Affordable Homeownership
Homeownership offers a wide range of benefits to individuals and families. From increased household and generational wealth, to improved employment outcomes, to better school performance, homeownership is a proven pathway towards unlocking new opportunities for a healthier life. But, for a growing share of first-time buyers, the dream of homeownership is in danger of falling out of reach as they contend with historically high home prices, rising interest rates, and limited inventory of available homes.[i] For households of color or those in historically underbanked communities, the barriers are now even steeper. However, by focusing and actively engaging on the specific challenges that underserved populations are facing in the current housing market, including high entry costs, knowledge gaps, and more, IHDA has created pathways for thousands of low- and moderate-income families to become successful homeowners.
In 2022 and 2023, IHDA closed on $2.6 billion in home loans, $101.3 million in down payment assistance, and continued to find innovative ways to increase homeownership in diverse communities of all sizes throughout Illinois. In total, 15,218 households bought a home with an IHDA mortgage in 95 of Illinois’ 102 counties, representing an estimated 5.2% of all home purchases in the state during that time.
To address the diverse needs of homebuyers in Illinois, IHDA offered six programs that provided varying levels of assistance designed specifically to overcome many of the common barriers first-time homebuyers face. To bridge the homeownership gap between households of color and their white counterparts, IHDA’s Opening Doors program offered a flat $6,000 in down payment assistance grant forgiven on an accelerated term to meet the higher level of need seen in historically underserved and underbanked communities. To promote mortgage lending in rural communities and areas of the state that are typically more affordable, IHDA introduced the IHDAccess Plus initiative that offered a flat service release premium as an incentive to lenders who made mortgage loans of $50,000 or less.
In an effort to encourage more lenders to make IHDA loans, the Agency joined a coalition of 27 housing finance agencies from across the country to offer the HFA1 program, a new initiative that aligned underwriting and operational requirements to make it easier for regional and national lenders to make HFA loans. Finally, established in 2018, the IHDAccess program continued to allow homebuyers to select up to $10,000 as a forgivable, repayable, or deferred down payment assistance loan depending on their specific level of need.
TERMINOLOGY
Grants, deferred payment loans, or forgivable loans offered to eligible homebuyers to help them afford down payment and closing costs.
Independent, expert advice provided by a specially trained and government-certified counselor to help clients assess their financial situation, evaluate their options, and achieve their housing goals.
Homebuyers Served: 15,218
First-Time Homebuyers 87%
Not all barriers to homeownership are financial, and IHDA is also committed to bridging the knowledge gaps that have kept many first-time buyers on the sidelines. Among other efforts, IHDA has partnered with the Federal Home Loan Bank of Chicago on a new program that will facilitate expanded housing counseling, financial education, and other services in communities that have historically been marginalized from the housing market. Through this partnership, our goal is to expand the pipeline of minority and low-income households who are ready to buy their first home in Illinois.
In addition to financial support and homebuyer education, all IHDA programs are supported by a robust marketing and outreach campaign that engages HUD-approved counseling agencies, realtors, mortgage lenders, and other partners that work in historically underserved communities to increase awareness among potential homebuyers. As a result of this holistic approach, IHDA’s mortgage programs are outpacing the broader mortgage market in service to first-time buyers and households of color. In 2022 and 2023, 87% of IHDA homebuyers purchased their first home, compared to 32% of all homebuyers in the United States. Nearly 16% of IHDA homebuyers were Black or African American, compared to 7% of all homebuyers in the country. And over 24% of IHDA buyers were Hispanic or Latino, compared to 7% of all buyers in the nation.[ii]
[i] Illinois Association of Realtors Market Stats
[ii] National Association of Realtors: 2023 Profile of Home Buyers and Sellers
Chicago
Tonnette Johnson, Chicago
Tonnette Johnson was a lifelong renter who had always thought homeownership was out of reach after years trying to come up with a down payment. However, as her family grew and her landlord failed to address concerns she had about her building, she knew it was time to have a home of her own. With the help of IHDA counseling partner Neighborhood Housing Services of Chicago, Ms. Johnson spent two years improving her credit score while budgeting and saving what she could. And with the help of $6,000 in down payment assistance from IHDA’s Opening Doors program, she was able to purchase a home in Chicago’s Roseland neighborhood that she now shares with her daughter and some of her grandchildren. After her first year as a homeowner, she says the biggest benefit is the peace of mind that comes with having something of her own, and knowing that she will always have the space to welcome her children or grandchildren when they need a place to stay.
“This program will ensure my family always has a place to call home. Without it, none of this would have been possible.”