Looking to buy a house in Peoria? This program could help with a down payment

A program designed to help Peorians afford down payments on homes is increasing the amount of money people can receive in aid.

Peoria's Down Payment and Housing Rehabilitation Program is funded through the American Rescue Plan Act, and because of that, Peoria is on a deadline to spend the money by 2026. So, Peoria is raising the amount of money it can give prospective homeowners from $5,000 to $10,000.

To be eligible for the $10,000 down payment, the prospective buyer must be purchasing a home that was previously non-owner occupied for at least two years in a qualified census tract from an investor or landlord. The buyer would also have to agree to live in the home for two years. This would turn rental properties into owner-occupied homes.

Not only is time running out for Peoria to spend the money, but community development director Joe Dulin told the Peoria City Council — which approved the plan Tuesday night — that high interest rates and low available housing stock had also put a strain on prospective homebuyers entering the market.

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Dulin also told the council those factors made the market favorable to investors who "bring cash to the table," and the city has seen an increase in the number of property investors buying homes in Peoria. He said this program should increase the number of owner-occupied homes in Peoria.

"In neighborhoods, we want to make sure there is quality rental properties, but ... owner-occupied properties are very important for the stability in the long-term," Dulin said.

The purchase price of the home must also be less than $125,000. There is no income requirement for the program.

"This is a very creative use of ARPA money, it should make it easier in some of our more difficult neighborhoods to improve home ownership," city councilman John Kelly said.

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