Down Payment Assistance Program

The Program

The Town of Normal, Illinois is committed to increasing opportunities for homeownership in our community. To support this commitment, the Town offers the Down Payment Assistance Program for income-qualified home buyers. This program is funded through the US Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) program.

The Purpose 

The goal of the Down Payment Assistance program is to make purchasing a home more affordable.  The program is designed to assist residents with down payment and closing costs. This program is not limited to first-time homebuyers but is restricted to those meeting income criteria set by HUD and other qualifications. Assistance is provided through a 0% interest, five-year forgivable loan.

Program Requirements and Qualifications

This program is not limited to first-time homebuyers, but is restricted to those meeting income criteria set by HUD and other qualifications.

• The home being purchased must be located within the Town of Normal and be owner-occupied (apartments and mobile homes do not qualify).
• The annual household income must be at or below 80% of the Area Median Income as determined by HUD. A household is defined as any and all persons living in the home, regardless of family relation. Income from all persons age 18 and older in the household will be considered when determining income eligibility.
• The Housing-to-Income Ratio must not be greater than 36%.
• The Total Debt-to-Income Ratio must not be greater than 43%.
• Personal funds of the homebuyer going toward down payment/closing costs must not exceed 10% of the contract purchase price of the home.
• The Town's funds cannot exceed 50% of the down payment.  There is no limit on closing costs.  
• The homebuyer must retain a minimum of $1,000 in a bank account after the down payment/closing costs have been paid.
• The homebuyer must agree to a five-year forgivable loan for the amount of assistance received. This may limit opportunities to refinance during the forgivable period.  The Town's Subordination Policy outlines when a request for loan subordination may occur.  
• Any home built prior to 1978 must undergo a visual inspection for disturbed paint. If disturbed paint is discovered, it must be stabilized by a certified professional.   Final clearance testing is required as well.   

How to Apply

To apply for assistance under this program, please contact your lending institution. All applications for assistance must be received by the Town from the lending institution directly.  Application materials can be found here.