Homegrown Purchase Assistance Program

What is the HomeGrown Purchase Assistance Grant Program?

The HomeGrown Grant is a financial assistance program funded by the City of Chicago Department of Housing (DOH) to help eligible homebuyers purchase homes in the City of Chicago by providing financial assistance for:

• Down Payment
• Closing Costs

Who administers the program?

The program is administered by two (2) Community Development Financial Institutions (CDFIs):

• Neighborhood Lending Services, Inc. (NLS)
• TRP Lending LLC (TRP)

These organizations handle applications, eligibility reviews, and grant disbursement.

What is the goal of the program?

The program aims to:

• Help families build equity through homeownership
• Expand access to affordable housing
• Support long-term and generational wealth creation

Is this a purchase price assistance program? If so, how much financial assistance is available?

Yes. The HomeGrown grant is to provide a subsidy for the purchase of an eligible property in the City of Chicago.

Grant amounts depend on gross household income and property location:

• Zone A: Up to $70,000
• Zone B: Up to $50,000

The grant cannot exceed 25% of the home’s purchase price.

What are Zone A and Zone B?

• Zone A: Higher-cost areas with rising home prices
• Zone B: Lower-income census tracts

How do I determine a property’s zone?

To determine a property’s zone, applicants should work with their CDFI administrator (NLS or TRP) to confirm the eligibility location.

You can visit Chicago.gov/HomeGrown – enter the property address into the Zone Lookup Tool and the tool will identify whether the property is located in Zone A or Zone B.

You can also use the FFIEC Geocoding System to identify the property’s census tract and compare it to the official list.

What can the HomeGrown grant be used for?

• Down payment assistance
• Closing costs

What is NOT allowed?

Grant funds cannot be used for:

• Furnishings or appliances
• Interest rate buy-downs (temporary or permanent)
• Appraisal gap coverage
• Private Mortgage Insurance (PMI)
• New construction homes tied to City programs → If the home is part of programs like City Lots for Working Families or new construction homes built pursuant to a City of Chicago Land Sale Redevelopment Agreement
• Ground-up new construction – develop or construct a newly built home

Who is eligible?

Applicants must meet all of the following criteria:

• Household Income: Household gross income must be within program limits.
• Location: Purchase a home located in the City of Chicago.
• Primary Residence: The home must be used as the applicant’s primary residence.

What are the income limit restrictions?

• Zone A: Up to 120% of Area Median Income (AMI)
• Zone B: Up to 150% of Area Median Income (AMI)

What are the mortgage requirements?

You must:

• Obtain a fixed-rate mortgage
• Meet a maximum (back-end) debt-to-income ratio of 38%

Mortgage transactions not allowed:

• Adjustable-rate mortgages (ARMs)
• Interest-only loans
• Cash only purchase transactions

Does the HomeGrown grant accept co-signers?

No. The program does not allow co-signers. The individual obtaining the mortgage must apply for the HomeGrown grant and reside in the home as their primary residence for five (5) years.

Are there participating lenders that I must work with to obtain the HomeGrown grant?

No, there is no official list of participating or preferred lenders. Buyers should work with a credible lender of their choice to secure the primary mortgage loan required to purchase the property .

Can I apply if I am not a Chicago resident?

Yes, you may apply if you are relocating to Chicago and will occupy the home as your primary residence. The unit must be your primary residence; non-resident or investment properties are not eligible .

Is a down payment required?

Yes. Buyers must contribute at least 1% of the purchase price from personal funds.

Can additional down payment assistance programs be layered with the HomeGrown grant?

Yes. The HomeGrown grant can be combined with other down payment assistance programs, as long as the HomeGrown Recapture Agreement remains in a permitted lien position on the property.

In most cases, the Recapture Agreement must be recorded in second lien position. However, if the transaction includes both a first and second mortgage, the Recapture Agreement may be recorded in third lien position and still remain eligible. The Recapture Agreement cannot be recorded in fourth lien position or lower.

Please note: BOND-funded programs cannot be layered with the HomeGrown grant. This includes, but is not limited to, IHDA subsidy programs and the TaxSmart Mortgage Credit Certificate (MCC) Program.

Will I have to provide my household income each year?

No. After closing, you will not need to provide income information. However, you will be monitored for the five (5) year term of the grant to ensure that the home remains your primary residence .

Do I need homebuyer education?

Yes. You must complete 6–8 hours of training through a HUD-approved counseling agency. (NOTE: no self-paced online courses).

