Rent-to-own homes in Illinois

Is your deal an installment sales contract?

The Act covers “any contract or agreement, including a contract for deed, bond for deed, or any other sale or legal device whereby a seller agrees to sell and the buyer agrees to buy a residential real estate, in which the consideration for the sale is payable in installments for a period of at least one year after the date of sale, and the seller continues to have an interest or security for the purchase price” (765 ILCS 67/5). It applies to homes with one to four units, to contracts signed on or after January 1, 2018, and only to a seller who enters into such contracts “more than 3 times during a 12-month period.”

• If your contract commits you to buy and your payments go toward the price, it may be an installment sales contract. The Attorney General's required notice says these are “often called a ‘rent-to-own’ contract or a ‘contract for deed’” (Illinois Attorney General).
• If your lease only gives you the option to buy, with no duty to buy, the Act doesn't clearly apply: it never mentions leases or options. Have a lawyer or a HUD-approved counselor look at yours.
• A one-off seller falls outside the Act, but an older law still applies to any owner selling a home of 12 or fewer units by installment contract: the contract is voidable by the buyer unless it includes a certificate of code compliance or, failing that, either a written warranty that the seller received no code-violation notices in the past 10 years or a list of all such notices (765 ILCS 75).

What the Installment Sales Contract Act requires

• A notarized contract. Until both sides have a copy signed by both and notarized, either can cancel, and the seller must refund everything paid (§ 10(b)).
• 28 disclosures, including the price, payments and late fees, any balloon payment, who pays taxes and insurance (the seller, unless the contract says otherwise), unpaid back taxes, known liens and mortgages, when you get title, who pays for repairs, an amortization schedule, and a note that you may get an independent inspection and appraisal before signing (§ 10(c)).
• Recording within 10 business days. If the seller doesn't record the contract or a memorandum of it, you can cancel until they do and get all your money back. A clause forbidding you to record it is void (§ 20).
• A 3-business-day cooling-off period after both sides accept the final contract, with the Attorney General's notice handed to you. It can't be waived (§§ 70, 75).
• 90 days after a missed payment before the seller can take action, and you can cure by paying what's due in that time (§ 40).
• Other protections: the seller pays for repairs the contract doesn't assign to you, no prepayment penalty, a free account statement once a year on request, and none of it can be waived. A violation is an unlawful practice under the Consumer Fraud Act (§§ 25, 30, 50, 60, 85).

Lease-options: the seller disclosure report

The Residential Real Property Disclosure Act applies to a transfer by “installment land sale contract … lease with an option to purchase” and other forms (765 ILCS 77/10). For a home of one to four units, the seller must give you the written disclosure report before you sign, and must disclose material defects they actually know about. If the seller never gives you the report, you can end the contract before the transfer. A seller who knowingly gives false information owes your actual damages and court costs, and may have to pay your attorney's fees. Claims must be brought within one year (§§ 20, 25, 55, 60).

If you fall behind

• A contract buyer gets 30 days. Before an eviction case, a written demand must give a contract purchaser at least 30 days to meet it (735 ILCS 5/9-104.1).
• Past a point, the seller must foreclose. For a residential installment contract, once less than 80% of the original price is still unpaid, the seller has to use foreclosure, not eviction (735 ILCS 5/9-102, 15-1106).
• After an eviction judgment, the court may pause it up to 60 days, and must pause it 180 days if less than 75% of the price is unpaid; paying what's due in that time keeps the contract in force (735 ILCS 5/9-110).
• A plain tenant behind on rent can get as little as a 5-day notice (735 ILCS 5/9-209). Which rules apply to you depends on how your contract is written, so get advice early.

Illinois Legal Aid Online warns that “If the seller has debts, liens, or back taxes, the buyer could lose the home, even if the buyer pays on time” (contract for deed FAQ). The Attorney General's consumer line is 1-800-544-7151.

Statewide homebuyer programs

IHDA Mortgage listed four down payment programs as active on Oct 19, 2026: IHDAccess Home (6%, up to $15,000, deferred, for first-time buyers, veterans, or targeted areas), IHDAccess Forgivable (4%, up to $6,000, forgiven over 10 years), IHDAccess Deferred (5%, up to $7,500), and IHDAccess Repayable (10%, up to $10,000, repaid monthly at 0% interest). All need a 640 credit score, a contribution of at least 1% of the price or $1,000, whichever is greater, a debt-to-income ratio of 50% or lower, and pre-purchase education. IHDA says funding can change at any time (IHDA Mortgage).

Local guide

For Cook County record searches, Chicago's HomeGrown grant, the city's landlord-tenant ordinance, and HUD-approved counselors, see rent-to-own in Chicago.