not down payment assistance.

But they are still important for first-time buyers because they can make buying more accessible for people who may not qualify for certain conventional loan options.

FHA loans may allow a lower upfront contribution than many buyers expect, and they can be used on one- to four-unit properties.

That matters for buyers interested in house hacking.

House hacking is when you buy a multi-unit property, live in one unit, and rent out the others.

Also known as: “Dear tenants, thank you for helping with this mortgage. I appreciate your service.”

FHA loans still have rules. The buyer must qualify. The property must qualify. The numbers must work.

But for some buyers, FHA can be a realistic path into ownership.

Chicago TaxSmart: A Tax Credit Program Buyers Should Know About

Chicago also has a program called TaxSmart.

This is not money handed to you at closing.

Instead, TaxSmart is a Mortgage Credit Certificate program that may allow eligible buyers to claim a federal income tax credit for a portion of the mortgage interest paid.

That could potentially help reduce the buyer’s overall tax burden.

The key word is “potentially,” because tax situations are personal.

Buyers should talk to a lender and a tax professional before assuming exactly how much it will help.

Because tax credits are great.

Tax confusion is not.

CHA Down Payment Assistance

The Chicago Housing Authority also has a Down Payment Assistance Program.

According to CHA, eligible CHA residents may qualify for a $20,000 grant, while eligible non-CHA participants may qualify for a $10,000 grant.

The money may be used for down payment, reducing the loan amount, or closing costs.

The grant is generally forgiven after 10 years of living in the home.

This program has specific eligibility requirements, including property location and first-time homebuyer requirements, so buyers should carefully review the current rules.

Cook County Down Payment Assistance: Watch the Funding Status

Cook County has also offered a Down Payment Assistance Program.

When funded, the program may provide assistance of 5% of the sale price, up to $25,000.

However, buyers need to check the current funding status before relying on it.

Some programs exist on paper but may be paused, closed, or out of funds at certain times.

That is why buyers should not build an entire purchase plan around a program until a lender or program administrator confirms that funds are currently available.

Real estate rule: “I saw it online” is not the same thing as “we have approval and the money is reserved.”

Can Buyers Combine Assistance Programs?

Sometimes, yes.

Some programs may be combined with other programs, lender credits, seller credits, or specific mortgage products.

But it depends on:

• The buyer’s income

• The buyer’s credit profile

• The property location

• The loan type

• The lender

• The program rules

• Whether funds are still available

• Whether the buyer completes required education or counseling

This is why buyers should not try to figure this out alone at midnight with 17 browser tabs open and one eye twitching.

The right lender and real estate broker can help identify which options may realistically work.

Who Should Look Into These Programs?

These programs may be worth exploring if you are:

• A first-time buyer

• Buying in Chicago or elsewhere in Illinois

• Trying to reduce the upfront cash needed to close

• Planning to live in the home as your primary residence

• Interested in a single-family home, condo, townhome, or small multi-unit property

• Unsure whether buying is realistic

• Tired of paying rent and watching your landlord call gray paint “luxury”

Even if you are not sure you qualify, it may still be worth checking.

A lot of buyers assume they are not ready before they ever talk to anyone.

Sometimes they are right.

Sometimes they are closer than they think.

The Big Warning: These Programs Change Fast

Buyer assistance programs can change quickly.

Funds can run out.

Income limits can change.

Lenders can stop offering certain programs.

Program rules can update.

Property eligibility can vary.

A buyer may qualify for one program but not another.

A property may qualify for one program but not another.

So before you fall in love with a house or a grant amount, get properly pre-approved and confirm what is actually available right now.

The goal is not just to find assistance.

The goal is to build a smart, realistic buying plan.

Final Thoughts

Buying your first home in Chicago or the suburbs can feel overwhelming.

Between prices, interest rates, property taxes, insurance, closing costs, and the fact that every decent house seems to have 42 people trying to see it before lunch, it is easy to feel stuck.

But there are real programs that may help eligible buyers with the upfront costs of purchasing a home.

Some are city programs.

Some are state programs.

Some are lender-based programs.

Some are grants.

Some are loans.

Some are forgivable.

Some need to be repaid later.

The key is knowing what exists, what is currently funded, what you may qualify for, and how it fits into your full buying plan.

If you are thinking about buying your first home in Chicago or anywhere in the Chicagoland area, let’s run the numbers and see what options may be available.

You may have more options than you think.

And you definitely do not need to figure it all out alone while stress-eating shredded cheese directly from the bag.

Jason Rosenberg The Rosenberg Group @ Infiniti Properties

Full-Service Real Estate. Lower Commission. Better Results.Serving Chicago and all Chicagoland suburbs

Sources Used

City of Chicago — HomeGrown Purchase Assistance ProgramNHS Chicago — HomeGrown Purchase Assistance GrantsThe Resurrection Project — HomeGrown Purchase Assistance ProgramIllinois Housing Development Authority — IHDA Mortgage ProgramsIHDA Mortgage — Homebuyer CenterFHLBank Chicago — Downpayment Plus ProgramChicago Housing Authority — Down Payment Assistance ProgramCity of Chicago — TaxSmart Mortgage Credit Certificate ProgramCook County — Down Payment Assistance ProgramU.S. Department of Housing and Urban Development — FHA Loan Information