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 financial assistance to income-qualified persons looking to purchase a home in Normal. The primary goal of the program is to increase homeownership opportunities for Normal residents by making the costs associated with the purchase more affordable. This program provides a forgivable loan 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 assistance, making it possible for them to purchase and own a home in our community. 

This is a needs-based program and is not limited to first-time homebuyers. Assistance is only awarded to those who would not qualify for a loan without this financial support. Applications are reviewed and awarded on a first completed, first served basis. The Town allocates Community Development Block Grant funds to support roughly eight loans each program year. 

Upon approval of an application and subsequent home purchase/closing, a subordinate mortgage is placed on the home in the amount of the assistance provided. The mortgage lasts for five years with twenty percent of the loan amount forgiven each year the home remains occupied by the homebuyer. The mortgage is then released by the Town with no funds due. Acceptance of these funds does limit the homebuyer’s rights to refinance the property in the future. Click here to view the Town's Subordination Request Policy.  

Any home built prior to 1978 must undergo a visual inspection for disturbed paint. If disturbed paint is discovered, it must be stabilized by a certified professional.  Final clearance testing is required as well.   

Program Requirements and Qualifications

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

  • The home being purchased must be located within the Town of Normal and owner-occupied (apartments and mobile homes do not qualify).
  • The annual household income must be at or below 80% of the Area Median Income as determined by HUD. 
  • The House-to-Income Ratio must not be greater than 36%.
  • The Total Debt-to-Income Ratio must not be greater than 43%.
  • Personal funds of the homebuyer going toward down payment/closing costs must not exceed 10% of the contract purchase price of the home.
  • The Town's funds cannot exceed 50% of the down payment.  There is no limit on closing costs.  
  • 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.  Click here for current income guidelines.

How to Apply

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.  Application materials can be found here.

  1. Jennifer Toney

    Community Development Specialist
    Phone: 309-454-9766

  2. Mercy Davison

    Town Planner
    Phone: 309-454-9590