CHICAGO, IL — The Illinois Housing Council (IHC) has applauded Governor JB Pritzker and members of the Illinois General Assembly for including a 10-year extension and meaningful expansion of the Illinois Affordable Housing Tax Credit (IAHTC) in the Fiscal Year 2027 budget package signed into law through Senate Bill 3019.
The action represents one of the most important investments in affordable housing financing made by the state in recent years and ensures that one of Illinois’ most successful public-private housing partnerships will continue delivering results for communities across the state.
The legislation extends the Illinois Affordable Housing Tax Credit for 10 years — double the traditional five-year extension — and increases the program’s annual allocation growth rate from 5 percent to 10 percent. As a result, the IAHTC will be funded at $41.8 million in Fiscal Year 2027, with the enhanced growth rate projected to generate an additional $164.4 million in program funding over the next decade.
For more than two decades, the IAHTC has helped close financing gaps by encouraging donations of cash, land, and buildings to nonprofit housing developers. The program has leveraged more than $510 million in private donations and helped create or preserve more than 26,000 affordable homes throughout Illinois.
“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 funding capacity will help nonprofit developers, local governments, and private-sector partners advance affordable rental housing, affordable homeownership opportunities, workforce housing, senior housing, and community revitalization projects throughout urban, suburban, and rural Illinois.
IHC thanked its legislative champions, coalition partners, housing developers, local officials, and member organizations who spent the past year educating policymakers about the importance of preserving and strengthening the credit. Their collective advocacy helped demonstrate how the program creates tangible housing outcomes while leveraging substantial private-sector investment.
The budget agreement also includes important new housing investments beyond the tax credit program. While Governor Pritzker’s broader BUILD housing package did not advance during the spring legislative session, the FY2027 budget includes $250 million for new housing initiatives administered by the Illinois Housing Development Authority (IHDA) and the Illinois Department of Commerce and Economic Opportunity (DCEO).
Those investments include:
• $100 million for a new Missing Middle Housing Infrastructure (M2I) Grant Program at DCEO to support housing-related infrastructure improvements.
• $100 million for missing middle and affordable housing programs administered by IHDA.
• $50 million for IHDA’s Opening Doors and SmartBuy down payment assistance programs.
“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 will continue working with state agencies, legislators, local governments, developers, and community stakeholders as implementation details emerge for both the expanded tax credit and the new housing investments included in the budget.
IHC expects to provide members with a comprehensive legislative update in the coming weeks, including guidance regarding implementation timelines and funding opportunities through IHDA and DCEO.
“Today’s action sends a clear message that Illinois is committed to expanding housing opportunity,” Clements said. “By extending and strengthening the Affordable Housing Tax Credit while making meaningful new housing investments, Illinois has taken an important step toward addressing one of the state’s most pressing challenges.”
ABOUT IL HOUSING COUNCIL
The Illinois Housing Council (IHC) brings together industry leaders and policy makers to meet the fundamental need for affordable housing in Illinois, opening doors to greater opportunity for all residents. IHC’s membership includes over 270 private businesses and nonprofit organizations active in the development and preservation of affordable housing across Illinois – including developers, lenders, property managers, architects, general contractors, and service providers.