The main Chicago first-time homebuyer programs are IHDA's Access down payment help and the city's TaxSmart tax credit. You get IHDA help through an IHDA-approved lender, not on your own. TaxSmart needs HUD-approved, in-person counseling and a home inside Chicago. Rules and amounts change, so confirm with your lender before offering.
Chicago First-Time Homebuyer Programs and How They Work
What Chicago first-time homebuyer programs are available?
The two big Chicago first-time homebuyer programs are the Illinois Housing Development Authority (IHDA) Access down payment help and the City of Chicago's TaxSmart tax credit. You get IHDA help through an IHDA-approved lender, not by applying on your own. TaxSmart is a potential federal tax credit for homes inside the city, and it requires HUD-approved, in-person counseling. Amounts and rules change, so confirm everything with your lender before you make an offer.
Key Takeaways
- IHDA Access Home is described as help equal to 6% of the purchase price, up to $15,000, for down payment and closing costs.
- IHDA's other Access options are a forgivable option (4% up to $6,000), a deferred option (up to $7,500), and a repayable option (up to $10,000), and each one has different payback rules.
- You do not apply to IHDA on your own; you work through an IHDA-approved lender and tell them you want an IHDA mortgage.
- Chicago's TaxSmart credit only applies to homes inside the City of Chicago, and the counseling certificate has to be ready when you apply for the credit during your mortgage process.
- Most programs define a first-time buyer as someone who has not owned a principal residence in the past three years, and that check applies to you and your spouse.
If you're a Chicago first-time homebuyer, the hardest part is often not the house. It's the money questions. Which program? Who do I call? What do I do first?
That confusion makes sense. The programs have different names, different rules, and different people running them. I'm a teacher at heart, so let me walk you through what each one does and what to do before you tour a single home.
How does IHDA help a Chicago first-time homebuyer with a down payment?
IHDA gives down payment and closing cost help through its Access programs, and you get it by pairing it with an IHDA mortgage from an approved lender. The help is for down payment and closing costs. It is not free cash to spend however you like.
What are the IHDA Access options?
There are four versions. They differ in size and in what you owe later. Here is how IHDA describes them:
| Program | Assistance | How it works |
|---|---|---|
| Access Home | 6% of the purchase price, up to $15,000 | Paired with an IHDA mortgage for down payment and closing costs |
| Access Forgivable | 4% of the purchase price, up to $6,000 | Forgiven monthly over 10 years |
| Access Deferred | Up to $7,500 | 0% deferred loan, generally due at maturity, or sooner if you sell, refinance, or pay off the mortgage |
| Access Repayable | Up to $10,000 | 0% loan repaid over 10 years |
You can find the forgivable details on IHDA's information page for real estate professionals, and the deferred and repayable details in IHDA's homebuyer FAQ.
Look past the headline number. A bigger amount is not always the better deal. Ask how long you expect to stay in the home, then compare that to the 10-year timelines. Also ask your lender what you would owe if you sold earlier than planned. For Access Home, ask your lender exactly how repayment works for your loan.
Who counts as a first-time buyer?
Generally, a first-time buyer is someone who has not owned a principal residence in the past three years. IHDA says the borrower and spouse generally must be first-time buyers or qualify for an exemption. You can read the rules on IHDA's page on getting an IHDA loan.
This one trips people up. Maybe you owned a place years ago, or your spouse did. Check each person with the lender early. Some programs have exemptions, and you want to know that before you fall in love with a home.
How do you actually apply?
You start with the lender, not the program. IHDA's FAQ says to pick a participating lender and tell them you want an IHDA mortgage. Here is the order I like:
- Compare a few IHDA-approved lenders.
- Ask them specifically about the current IHDA Access products.
- Complete the lender's pre-approval.
- Have the lender check your income, credit, purchase price, how you'll occupy the home, and the property type.
- Only then start writing offers.
That last step matters. Not every property type or loan setup fits every program. If you're eyeing a condo or a two-flat, ask the lender whether that property is eligible before you offer. IHDA also requires a minimum contribution from you as the buyer. Ask your lender for the exact amount, and see my post on how much cash it takes to buy a home in Chicago to plan for the rest.
What is Chicago's TaxSmart credit, and can you use it with IHDA?
TaxSmart is a Mortgage Credit Certificate (MCC) that can give qualifying buyers a federal income tax credit. The home must be inside the City of Chicago, and you must meet the income and purchase price limits. The City of Chicago Department of Housing runs it.
What do you need to qualify?
