Cook County, which holds almost all of Chicago, assesses and regulates property differently from DuPage, Will or Lake next door. This page covers that line, Chicago's layered transfer taxes, the property tax a rental really pays, foreclosure redemption, and how to size hard money, fix and flip and DSCR loans across the state.
Cook County or the collar counties: decide first
Almost all of Chicago sits in Cook County, along with suburbs such as Evanston, Oak Park, Cicero, Skokie, Schaumburg, Orland Park and the south suburbs. DuPage, Will, Lake, Kane, McHenry and Kendall counties surround it. The same house on either side of that line is assessed on a different system, can carry different transfer taxes, and, in Chicago, falls under a stricter landlord ordinance.
Investors who want Chicago-area deals with simpler rules often work Naperville, Aurora, Joliet, Waukegan or Elgin instead of the city. Investors who stay in Chicago do it for the two-flats, the rent and the volume of older stock. Either works, but check the county of the exact address, not the mailing city, before you run the numbers.
Chicago's transfer taxes hit a flip on the way in and on the way out
Chicago layers its own real estate transfer tax on top of the state and county stamps. Under the city code, the buyer pays $3.75 per $500 of the price, and the seller pays a separate transit portion of $1.50 per $500. The seller also pays the smaller state and Cook County stamps. The state adds $0.50 per $500 and Cook County $0.25 per $500, both customarily paid by the seller. The 2024 Bring Chicago Home measure, which would have raised the city rate on expensive sales, failed at the ballot, so the flat city rates remain.
A Chicago flip pays both sides. Buy for $240,000 and the city's buyer tax is $1,800. Sell for $320,000 and the seller's transit portion is $960, before the state and county stamps. Around $3,000 of transfer tax on one flip is normal in the city, and many suburbs levy their own municipal transfer taxes at varying rates. Get the figures from your title company or closing attorney, and put them in the budget on day one.
The property tax a rental pays in Illinois
Illinois taxes property on a fraction of its value. Outside Cook County, property is assessed at one third of market value. Cook County uses its own classes: most residential property, including smaller rental buildings, is assessed at 10 percent, and commercial property at 25 percent, before the state equalization factor is applied. Cook County reassesses on a three-year cycle by region; the City of Chicago was last reassessed in 2024.
Local tax rates are high, and a rental does not get the homeowner exemption the seller may have claimed. Cook County also bills in two installments, and the first is generally 55 percent of the prior year's total bill, so a year of rising taxes shows up late. Budget the tax on the value after renovation, with no owner exemptions, and have your closing attorney check the proration.
Foreclosure and redemption in Illinois
Illinois forecloses through the courts, and the process is slow, especially in Cook County. For residential property the owner generally has a redemption period that runs until the later of seven months from service of the summons or three months from the judgment, and the sale must be confirmed by the court before the buyer receives a deed.
For an investor that has two consequences. A sheriff's or judicial sale purchase is not final until confirmation, so the lender will not fund against it until title is insurable. And distressed sellers can stay in the property for many months, so a pre-foreclosure purchase directly from the owner, closed with a title company, is often the cleaner route. Ask a title company what it will insure before you bid.
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Chicago and the rest of Illinois
Chicago-area inventory has been tight, which supports resale prices but leaves less room between the purchase price and the after-repair value for the renovation margin. Price every deal from renovated comparable sales on nearby blocks, not a citywide median.
For buy-and-hold investors in Chicago, the city's Residential Landlord and Tenant Ordinance sets strict rules on security deposits, interest on deposits, receipts and repairs, with penalties that can reach twice the deposit. Know them before you lease.
Outside the Chicago area, Rockford, Peoria, Springfield and Champaign offer lower entry prices. On a low-priced house, check that 70 percent of the after-repair value covers enough of the purchase and the work, and that there are enough recent renovated sales nearby to support it.
DSCR loans in Illinois: the investor loan searched for most
In Illinois, more investors search for a DSCR loan than for hard money itself. A DSCR loan qualifies the property, not your personal income: the rent must cover the payment, including principal, interest, taxes and insurance. That makes Chicago two-flats and suburban single-family rentals natural fits.
