You Still Bring Money to an Illinois Assistance Purchase
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
Plenty of writing about Illinois assistance implies you can buy with nothing. The program guide says otherwise, in one sentence, and it is better to plan around it than discover it.
The rule, stated exactly
The origination guide in the IHDA Document Library states that the borrower must contribute a minimum investment to the transaction, which must be the greater of 1% of the purchase price or $1,000.00. IHDA calls this the IHDA minimum investment, and it is evidenced on the Loan Estimate and Closing Disclosure, so it is not a soft expectation.
Which of the two governs depends on price. Above a $100,000 purchase, the 1% figure is larger and controls. At or below it, the $1,000 floor does.
| Purchase price | 1% of price | Your minimum investment |
|---|---|---|
| $100,000 | $1,000 | $1,000 |
| $150,000 | $1,500 | $1,500 |
| $250,000 | $2,500 | $2,500 |
| $350,000 | $3,500 | $3,500 |
What counts toward it
This is the part that makes the rule manageable, and it is rarely explained. You are not being asked to produce fresh cash at the closing table on top of everything already spent.
- Earnest money already paid counts.
- Appraisal paid by you counts.
- Inspection paid by you counts.
- Prepaid insurance paid by you counts.
- Money brought to the table counts.
Items you paid before closing are listed on the Closing Disclosure as POC, meaning paid outside closing. Many buyers have already met a meaningful share of the requirement before they ever see a closing statement.
What does not count
Tax proration is the trap. It arrives as a credit on the settlement statement and looks like money working in your favour, but IHDA excludes it from the minimum investment specifically. Those funds have to come from you, or from properly sourced gift funds where the automated underwriting system permits, and a gift of equity is allowed on that same basis.
The lender must also satisfy the underlying agency's own minimum investment rules, whether FHA, VA, USDA, Fannie Mae or Freddie Mac, while meeting IHDA's. The stricter of the two governs in practice.
The cash-back cap, and why it exists
Assistance is sized on the purchase price, so a file occasionally generates more assistance than the transaction needs. IHDA does not let that flow back to you.
You may leave the table with $250, plus anything you brought above your minimum investment. Everything else goes to principal reduction on the first mortgage. The arithmetic IHDA publishes is your contributions, minus the required minimum investment, equals allowable cash back, plus that $250.
Three things the assistance cannot pay for
Worth knowing before you plan around it. IHDA assistance cannot repay existing debt, including tax liens, installment debt and revolving debt. It cannot cover an appraisal gap, and the guide is explicit that where the appraised value comes in under the sale price the assistance is still calculated on the sale price but cannot bridge the difference. It cannot buy items that are not attached to the property.
See also the full eligibility test, the four programs, and the assistance calculator.
Frequently asked questions
Can you buy a house in Illinois with zero money down using IHDA?
No. IHDA requires a borrower minimum investment of the greater of 1% of the purchase price or $1,000.00, which is evidenced on the Loan Estimate and Closing Disclosure. On a $250,000 purchase that is $2,500 and on a $100,000 purchase it is $1,000. The funds must be the borrower's own or properly sourced gift funds where the automated underwriting system allows. Down payment assistance reduces what you need, it does not remove the requirement.
Does earnest money count toward the IHDA minimum investment?
Yes. The IHDA Procedure Guide states that earnest money, an appraisal paid by the borrower, an inspection paid by the borrower, prepaid insurance paid by the borrower, and money brought to the table can all count toward the IHDA minimum investment. Items paid before closing should be listed on the Closing Disclosure as POC, paid outside closing. Many buyers have partly satisfied the requirement before closing day.
Can tax proration count toward my minimum investment in Illinois?
No. The guide states specifically that the borrower may not use the tax proration toward the IHDA minimum investment. Those funds must come from the borrower's own funds or, if allowable by the automated underwriting system, from properly sourced gift funds including a gift of equity. Tax proration appears as a settlement credit but is excluded from this calculation.
How much cash can I get back at an IHDA closing?
$250, plus any amount you contributed above your required minimum investment. All other excess funds are applied to principal reduction on the first mortgage. IHDA expresses it as borrower contributions minus the minimum required investment equals allowable cash back, plus $250.
Can IHDA assistance cover an appraisal gap?
No. The guide states that where the appraised value is lower than the sale price, the assistance will still be calculated based on the sale price but cannot be used to cover the gap. IHDA assistance also cannot be used to repay existing debt such as tax liens, installment debt or revolving debt, or to purchase items not attached to the property.
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.