Illinois

Illinois has seen growing interest in accessory dwelling units, particularly in Chicago, where a 2020 ordinance legalized ADUs in residential zones citywide. The program has been one of the most-watched municipal ADU experiments in the Midwest. ADU Pass helps Illinois homeowners navigate the permitting process from application to approval.

1,729 ZIP codes
102 Counties
1,186 Cities

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State ADU details

State financing programs

Illinois does not operate an ADU-specific statewide loan, grant, or forgivable-loan program. The Illinois Housing Development Authority (IHDA) is the state's housing finance agency and administers a robust portfolio of homebuyer products: Access Forgivable, Access Deferred, Access Repayable down-payment-assistance variants, the IHDA Mortgage first-mortgage product, and the federal Low-Income Housing Tax Credit allocation. The 2025 IHDA Access Home program offers DPA equal to 6% of purchase price up to $15,000. None target ADU construction directly; an ADU-bearing primary residence on an Illinois lot can qualify for the underlying mortgage when other criteria are met.

checked 2026-04-26

State insurance regimes

Illinois operates a state FAIR Plan through the Illinois FAIR Plan Association (https://www.illinoisfairplan.com/), a not-for-profit residual market formed in 1968 and supported by ~500 member insurers. The plan offers Dwelling Property, Commercial Property, and a wide range of Homeowners, Condominium, Renter, and Rental-Dwelling coverages statewide. Eligibility requires at least three declines from admitted-market insurers and that the property meet basic fire, loss-prevention, and safety standards. Rate changes effective 2025-04-01: Dwelling Fire policies +13.8% statewide average; Homeowners policies +11.6% effective 2026-04-01. The Illinois Department of Insurance regulates standard property products under the Illinois Insurance Code (215 ILCS 5/). ADU-relevant exposures are urban fire, severe convective storm (hail in central and southern Illinois), and tornado; Illinois has no coastal exposure.

checked 2026-04-26

Known state issues (2)

  • legislative-session (since 2025-03) — ADU rules in Illinois remain a city-by-city and county-by-county matter through at least the 2026 session. Practitioners should monitor HB 1814 progression but rely on local ordinances for current rules. (source)
  • policy-review (since 2025-09) — ADU access in Illinois is concentrated in Chicago and the immediate suburbs. Outside Cook County and the collar counties (DuPage, Kane, Lake, McHenry, Will), most Illinois jurisdictions either prohibit ADUs outright or have no ADU-specific code section. (source)
Federal (United States) — ADU-relevant rules and programs

Federal ADU law

The United States has no federal statute that directly regulates accessory dwelling unit entitlement or design. Land-use authority over ADUs resides with states and local governments under the traditional police power. Federal engagement is limited to financing (Fannie/Freddie/FHA/VA/USDA), flood insurance (FEMA/NFIP), and discretionary housing programs (HUD), which are recorded in sibling sections of this file.

checked 2026-04-20

Federal financing programs

Federal housing-finance agencies and GSEs set nationwide underwriting rules that govern whether an ADU can be financed, appraised, and counted toward mortgage qualifying income. The relevant actors are Fannie Mae, Freddie Mac, FHA (HUD), VA, and USDA Rural Development.

checked 2026-04-20

Federal tax credits

There is no ADU-specific federal tax credit. ADUs may incidentally qualify for existing federal energy-efficiency and clean-energy tax credits when the ADU construction includes qualifying measures.

checked 2026-04-20

Federal housing programs

HUD administers several discretionary programs that can fund ADU-related activity at the grantee's election, but none is an ADU-specific program.

checked 2026-04-20

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