Down Payment Assistance Program

Through funding provided by the U.S. Department of Housing and Urban Development (HUD), the Town of Normal is proud to offer this financial assistance to income-qualified persons looking to purchase a home in Normal. This program provides a grant through a buyer's lending institution for up to $5,000 to help offset down payment and closing costs. In the nearly 20 years since this program's creation, more than 140 low- to moderate-income individuals and families have been awarded a grant making it possible for them to purchase and own a home in our community. 

As of April 1, 2021, the Town has funding available for up to eight $5,000 grants to qualified, would-be homeowners. As this is a needs-based program, applicants do not have to be first-time homebuyers and grants are only awarded to those who would not qualify for a loan without this financial assistance. Grants are reviewed and awarded on a first come, first serve basis.

An applicant may apply for this grant in an amount up to $5,000. However, as this grant is based on the financial need of the homebuyer, the final amount awarded may not necessarily equal the full amount that is requested. The funds may be used for the down payment, closing costs, or a combination of the two. Eligible costs include escrow payments made at the time of an offer, lending institution fees and required contributions and filing and recording fees.

Upon approval of an applicant’s grant and their home’s purchase, a second mortgage is placed on the home in the amount of the grant. The mortgage lasts for five years with twenty percent of the grant amount forgiven each year the home remains occupied by the qualified homebuyer. The second mortgage is then released by the Town after those five years.

 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.

Click on the links below for additional program information, application materials, and policies:

Qualifications and Application Materials

Eligibility & HUD Income Guidelines

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

Requirements and qualifications include:
  • The home being purchased must be located within the Town of Normal and owner-occupied (apartments and mobile homes do not qualify)
  • The gross income of the homebuyer/household must fall within the guidelines established by HUD (listed below)
  • The House-to-Income Ratio must not be greater than 30%
  • The Total Debt-to-Income Ratio must not be greater than 37%
  • Personal funds of the homebuyer going toward down payment/closing costs must not exceed 10% of the contract purchase price of the home
  • The homebuyer must retain a minimum of $1,000 in a bank account after the down payment/closing costs have been paid
Qualifying income limits, which are subject to change at any time by HUD, are based on household size. A household is defined as any and all persons living in the home, regardless of family relation. Income from all persons in the household will be considered.

Below are the HUD income limits by household size as of April 18, 2022:
One PersonTwo PersonsThree PersonsFour PersonsFive Persons Six PersonsSeven PersonsEight Persons

  1. Jennifer Toney

    Community Development Specialist
    Phone: (309) 454-9766

  2. Mercy Davison

    Town Planner
    Phone: (309) 454-9590