Our lending partners' DSCR rental program has no minimum credit score, lends from $75,000 to $2 million, and goes up to 80 percent of value on a purchase or rate-and-term refinance. The lender sets the rate for each file. In Illinois, the property tax line usually decides whether the rent covers the payment.
Fix and flip loans in Illinois: how the loan gets sized
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. For fix-and-flip, rehab and bridge loans, standard pricing starts at 12.99 percent plus 2.99 points. Borrowers who have paid off two loans with the lending partner in good standing can qualify for loyalty pricing of 10.99 percent plus 1.99 points.
The programs lend up to 70 percent of the after-repair value and up to 100 percent of cost, whichever limit is reached first, with a minimum loan of $50,000 and a minimum credit score of 600. Leverage depends on the projects you can document over the past three years, and the lender may set leverage differently by market, so confirm it for your address. The property must be non-owner-occupied and held in an LLC or corporation.
A Naperville example: a house worth $450,000 after renovation supports up to $315,000 at 70 percent. If purchase and renovation cost $330,000, the investor brings about $15,000, plus closing costs, transfer taxes and cash to carry the loan.
Illinois pre-offer checklist
1. Confirm the county. Cook and the collar counties assess, tax and regulate differently.
2. Confirm the loan size for your address with the lender before you offer, and work out your cash.
3. Add the transfer taxes, the city's buyer tax on the way in and the seller's taxes on the way out, plus any suburban municipal tax.
4. Budget the property tax at the value after renovation, with no homeowner exemption.
5. At a foreclosure sale, plan for redemption and court confirmation before you count on title.
6. Get written contractor bids and add a ten percent contingency for old Chicago masonry and plumbing.
7. For a rental in Chicago, read the landlord ordinance before you sign a lease.
What gets an Illinois deal declined
A budget with no transfer tax in it. In Chicago it is thousands of dollars across both ends.
A tax line copied from the seller's bill, with exemptions the investor will not get.
A downstate after-repair value too thin to carry the loan.
A full gut as your first project with no track record behind the budget.
A two-flat where you live in one unit. If you or a close family member will live in the property, even in one unit of a building you rent out, it is owner-occupied, and our lending partners finance non-owner-occupied investment property only.
Want the long version? Two free landlord books cover what a rental really costs to hold and what the new federal housing law actually changed.
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Questions investors ask
What do hard money lenders charge in Illinois?
Our lending partners' fix-and-flip pricing starts at 12.99 percent plus 2.99 points. Loyalty pricing of 10.99 percent plus 1.99 points can apply after two loans are paid off in good standing. In Chicago, the transfer taxes, appraisal, title and closing costs come on top.
Can I get a hard money loan in Chicago?
Yes. Our lending partners review deals in Chicago, suburban Cook County and the collar counties. Leverage can vary by market and by your experience, so confirm the loan size for the exact address with the lender before you go under contract.
How much is the Chicago transfer tax on a flip?
The city charges the buyer $3.75 per $500 and the seller a $1.50 per $500 transit portion, and the seller also pays the state and Cook County stamps. A flip pays the buyer side when you buy and the seller side when you sell.
Can I get a DSCR loan on a Chicago two-flat?
Yes, as long as you will not live in either unit. Our lending partners' DSCR program lends from $75,000 to $2 million, up to 80 percent of value on a purchase, with no minimum credit score, sized on the rent after taxes and insurance.
How long is the foreclosure redemption period in Illinois?
For most residential property, until the later of seven months from service of the summons or three months from the judgment. The court must then confirm the sale, so an auction purchase is not final right away.
Can I get a fix and flip loan in Illinois with no experience?
A first-time borrower can apply with a 600 credit score or higher. Expect leverage at the lower end of the range and a close look at the renovation budget, since leverage depends on the projects you can document over the past three years.
Sources
- City of Chicago, real property transfer tax, the $3.75 buyer and $1.50 seller rates per $500
- Illinois Department of Revenue, real estate transfer tax, the state rate of $0.50 per $500
- Cook County Assessor's Office, 10 percent residential assessment level and the triennial reassessment cycle
- Illinois Code of Civil Procedure, Article XV (mortgage foreclosure), residential redemption period and confirmation of sale
- City of Chicago, Residential Landlord and Tenant Ordinance, deposit rules and penalties
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.