Illinois Extends and Expands Affordable Housing Tax Credit in FY2027 Budget (Chicago, IL) – Affordable housing advocates are celebrating a major housing investment included in Illinois’ Fiscal Year 2027 budget, which extends and expands the state’s Affordable Housing Tax Credit program for the next decade.
The Illinois Housing Council (IHC) praised Gov. JB Pritzker and the Illinois General Assembly for approving Senate Bill 3019, which includes a 10-year extension of the Illinois Affordable Housing Tax Credit (IAHTC) and increases the program’s annual allocation growth rate from 5% to 10%.
Housing advocates say the move represents one of the state’s most significant affordable housing investments in recent years and will help support the development and preservation of affordable homes across Illinois.
Under the legislation, the tax credit program will receive $41.8 million in Fiscal Year 2027. The increased growth rate is expected to generate an additional $164.4 million in funding over the next 10 years.
For more than 20 years, the IAHTC has encouraged private donations of cash, land and buildings to nonprofit housing developers, helping finance affordable housing projects throughout the state. According to the Illinois Housing Council, the program has leveraged more than $510 million in private contributions and supported the creation or preservation of more than 26,000 affordable housing units.
“This is a tremendous victory for Illinois communities struggling with housing affordability challenges,” said Allison Clements, executive director of the Illinois Housing Council. “At a time when nearly 300,000 affordable rental homes are missing for Illinois’ lowest-income residents, lawmakers chose to strengthen a proven tool that leverages private investment, supports local development, and creates housing opportunities in communities of every size.”
The expanded tax credit is expected to benefit nonprofit developers, local governments and private-sector partners working on affordable rental housing, workforce housing, senior housing, homeownership opportunities and neighborhood revitalization projects.
The FY2027 budget also includes $250 million in additional housing-related investments through the Illinois Housing Development Authority (IHDA) and the Illinois Department of Commerce and Economic Opportunity (DCEO).
Among the new investments are:
- $100 million for a new Missing Middle Housing Infrastructure (M2I) Grant Program administered by DCEO.
- $100 million for affordable and missing middle housing programs administered by IHDA.
- $50 million for IHDA’s Opening Doors and SmartBuy down payment assistance programs.
The funding was approved despite the legislature not advancing Gov. Pritzker’s broader BUILD housing package during the spring legislative session.
Clements said the budget demonstrates a commitment to addressing housing affordability through multiple approaches.
“These investments demonstrate that Illinois leaders recognize the importance of addressing housing affordability through multiple strategies,” Clements said. “While conversations about broader housing reforms will continue, this budget delivers meaningful resources that will help create housing opportunities, strengthen communities, and support economic growth throughout Illinois.”
The Illinois Housing Council said it will continue working with lawmakers, state agencies, housing developers and local governments as implementation details for the expanded tax credit and housing programs are finalized.
Advocates argue the investments represent a significant step toward addressing Illinois’ housing shortage and expanding affordable housing opportunities statewide.
Illinois Extends and Expands Affordable Housing Tax Credit in FY2027 Budget
