Illinois Hardest Hit Program

The Illinois Hardest Hit Program provides mortgage payment assistance to struggling homeowners.

The Illinois Hardest Hit Program, which is funded through the federal Hardest Hit Fund, provides financial assistance to eligible homeowners struggling to avoid foreclosure. Keep reading to get an overview of the program, learn how much assistance is available, and find out if you're potentially eligible. (To learn about foreclosure procedures in Illinois, and programs to assist Illinois homeowners, visit our Illinois Foreclosure Law Center.)

Hardest Hit Fund

In 2010, the U.S. Department of the Treasury created the Hardest Hit Fund to provide targeted aid to homeowners in those states most affected by the housing market crash. As part of this program, $7.6 billion in aid was allocated to the 18 states, including Illinois, along with Washington, D.C., that experienced the most extreme home price declines and high unemployment rates as a result of the economic crisis. (Learn more about the Hardest Hit Fund.)

Illinois was originally awarded over $445 million in funds through the Hardest Hit Fund to help eligible homeowners avoid foreclosure, so the state started its Hardest Hit Program. In 2016, the government gave Illinois an additional $269,474,060. Illinois has until 2020 to distribute all of the money it received, but the program could potentially end earlier if the money runs out.

The Illinois Hardest Hit Program

The types of mortgage assistance available under the Illinois Hardest Hit Program as of March 2019 are:

Reinstatement Assistance and Monthly Mortgage Payment Assistance

Reinstatement assistance is a one-time payment covering past-due mortgage payments, fees, and penalties in full. Monthly mortgage payment assistance program provides money to pay monthly mortgage payments. Eligible homeowners can receive up to $35,000 or 12 months of assistance, whichever occurs first.

Borrower eligibility. To be eligible for this kind of assistance, you must meet all of the below criteria.

  • You must have a documented reduction in income of at least 15%, which happened due to a hardship that was no fault of your own. Qualifying hardships include unemployment, underemployment, loss of business income, disability, death of a spouse, or divorce.
  • Your household income can't be more than 120% of the area median income.
  • You can't have more than $17,500 in liquid assets, excluding retirement accounts.
  • You must not have been convicted of a mortgage-related felony in the last ten years.

Home and other eligibility criteria. Additionally, your existing mortgage and the property securing the mortgage must meet the below criteria.

  • The property must be in Illinois.
  • The property must be your primary residence.
  • The property must be a single-family home, condominium, townhome, or one-to-four unit dwelling (so long as you live in one of the units). Mobile or manufactured homes are eligible if permanently affixed to real estate owned by the applicant. (Learn more about what happens if you are struggling to pay your manufactured home loan.)
  • The principal loan balance can't exceed $500,000.
  • The loan must be a first-lien mortgage.
  • The loan must be a fixed-rate or an adjustable-rate loan, not an interest-only or negative-amortization loan.

You might have to meet additional criteria as well. Also, eligibility requirements might change so be sure to check out the program FAQ to find the latest updates.

Reverse Mortgage Assistance

Senior homeowners with a reverse mortgage who are delinquent on real estate taxes can get up to $35,000 to pay the overdue amount and up to two years of future tax and insurance payments.

Borrower eligibility. To be eligible for this kind of assistance, you must meet all of the below criteria.

  • You must have an FHA-backed reverse mortgage secured by a property in Illinois.
  • You must reside in the house as your primary residence.
  • You must have fallen behind on real estate taxes.
  • Your household income must be lower than 120% of your county’s median income
  • You must agree to participate in free housing counseling.

Again, you might have to meet additional criteria, so review the program FAQs to find the latest requirements.

How the Illinois Hardest Hit Program Works

Assistance is provided in the form of a 5-year forgivable loan secured by a junior lien that is recorded against the property. You need to repay the loan only if you sell the home at a profit or refinance during the loan term.

Beware of Scams

The Illinois Hardest Hit program is free of charge and you should not pay for any services associated with applying for assistance. Do not pay any company that promises to expedite your application or guarantees approval. (Learn about foreclosure rescue scams to avoid.)

For More Information

If you would like more information about the Illinois Hardest Hit Program, go to the Illinois Hardest Hit Program website or call 855-873-7405.

If you need information about foreclosure procedures in Illinois or want to learn about possible defenses to a foreclosure in your situation, consider talking to an attorney. If you want to learn more about different alternatives to foreclosure, including loan modifications, short sales, and deeds in lieu of foreclosure, make an appointment to talk with a HUD-approved housing counselor.

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