Freqently asked questions

Below are some frequently asked questions about REACH Illinois.

  1. What kind of employer can participate in REACH Illinois?

    Any employer can offer an employer-assisted housing benefit to employees. A range of employers, nonprofit and for-profit, from large corporations to universities, small manufacturers to municipalities, are participating in this program.

  2. Is there a minimum amount my company needs to invest in the program?

    Each REACH Illinois program is fully customized. You can determine the size and budget for the program based on your needs. You determine the number of employees you want to assist and how much rental or down payment assistance you will provide. Housing Action Illinois or the Metropolitan Planning Council can help you determine total program costs based on your goals.

  3. What kind of assistance can my company provide?

    Any housing assistance or education provided by an employer to its employees falls within the broad definition of employer-assisted housing. To qualify for the state tax credit, Illinois employers can offer down payment and closing cost assistance, reduced interest mortgages, mortgage guarantee programs, rent subsidies, or individual development savings account plans to their employees. Investments in counseling and program administration are also eligible costs. All expenditures must go through a REACH Illinois partner.

  4. Is there a minimum or maximum amount of assistance my company needs to invest per employee?

    You determine the amount of assistance you will provide to your employees. Employers around the state offer down payment assistance ranging from $1,000 to $15,000. The typical down payment assistance is $5,000. For the employee to be eligible for state matching funds, an employer must provide at least $1,000 of direct assistance per employee, and the employee must contribute $1,000 from his or her own savings.

  5. Can my company provide rental assistance to employees?

    Yes. You can help employees with security deposit, monthly rent, or savings toward homeownership, and this assistance is eligible for tax credits through the state tax credit program. The Metropolitan Planning Council can help design and implement this program.

  6. Is there a minimum or maximum purchase price allowed under the REACH Illinois program?

    REACH Illinois does not set any purchase price limits, but an employer may choose to set guidelines for its program. For instance, the University of Chicago has aligned its program with the City of Chicago houisng programs and included the city's purchase price limits as part of its requirements.

  7. Is there a maximum employee income allowed under the REACH Illinois program?

    No. An employer designs its own eligibility parameters. To leverage state matching funds (for employees buying a home), an employee's household income cannot exceed 80% of the local Area Median Income. To take advantage of state tax credits (for the employer), employees' household incomes can go up to 120 percent of Area Median Income. Click here for the Area Median Incomes in your county.

  8. Do participating employees need to make a minimum down payment contribution?

    The REACH Illinois program requires that employees invest at least $1,000 from their own savings.

  9. Are there geographic limitations on home purchases?

    Each employer determines where employees should buy or rent. While there are no geographic limitations connected with the state matching funds, a program must contain a "live near work" component for the employer to be eligible for state tax credits. This is often defined as a purchase within a community or communities, or within a radius of work.

  10. Do employees need to be first-time homebuyers to participate?

    No. The REACH Illinois program has no first-time homebuyer requirement. The state matching funds and tax credits, similarly, have no first-time buyer requirement. However, some other assistance programs, which are often used, may have such requirements.

  11. If the employee household income exceeds 120% of the Area Median Income during the forgiveness period, is my company still eligible to receive the state tax credit? Similarly, if the employee's income exceeds 80% of the Area Median Income during the forgiveness period, is the employee still eligible to receive the state down payment match funds?

    Yes. The qualifying employee household income is determined at closing. Any subsequent increase in employee household income does not impact the state match or state tax credit.

  12. Is my company required to use a particular non-profit counseling agency to provide the pre-purchase homeownership education component of the program?

    Yes. In order to access the state matching funds and the state tax credits, the nonprofit counseling agency must be an approved REACH Illinois partner.

  13. Is there a minimum or maximum number of employees my company needs to assist in order to qualify for the tax credits?

    No. The only requirement is that the program contains a minimum gross employer investment (from either a single employer or group of employers) of at least $10,000.

  14. Can my company receive state tax credits for the internal costs incurred to implement the program?

    No. State tax credits are available for those costs incurred for direct assistance to employees and payments made to qualified nonprofit organizations for housing counseling and third-party administration of the program.

  15. Can my company choose to assist only a certain category of employees?

    Yes. An employer can define a program to meet its objectives by targeting certain classes of employees. Reviewing federal, state or local laws and tracking employee applications will help ensure you do not face legal constraints.

  16. Can my company benefit from the tax credits even though it is a nonprofit or does not have state income tax liability?

    Yes. The state tax credits are transferable, so an employer can "sell" the credits to any individual or corporation with state tax liability to recoup a portion of its investment. The Metropolitan Planning Council, Housing Action Illinois, or REACH Illinois partner can assist you in identifying partners to transact that deal.

  17. Do employee participants in REACH Illinois have to use specific mortgage lenders?

    No. REACH Illinois is not limited to specific lenders, although employers may design their individual employer-assisted housing programs in participation with certain mortgage lenders that may offer special incentives to participating employees. Some REACH partners may have a list of partner lenders, but they will not restrict an employee to one of them.

  18. Can my company get tax credits for providing rental assistance to employees?

    Yes. Rental assistance and security deposit assistance are eligible forms of employer-assisted housing under the state tax credit program. State matching dollars are currently only available for home purchases.

  19. What if an employee leaves the company before the end of the loan forgiveness period?

    Most REACH Illinois programs provide home purchase assistance forgiven over time, typically five years. If the employee leaves within this period, the unforgiven portion must be repaid to the employer, and several REACH partners have experience arranging for repayment. If an employee leaves, the employer needs to contact the nonprofit housing counseling agency regarding recapture of unforgiven funds. The REACH Illinois partner will employ its best efforts to recapture those funds, but will not guarantee repayment on behalf of the employee.

  20. Does the assistance to the employee constitute taxable income?

    The direct financial assistance provided by the employer to the employee does constitute taxable income in the amount that is forgiven each year. The employer needs to report the pro-rated portion annually to the IRS. The state match is not considered taxable income. The proposed Housing America's Workforce Act (HR 1850 and S 1078) would exclude the employer's contribution as taxable income.

  21. Why should my organization partner with a REACH Illinois Partner instead of administering the program internally?

    REACH Illinois partners are nonprofit, community-based organizations with expertise in the local real estate market, as well as experience or training in administering housing assistance programs. They work with employees individually, keeping their personal financial situations completely confidential, which relieves employers of potentially sticky situations. REACH Illinois partners also help employees leverage any available financial resources, including public and private programs. They are the approved nonprofit intermediaries who can access the state matching funds and tax credit programs.