Financing Your Home Remodel in Illinois
Breathtaking design for home living.
Explore the smartest ways to fund your Illinois home remodel — from local bank loans and government programs to region-specific grants and expert planning tips.
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Financing Your Home Remodel in Illinois
Remodeling your home in Illinois can be one of the most rewarding investments you’ll ever make. Whether you’re upgrading a kitchen, adding a new bathroom, finishing a basement, or improving energy efficiency, understanding your financing options is critical. Fortunately, homeowners in Illinois have access to a wide variety of remodeling loans, grants, and financial products tailored to different regions and needs.
This guide explores financing solutions for home renovations across Illinois, from Chicago and the suburbs to Central and Southern Illinois. We’ll break down options by loan type, bank programs, government incentives, and provide tips on choosing the best fit for your goals.
Table of Contents
Why Financing Your Remodel Is a Smart Move
Overview of Popular Remodeling Loan Types
Illinois-Based Bank and Credit Union Options
Government and Local Programs in Illinois
Regional Loan Options Across Illinois
Tips for Comparing Loan Options
When to Consult a Financial Professional
Internal Resources from IllinoisRDN
External Resources and Links
1. Why Financing Your Remodel Is a Smart Move
Using financing to fund your renovation allows you to increase your home’s value without depleting your savings. A well-planned remodel can offer high ROI, energy savings, and improve your quality of life. Financing options today are more flexible than ever, with options tailored to credit profiles, income levels, and property types.
Explore our guide on the Top 10 Home Remodeling Projects for ROI in Illinois for inspiration.
2. Overview of Popular Remodeling Loan Types
A. Home Equity Loans
Fixed interest rates
Use your home as collateral
Ideal for large projects like additions, kitchens, or roof replacement
B. HELOCs (Home Equity Line of Credit)
Variable interest rate
Draw funds as needed, ideal for phased remodeling
C. Cash-Out Refinance
Replaces your existing mortgage with a larger one
Use the difference for remodeling
D. Personal Loans
Unsecured, so no home equity needed
Higher interest rates but quicker approvals
E. FHA 203(k) Loans
Backed by the government
Wraps remodeling costs into your mortgage
F. Fannie Mae HomeStyle Renovation Loan
Similar to FHA 203(k) but available to conventional loan borrowers
Can finance luxury renovations too
3. Illinois-Based Bank and Credit Union Options
Below are some top banks and credit unions in Illinois offering home improvement loans:
Northern Illinois (Chicago & Suburbs)
Wintrust Bank: Offers home equity loans and HELOCs. Their Home Equity Plus program is ideal for large-scale remodels.
Alliant Credit Union (Chicago): Competitive rates on personal home improvement loans with flexible terms.
BMO Harris Bank: Offers both HELOCs and refinancing options with remodeling calculators.
Central Illinois
CEFCU (Peoria): Personal and secured home improvement loans with low fixed rates for members.
Heartland Bank and Trust (Bloomington & Normal): Specializes in HELOCs and fixed equity loans. Visit Heartland Bank for tools and calculators.
Southern Illinois
Bank of Springfield (BOS): Offers cash-out refinancing and personal renovation loans.
First Mid Bank & Trust (Mattoon, Decatur, etc.): Known for their renovation loans for rural and suburban properties.
4. Government and Local Programs in Illinois
A. Illinois Housing Development Authority (IHDA)
Offers renovation-friendly mortgage products like the IHDAccess Forgivable Mortgage, which includes grant assistance for remodeling costs.
B. Weatherization Assistance Program (WAP)
For low-income households across Illinois.
Covers energy-efficient upgrades (insulation, HVAC, windows).
C. City and County-Specific Programs
Chicago Bungalow Association: Energy savers grant for vintage homes in Chicago.
Cook County HOME Program: Financing for moderate-income residents to make home repairs.
Champaign-Urbana Home Improvement Program (CUHIP): Zero-interest loans for eligible homes in Urbana and Champaign.
5. Regional Loan Options Across Illinois
Cook County and Chicagoland
Check your municipality’s website for neighborhood-based renovation grants.
Example: Berwyn’s CDBG Home Rehab Program offers up to $25,000 in forgivable loans.
Central Illinois
Decatur Urban Renewal: Offers matching funds for exterior home improvements in target neighborhoods.
Peoria’s Homeowner Rehabilitation Program: Grants for health and safety renovations.
Southern Illinois
Egyptian Area Agency on Aging (EAAA): Minor home repair funding for seniors.
St. Clair County Community Development: Offers deferred-payment loans for low-income households.
6. Tips for Comparing Loan Options
Check APR, not just interest rate: APR includes fees, giving a more accurate picture.
Evaluate your repayment timeline: Longer terms mean smaller monthly payments but more interest overall.
Consider credit impact: Unsecured loans may have greater impact on your credit score.
Account for contractor payment schedules: Some lenders pay the contractor directly, while others disburse funds to you.
7. When to Consult a Financial Professional
A mortgage broker, financial advisor, or lending officer can help you:
Estimate your borrowing power
Structure a loan around your monthly budget
Compare multiple offers
Understand tax implications
Local Illinois professionals will also be more familiar with regional incentives and local bank offerings.
8. Internal Resources from IllinoisRDN
Each of these resources ties into planning and budgeting your remodel wisely.
9. External Resources and Links
Final Thoughts
Financing your Illinois remodel is easier than ever thanks to a variety of state-specific options. Whether you’re in Chicago, Champaign, or Carbondale, there are programs and lenders ready to support your goals. By comparing loan types, exploring regional opportunities, and consulting experts, you’ll be well on your way to transforming your home into a more comfortable, valuable space.
Have questions about planning your renovation budget? Contact the Illinois Remodeling & Development Network for advice or contractor referrals.
