Public incentives

State Matching Funds

By investing in an approved REACH Illinois program, an employer can leverage a dollar-for-dollar match from the Illinois Housing Development Authority (IHDA). Funds are targeted to employers in Illinois that are partnering with the Metropolitan Planning Council (MPC) in the Chicago region or Housing Action Illinois in the rest of the state and an approved REACH Illinois housing counseling agency. In addition to leveraging private sector support for down payment assistance and homeownership counseling, these funds help employees live closer to work, decreasing their commute times and improving their quality of life.

Down payment match amount

IHDA will match an employer's down payment assistance up to $5,000 for households earning less than 50 percent of the region's Area Median Income (AMI) or up to $3,000 for households earning between 50 and 80 percent of AMI. AMI is based on total household size and income.

The assistance provided by IHDA is not considered taxable income to the employee.

Chicago Metropolitan Area Income Limits

(Cook, DuPage, Lake, Kane, McHenry, & Will counties)

% 1-Person 2-Person 3-Person 4-Person 5-Person 6-Person
120% $63,360 $72,360 $81,480 $90,480 $97,680 $105,000
80% $42,200 $48,250 $54,250 $60,300 $65,100 $69,950
50% $26,400 $30,150 $33,950 $37,700 $40,700 $43,750

Effective February 13, 2009: Click here for income limits in other counties.

Eligibility requirements

A homebuyer is eligible for state matching funds if he or she:

  1. Works for an employer participating in the REACH Illinois employer-assisted housing initiative;
  2. Has a household income within the limits outlined above;
  3. Works with an approved REACH Illinois partner; and
  4. Contributes at least $1,000 to down payment and closing costs from personal savings.

Further eligibility requirements, such as required tenure at the company and the new home's proximity to the participant's workplace, are determined by the employer.

State Tax Credits

The Illinois Affordable Housing Tax Credit Program provides a 50 percent tax credit on state income tax liability for every $1 invested in an EAH program. Eligible EAH programs include down payment assistance, reduced interest mortgages, individual development accounts, and rental subsidies to help employees find and finance homes near work. Tax credits are also available for costs related to homebuyer counseling and outsourced EAH program administration.

The law provides for a transfer of the tax credit, enabling a tax-exempt employer (such as a nonprofit or municipality) or one with limited tax liabilities to transfer or "sell" the credits to an individual or corporation that has a tax liability.

REACH Illinois partners apply to IHDA or the Chicago Dept. of Housing for tax credits that will be allocated to the employer.

Key elements of the tax credit program

  1. Employer provides assistance to an employee buying or renting a home through a defined EAH program.
  2. The EAH program includes a "live near work" component.
  3. Employee's household income can be no greater than 120 percent of the region's AMI.
  4. The employer's assistance flows through a nonprofit housing partner. This housing organization applies to IHDA or the Chicago Dept. of Housing to reserve and issue tax credits on behalf of the employer.

How it works

Example A: Employer commits $70,000 to REACH Illinois partner for an EAH program (including counseling costs, administration, and down payment assistance for employees). REACH Illinois partner applies for an allocation of tax credits on behalf of the employer. Credits are reserved and issued upon certification that program budget has been spent. Employer may deduct $35,000 from its state income tax liability. Company has the option of carrying the credit forward over the next five years if the tax credit exceeds the company's tax liability for the year in which the funds were expended.

Example B: Nonprofit employer commits $70,000 to REACH Illinois partner for an EAH program. Once credits are issued, employer "sells" the tax credits. The buyer of the credits receives the tax credits, and the employer recoups some of the costs (usually yield $.80 to $.83 on the dollar) invested in the EAH program.

For more information

View one page summaries of the Illinois matching funds and tax credit incentives. 

View the Illinois Affordable Housing Tax Credit legislation.

View the regulations. This is a link to the Illinois Register. Scroll through to Page 14312 for 47 Ill. Adm. Code 355 about the Illinois Affordable Housing Tax Credit Program.