First-time home buyer programs in Illinois: assistance, loans and real costs
Illinois has the second-highest effective property tax rate in the country, so a first-time buyer’s escrow payment in Cook or the collar counties can add 30% to 40% on top of principal and interest — the IHDA assistance helps at closing, not with that. Everything else on this page — the agency programs, the tax credit, the closing costs — sits on top of that fact.
| State housing agency | Illinois Housing Development Authority (IHDA) |
|---|---|
| Median home price (approx.) | $270,000 — statewide order of magnitude; metros differ |
| 3.5% / 5% / 20% down | $9,450 / $13,500 / $54,000 on the median |
| Property tax (effective) | about 2.08% — roughly $5,616 a year on the median |
| Mortgage credit certificate | Not consistently offered — ask a lender |
| Transfer tax | Illinois charges a state transfer tax of $0.50 per $500 (0.1%) and counties $0.25 per $500, generally paid by the seller; Chicago adds $5.25 per $500, of which the buyer customarily pays $3.75 per $500 (0.75%), and many suburbs levy their own. |
State programs for first-time buyers in Illinois
The Illinois Housing Development Authority’s IHDAccess programs — Forgivable, Deferred and Repayable — pair a 30-year fixed first mortgage with three different assistance structures; Opening Doors serves specific populations, and SmartBuy (when funded) pays down student debt for buyers. Chicago and Cook County add local programs.
The down payment help, and how it must be repaid
IHDAccess Forgivable provides 4% of the price up to $6,000, forgiven over ten years; IHDAccess Deferred provides 5% up to $7,500 at 0%, due on sale; IHDAccess Repayable provides 10% up to $10,000 repaid over ten years. All require an IHDA first mortgage.
Every assistance dollar comes in one of four shapes — grant, forgivable, deferred or repayable — and the shape decides what it costs you over ten years. Get it in writing before you apply. See how down payment assistance programs work.
The MCC: a federal tax credit for the life of the loan
IHDA does not currently issue Mortgage Credit Certificates statewide; some local agencies have offered them in the past, so ask an IHDA-approved lender.
Income and purchase price limits
IHDA income and purchase price limits vary by county (higher in the Chicago metro and targeted areas); a 640 minimum credit score, a $1,000 or 1% minimum contribution and homebuyer education are required. Programs are open to repeat buyers.
Closing costs, transfer taxes and who pays them in Illinois
Illinois charges a state transfer tax of $0.50 per $500 (0.1%) and counties $0.25 per $500, generally paid by the seller; Chicago adds $5.25 per $500, of which the buyer customarily pays $3.75 per $500 (0.75%), and many suburbs levy their own.
Outside Chicago, buyer closing costs run about 2% to 3%; in Chicago the buyer’s transfer tax share and attorney fees push costs higher. Illinois uses attorneys at closing and property taxes are paid in arrears, producing large tax prorations. For the line-by-line, see closing costs explained and seller concessions limits.
Worked example: buying the median home in Illinois
The numbers below assume Illinois’s approximate median price of $270,000 and a 6.5% rate chosen for illustration, not quoted. Property tax is estimated from the state’s effective rate of about 2.08% — $5,616 a year at this price — and will differ by county. Add homeowners insurance and, below 20% down, mortgage insurance.
| Structure | Down payment | Loan amount | P&I at 6.5% (30 yr) | Property tax / mo (est.) |
|---|---|---|---|---|
| FHA, 3.5% down | $9,450 | $260,550 | $1,647 | $468 |
| Conventional, 5% down | $13,500 | $256,500 | $1,621 | $468 |
| Conventional, 20% down (no PMI) | $54,000 | $216,000 | $1,365 | $468 |
Illustrative rate and approximate state figures — not an offer or a quote. Full payment tables cover $150,000 to $800,000 at 5% to 8%; the affordability guide explains how lenders size the loan.
Frequently asked questions
Does Illinois have down payment assistance for first-time buyers?
IHDAccess Forgivable provides 4% of the price up to $6,000, forgiven over ten years; IHDAccess Deferred provides 5% up to $7,500 at 0%, due on sale; IHDAccess Repayable provides 10% up to $10,000 repaid over ten years. Amounts and structures are updated regularly; treat the figures here as the shape of the program and verify the current numbers with the agency.
Is there a first-time home buyer tax credit in Illinois?
IHDA does not currently issue Mortgage Credit Certificates statewide; some local agencies have offered them in the past, so ask an IHDA-approved lender. A Mortgage Credit Certificate is a federal income tax credit, claimed each year on your return, not cash at closing.
What are typical closing costs when buying a house in Illinois?
Outside Chicago, buyer closing costs run about 2% to 3%; in Chicago the buyer’s transfer tax share and attorney fees push costs higher. Illinois uses attorneys at closing and property taxes are paid in arrears, producing large tax prorations. Illinois charges a state transfer tax of $0.50 per $500 (0.1%) and counties $0.25 per $500, generally paid by the seller; Chicago adds $5.25 per $500, of which the buyer customarily pays $3.75 per $500 (0.75%), and many suburbs levy their own.
Related guides
- How much house can I afford? The math lenders actually use
- FHA vs conventional for a first-time buyer: which loan wins, and when
- 3% down conventional loans: HomeReady, Home Possible and Conventional 97
- Pre-approval vs pre-qualification: what sellers actually respect
Same state, other questions: hard money rules in Illinois · foreclosure in Illinois.