The Three-Year Test, and the Two Ways Around It
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
The definition is simple. The part that surprises people is whose history gets counted alongside their own.
The test itself
A first-time homebuyer, for IHDA purposes, is a person who has not owned a principal residence at any time during the last three years.
Two words carry weight. Principal, because an inherited property or an investment property you never lived in is a different question, and one worth asking us about rather than assuming. And three years, measured back from application for first-time programs, which means a buyer who sold in 2023 may already be clear.
It only matters for one program. IHDAccess Home, the 6% to $15,000 option, is the sole first-time program on the menu. The other three have no such requirement.
Exempt status
IHDA defines Exempt as a qualified veteran, or a property located in a targeted area. An Exempt buyer is not held to the three-year rule. The definitions sit in the origination guide in the IHDA Document Library.
The veteran route
The borrower or co-borrower must be the veteran. Documentation is a Certificate of Eligibility or a DD214 showing honorable discharge, provided in the closing package uploaded to IHDA.
One detail worth flagging: if only the spouse is the veteran, that spouse must also be a borrower and mortgagor, obligated on the note. Veteran status does not travel to a non-borrowing spouse.
The targeted route
The exemption attaches to the property. Any buyer, however many homes they have owned, is Exempt when purchasing in a targeted area, and the AccessHome income limit rises at the same time. What that is worth.
The spouse rule, which catches the most people
This is the one to read twice. For IHDA tax code compliance a person is either married or single, with no gray area. Both the borrower and the spouse must be qualified when the spouse is not borrowing, and it must be verified that borrower and spouse are first-time homebuyers or Exempt, even if the non-borrowing spouse will not be residing in the property.
Three situations where that bites:
- Separated, not divorced. Still married for this test. A spouse who owns a home makes the borrower ineligible for the first-time program.
- Spouse staying behind. Not residing in the property does not remove them from the test.
- Marrying mid-process. The new spouse must be confirmed as a first-time homebuyer, with a marriage certificate obtained and the spouse signing the Borrower Affidavit.
IHDA notes this requirement applies to tax code compliance underwriting within the program rather than to credit underwriting, so it is not an issue of the spouse's credit or income. It is purely about ownership history.
If that describes your situation, the practical answer is usually one of the other three programs, or a targeted address. How the household rules fit together.
See also IHDAccess Home and the full eligibility test.
Frequently asked questions
What is IHDA's definition of a first-time homebuyer?
A person who has not owned a principal residence at any time during the last three years. IHDA applies the test to first-time-buyer programs, which currently means IHDAccess Home only. A buyer is Exempt from the requirement if they are a qualified veteran or if the property being purchased is located in a targeted area.
Does my spouse count if they are not on the IHDA loan?
Yes, for first-time-buyer programs. The guide states that for IHDA tax code compliance a person is either married or single with no gray area, that both borrower and spouse must be qualified when the spouse is not borrowing, and that both must be verified as first-time homebuyers or Exempt even if the non-borrowing spouse will not be residing in the property. A separated buyer who is not divorced is still married for this test.
How does a veteran qualify as Exempt for IHDA?
The borrower or co-borrower must be the veteran, documented with a Certificate of Eligibility or a DD214 showing honorable discharge in the closing package uploaded to IHDA. If only the spouse is a veteran, the guide states that spouse must also be a borrower and mortgagor obligated on the note, so veteran status does not transfer to a non-borrowing spouse.
Which Illinois DPA programs require first-time buyer status?
Only IHDAccess Home, the program paying 6% of the purchase price to a $15,000 maximum. IHDAccess Repayable, IHDAccess Deferred and IHDAccess Forgivable carry no first-time homebuyer requirement and use the general income limit rather than the tighter AccessHome limits.
What happens if I get married during an IHDA loan application?
The documentation must include the new spouse to confirm that both are first-time homebuyers. IHDA requires a copy of the marriage certificate and the spouse must sign the Borrower Affidavit. The guide notes that this requirement applies to tax code compliance underwriting within the program and is not an issue during credit underwriting.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal or tax advice. IHDA program terms, income limits and purchase price limits are set by the Illinois Housing Development Authority and change; figures here carry the date we verified them and IHDA's own disclaimer applies, that funding and availability are subject to change and are not guaranteed until a complete reservation is placed. Loans are subject to borrower and property qualification.