- A Chicago home. Buying in the suburbs or on the North Shore does not count.
- First-time buyer status. The city uses the same three-year idea: no principal residence owned in the three years before closing. In some cases, buying in a designated target area can also qualify you.
- Counseling. First-time buyers must complete HUD-approved, in-person pre-purchase counseling.
- Good timing. You request the MCC while you're getting your mortgage, not after closing.
That timing is the part people miss. Get your counseling certificate early so it's ready when the application is. The city spells out the steps on its TaxSmart page.
Can you combine TaxSmart with IHDA?
Ask your lender before you offer. Whether both fit on your loan depends on your income, the purchase price, the property, and the lender's rules. I won't guess for you here, because a wrong guess can cost you real money. This is the kind of thing I help my buyers sort out on a first call, with the lender at the table.
How should a Chicago first-time homebuyer get ready before touring?
Talk to an IHDA-approved lender first, get pre-approved, and get your counseling done before you tour. That order keeps you from falling for a home the programs can't help you buy. My post on getting pre-approved before touring homes in Chicago explains why it matters so much.
What is your prep checklist?
- Pick two or three IHDA-approved lenders and compare them.
- Ask which Access option fits your plan, and what each one means if you sell early.
- Book your HUD-approved, in-person counseling if you want TaxSmart.
- Check the three-year ownership rule for you and your spouse.
- Decide your all-in monthly budget, not just a price.
- Ask if the property type you want is eligible.
I like helping first-time buyers because the process feels scary until someone explains it. You still make every decision. My job is to point out the bumps in the road early. Before you offer, it also helps to read the things you shouldn't do when buying a home.
How do prices differ across Chicago?
Program limits and your budget both depend on price, and prices change a lot from one part of the North Side to the next. Here are area-level medians for a few areas I work in.
| Area | Median Sale Price | Median Days on Market |
|---|---|---|
| Edgewater | $315,000 | 52 |
| Andersonville | $702,657 | 40 |
| Lincoln Park | $808,000 | 45 |
| Lincoln Square | $722,495 | 53 |
| Ravenswood | $495,000 | 31 |
These are medians for homes that sold, and the days column counts how long sold homes took. An individual home depends on its condition, its block, its age, and its timing. Two condos a few blocks apart can price very differently. That's why I don't trust a price per square foot or the three closest sales by themselves. Whether a home fits a program's price limit is a question for your lender.
Don't just take my word for how this works. You can read what past clients say about working with me on Google, Zillow, and Realtor.com.
FAQ
How much down payment assistance can I get through IHDA?
It depends on which Access option you use. IHDA describes Access Home as 6% of the purchase price, up to $15,000. The other options are up to $6,000 forgivable, up to $7,500 deferred, and up to $10,000 repayable. Your lender confirms which one you qualify for.
Do I have to repay Chicago or Illinois down payment assistance?
Sometimes, yes. Access Forgivable is forgiven monthly over 10 years. Access Deferred is generally due at maturity, or sooner if you sell, refinance, or pay off the mortgage. Access Repayable is paid back over 10 years at 0%. Ask your lender how Access Home works for your loan.
What counts as a first-time homebuyer in Illinois?
Usually it means you have not owned a principal residence in the past three years. IHDA generally looks at both the borrower and spouse, and some exemptions exist. Check with an IHDA-approved lender early so there are no surprises.
Can I use IHDA assistance to buy a condo or multifamily property in Chicago?
Maybe, but your lender has to confirm it. IHDA says its programs are for new or existing homes, and the property type, loan setup, and deal terms all have to be eligible. Ask before you write an offer.
Do I need homebuyer counseling before buying in Chicago?
For the TaxSmart credit, yes. First-time buyers must complete HUD-approved, in-person pre-purchase counseling, and the certificate should be ready when you apply for the MCC. Ask your lender if your mortgage has its own counseling rules too.
Where should you start as a Chicago first-time homebuyer?
Start with an IHDA-approved lender, check the three-year rule, and plan your counseling early. The programs can help a lot, but only if the steps happen in the right order. I help buyers line up the lender, the program, and the right home so the plan holds together.
Ready to talk it through? Schedule a free, no-obligation consult and we'll map out your next steps. If you also own a home you need to sell first, get a free home valuation.
Equal Housing Opportunity. Stephanie Sullivan, Managing Broker License; RENE, SRS, and ABR designations. Regulated by the Illinois Department of Financial and Professional Regulation. This article is general information, not legal, tax, or financial advice. Confirm your own numbers with your closing agent, tax advisor, or lender.
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