FHLBank Chicago Downpayment Plus (DPP)

On a $230,000 home in Waukegan, an FHA loan with the minimum 3.5% down payment requires $8,050 down and a $221,950 first mortgage. Twenty-five percent of that mortgage is $55,488, so the Downpayment Plus grant reaches the full $10,000 cap. A four-person household in Lake County qualifies with income up to $97,200 under the 2026 limits. The buyer must still contribute $1,000 of their own savings.

Estimated closing costs in Waukegan run $4,500 to $7,000, so total cash needed is $12,550 to $15,050 before any seller credits. The $10,000 grant plus the buyer's $1,000 covers $11,000 of that, leaving $1,550 to $4,050. Negotiated seller-paid closing costs could close that gap. If the grant exceeds what is needed, cash back is capped at $250 and the rest reduces the loan principal.

A buyer who instead finances with IHDA Access Forgivable could add 4% of the price, capped at $6,000 and forgiven over 10 years, for $16,000 in combined assistance. IHDA requires the buyer to contribute the greater of $1,000 or 1% of the price, which is $2,300 here. Together that covers the full $12,550 to $15,050, if the lender is both a DPP member and IHDA-approved.

FHLBank Chicago's 2026 guide states that Downpayment Plus may be combined with federal, state and local grants or loans, including Community Development Block Grant and HOME funds. In Illinois, the common pairing is an IHDA first mortgage: IHDA Access Forgivable (4% up to $6,000, forgiven over 10 years), Access Deferred (5% up to $7,500) or Access Repayable (10% up to $10,000). Each funder must allow the layering, so your lender confirms both sets of rules.

DPP cannot be used on a refinance, with construction-period financing on an unfinished home, with an interest-only loan, or on a mortgage that includes a co-signer or non-occupying co-borrower. Assistance cannot pass through to the buyer as cash: anything over $250 back at closing must reduce the principal. Buyers working with a nonprofit lender such as Habitat for Humanity use DPP Advantage instead, which waives the $1,000 contribution. FHLBank Chicago's Community Investment team answers questions at 312-565-5824.

Other ways to cut cash to close include negotiating seller-paid closing costs and using the grant for escrow reserves or an interest rate buydown. A buyer purchasing a property from a member lender's own REO inventory can also use DPP if an independent appraisal supports the price. Gift funds do not count toward the $1,000 minimum contribution, so plan that money from your own accounts.

Downpayment Plus gives up to $10,000 that becomes a true grant after five years, with no interest and no monthly payment. Its 2026 guide sets no minimum credit score and no first-time buyer requirement, it works with FHA, VA, USDA and IHDA loans, and it covers one- and two-unit homes, condos and manufactured homes titled as real estate. Early sale is softened too: repayment is pro rata, is waived when $2,500 or less, and is waived on a sale to a buyer at or below 80% AMI. Compared with IHDA Access Forgivable at up to $6,000 over 10 years, DPP gives more money with half the retention period.

The biggest limitation is access: only member lenders can offer it, each lender has a $1,000,000 annual cap, and funds are first-come, first-served until fully reserved or the last business day of December. The 80% AMI limit, $97,200 for a family of four in Cook County, rules out many dual-income households. Education plus HUD-approved counseling adds time before closing. Buyers must bring $1,000 of their own savings, and the five-year lien must be repaid or subordinated in a refinance. Buyers over the income limit should look at IHDA Access Forgivable or Access Deferred instead.