Additional training may be required for:

• Condos
  • Condominium Training through a HUD-approved counseling agency
• Two-unit properties
  • Landlord or Property Management Training through a HUD-approved counseling agency

Can I apply if I am a current homeowner?

No. Current homeowners are not eligible for the HomeGrown program, even if you do not live in your existing property. At time of purchase, you cannot own:

• Another home
• Investment property
• Vacation property

Will I be able to refinance in the future?

Yes. Refinancing during the five (5) year term is permitted solely for the purpose of improving loan terms – such as reducing the interest rate or adjusting the loan structure/terms. Refinances that provide cash back or take the form of a home equity line of credit (HELOC) are not permitted.

All refinances, including any subordination requests, must be submitted to your associated CDFI administrator (NLS or TRP) for review and approval during the term of the grant.

Do you need to be debt-free with the City?

Yes — but with some flexibility.

To move forward, the City of Chicago requires a Scofflaw check, which looks for unpaid city debts like:

• Parking tickets
• Red light or speed camera tickets
• Other municipal fines or fees

If you have outstanding debt:

You are not automatically disqualified, but you must fix it before closing:

You have two options:

1. Pay the debt in full, OR
2. Set up a payment plan

What proof you’ll need:

Before you can get a “clear to close,” you must show:

• • If paid in full:
  • Copy of receipt confirming the balance is paid off
• • If on a payment plan:
  • Copy of receipt showing your first payment
  • A copy of the payment plan agreement

What types of properties are eligible?

• Single-family homes
• Condominiums
• Townhomes
• Two-unit properties

Not Eligible Property Types

• 3- or 4-unit buildings
  • Only smaller properties (single-family homes, condominiums, townhomes and 2-units) qualify. Larger multi-unit buildings are excluded.
• Certain new construction homes tied to City programs
  • If the home is part of programs like City Lots for Working Families or has been built pursuant to a City of Chicago Land Sale Redevelopment Agreement
• Properties purchased through City of Chicago land sale programs
  • Homes or land acquired via special city-run sales programs are excluded, likely due to existing affordability or resale rules.
• Ground-up new construction
  • You can’t use the program to build a brand-new home from scratch — it’s limited to existing homes or new construction purchases that are move in ready.

Are purchases with rehab properties allowed?

Yes, if:

• Total rehab costs cannot exceed $50,000
• Rehab costs cannot exceed 20% of purchase price

How do I apply?

To apply click here.  (Our affiliate, Neighborhood Lending Services, Inc. (NLS) is administering the HomeGrown Purchase Assistance Grant. You will be taken to the NLS website for the application.)

What documents are required? Typical documents include:

• Application form
• Household Income verification
• ID for each applicant
• Mortgage pre-approval letter
• Executed purchase contract

How long does it take to process an application?

Typically, 5–10 business days after all required documents are submitted.

What happens after I apply?

• Approved: Receive a Conditional Commitment Letter
• Denied: Receive a denial letter with explanation

What if the program runs out of funds?

• Applicants may be placed on a waitlist
• Funding is first-come, first-served

How long do I have to close?

• 90 days from approval
• One 30-day extension may be granted

When are grant funds provided?

Funds are wired to the title company and applied at closing.

Can I receive cash back at closing?

No. Cash back is not allowed under any circumstances. Any excess funds must be applied toward the principal balance of the mortgage loan.

Do I have to live in the home?

Yes. The home must be your primary residence for 5 years.

Is there ongoing compliance?

Yes. You must submit a Residency Certification Affidavit annually.

Do I have to repay the grant?

No, repayment is not required as long as you meet all program requirements for a period of five (5) years. This includes maintaining the home as your primary residence and not leasing or renting the property, transferring ownership, or taking out a cash-out refinance or home equity line of credit (HELOC).

When is repayment required?

Repayment (recapture) is triggered if you:

• Sell the home
• Transfer ownership
• Refinance with cash-out
• Move out or lease the unit

How is repayment calculated?

• The grant is forgiven monthly for over 60 months (5 years).
• Each month, 1/60th of the total grant is forgiven.
• If repayment is triggered before the 5-year period ends, the remaining balance must be repaid in full to the City of Chicago.

Can City employees apply?

Yes, City of Chicago employees may apply, if they qualify.

Are there conflict-of-interest rules?

Yes. Applicants must disclose relationships with program administrators using a Homebuyer Affidavit Disclosure Statement (HADS).

Who can I contact for help?

Contact your assigned CDFI that you are working with or intend to work with. Please note, homebuyers are only permitted to work with one (1) agency, not both.

• Neighborhood Lending Services, Inc.
• TRP Lending LLC.