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New Construction loans in Illinois

Quick answer

Buying a newly built home in Illinois uses a standard FHA (3.5% down), conventional (3%–5%), VA or USDA (0%) purchase loan; building your own uses a construction-to-permanent loan. On a $250,500 home, 3.5% down is about $8,768, and builder incentives are capped by each program.

By Purchase Mortgage Loan Editorial Team Checked against official sources per our editorial standardsLast updated

New Construction loan snapshot for Illinois

ItemEstimate
Minimum down payment0%–20% (by loan program)
Minimum credit score580–680 (by loan program)
Typical IL home value$250,500
3.5% down on typical home$8,768
20% down on typical home$50,100
Avg. effective property tax2.07%/yr (~$432/mo)
Income for typical home (31% rule)$88,000

Rate assumption: 7.18% (Freddie Mac PMMS 30-year fixed average, week of November 5, 2026). Change it in the payment calculator.

Which Illinois programs pair with New Construction loans?

  • IHDAccess Forgivable: Down payment assistance forgiven monthly over 10 years.
  • IHDAccess Deferred: A 0% deferred loan repaid when you sell, refinance or pay off the mortgage.
  • IHDAccess Repayable: A larger assistance amount repaid monthly over 10 years.

Details and current limits: Illinois Housing Development Authority (IHDA).

Buying a new home from a builder vs. building your own: what's the difference?

Most buyers of new homes buy from a production or spec builder: the builder owns the land, builds the house and sells it to you. You finance it with a normal purchase mortgage that closes when the home is complete and has a certificate of occupancy. If the home isn't finished yet, the builder's contract usually sets a deposit and an estimated completion date, and your rate lock has to cover the wait.

Building your own (a custom home on land you own or are buying) works differently. Because there's no finished house to secure a regular mortgage, lenders use a construction loan that pays the builder in stages (draws) as work is inspected, then either converts to a permanent mortgage or is paid off by one.

Construction-to-permanent (one-time close) vs. two-time close

One-time close reduces paperwork and protects you if rates or your finances change during the build. Two-time close can offer more lender choice and lets you shop the permanent mortgage after the home is done.

FeatureOne-time closeTwo-time close
ClosingsOne — construction and mortgage togetherTwo — construction loan, then a separate mortgage
Closing costsOne setTwo sets
RatePermanent rate usually set at the first closingMortgage rate set when you close the second loan
Re-qualifyingNo second approvalYou must qualify again after the build
ProgramsFHA, VA, USDA and conventional (Fannie Mae/Freddie Mac) versions exist; fewer lenders offer themWidely available; construction loan is often interest-only

New Construction loans in Illinois cities

New Construction in ChicagoNew Construction in AuroraNew Construction in JolietNew Construction in NapervilleNew Construction in RockfordNew Construction in ElginNew Construction in SpringfieldNew Construction in PeoriaNew Construction in WaukeganNew Construction in ChampaignNew Construction in CiceroNew Construction in BloomingtonNew Construction in SchaumburgNew Construction in EvanstonNew Construction in Arlington HeightsNew Construction in BolingbrookNew Construction in DecaturNew Construction in PalatineNew Construction in SkokieNew Construction in Des PlainesNew Construction in Orland ParkNew Construction in Oak LawnNew Construction in BerwynNew Construction in Mount ProspectNew Construction in Tinley ParkNew Construction in WheatonNew Construction in Oak ParkNew Construction in NormalNew Construction in Hoffman EstatesNew Construction in Downers GroveNew Construction in GlenviewNew Construction in PlainfieldNew Construction in ElmhurstNew Construction in LombardNew Construction in Buffalo GroveNew Construction in MolineNew Construction in BellevilleNew Construction in RomeovilleNew Construction in BartlettNew Construction in DeKalbNew Construction in Crystal LakeNew Construction in Carol StreamNew Construction in Park RidgeNew Construction in QuincyNew Construction in StreamwoodNew Construction in WheelingNew Construction in UrbanaNew Construction in CarpentersvilleNew Construction in Hanover ParkNew Construction in Rock IslandNew Construction in AddisonNew Construction in OswegoNew Construction in Calumet CityNew Construction in NorthbrookNew Construction in WoodridgeNew Construction in Glendale HeightsNew Construction in St. CharlesNew Construction in O'FallonNew Construction in Elk Grove VillageNew Construction in Pekin

Frequently asked questions

Yes. New Construction loans are available statewide in Illinois through approved lenders, subject to county loan limits where they apply.

Often yes. Illinois Housing Development Authority (IHDA) and local programs frequently pair assistance with FHA, conventional, VA or USDA first mortgages. Eligibility depends on income, price and program rules.

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Figures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.