Thinking about restoring a classic Lake Forest home but not sure how to pay for it? You are not alone. Historic charm often comes with extra steps, from preservation reviews to specialized contractors and financing. In this guide, you will learn how the local Certificate of Appropriateness process works, which incentives you can actually use as a homeowner, and the best financing options to fund your project with confidence. Let’s dive in.
What makes Lake Forest projects different
Confirm historic status and COA needs
Before you price contractors or apply for a loan, confirm the home’s designation. Check if it is individually listed or within a National Register district on the National Park Service’s Illinois listings, then review Lake Forest’s local preservation rules. In Lake Forest, exterior changes to locally regulated properties typically require a Certificate of Appropriateness before permits are issued. The City will not act on permits until a COA is approved, and decisions include timelines and appeals.
- Review the Lake Forest ordinance and COA rules: Lake Forest Code, Chapter 155
- Check listing status: NPS Illinois historic listings
Tip: Build a few extra weeks into your schedule for COA review and potential conditions like tree protection plans, exterior lighting details, and staging or parking plans.
Which incentives you can use
Federal and state tax credits
The federal Historic Tax Credit offers a 20% income tax credit for substantial rehabilitation of certified historic buildings used for income-producing purposes. Owner-occupied single-family homes are not eligible. Illinois also offers River Edge Historic Tax Credits in specific zones, which do not include Lake Forest.
- Learn more: Federal Historic Tax Credit overview
Illinois Property Tax Assessment Freeze
For owner-occupied historic residences, the Illinois Property Tax Assessment Freeze can be a meaningful benefit. If your project meets eligibility and follows the Secretary of the Interior’s Standards, your assessed value may be frozen for eight years, followed by a four-year step-up. Qualified rehab expenses must meet program thresholds.
- Program details: Illinois Property Tax Assessment Freeze
Grants and nonprofit help
Preservation nonprofits sometimes offer small matching grants, emergency funds, or technical assistance. These are competitive and often small, but they can help with planning or specific repairs. Start with Landmarks Illinois to explore current opportunities.
- Explore options: Landmarks Illinois financial resources
Top financing options for owner-occupied homes
FHA 203(k) Rehabilitation Mortgage
The FHA 203(k) lets you finance the purchase or refinance plus renovations in one loan for a primary residence. The Standard version fits larger projects and requires a HUD consultant. The Limited version works for smaller scopes. It is helpful if you need one mortgage that wraps in rehab costs and you qualify for FHA.
- Program overview: HUD FHA 203(k)
Fannie Mae HomeStyle Renovation
HomeStyle Renovation is a conventional option that also combines mortgage and renovation funds. It can cover a wide range of projects and may suit you if you have a conventional credit profile and want flexible scope, including some luxury items.
- Learn more: Fannie Mae HomeStyle Renovation
Freddie Mac CHOICERenovation
CHOICERenovation is a comparable conventional product that finances purchase or refinance plus renovation. It supports draw schedules and broad project types. Availability varies by lender, so compare options.
- Product overview: Freddie Mac CHOICERenovation
Cash-out refi, home equity loan, or HELOC
For smaller or phased projects, tapping home equity can be straightforward. A HELOC offers flexible access, often with variable rates. Cash-out refinances and home equity loans provide lump sums. These options are simple to set up but are not tailored to contractor draw schedules.
Construction-to-perm loans
If you plan major additions or structural work, a construction-to-permanent loan can fund the build then convert to a long-term mortgage. Work with lenders that understand renovation draws and local preservation timelines.
Plan your project and budget
Follow preservation standards
Many incentives, including the Assessment Freeze, expect work to follow the Secretary of the Interior’s Standards. Even without incentives, the COA review will emphasize sensitive solutions. Plan for repair and retention of significant exterior features, and factor specialized trades into budgets.
Expect hidden conditions
Historic homes often need electrical, plumbing, or HVAC upgrades and may involve lead paint or asbestos abatement. Build a 10 to 20 percent contingency for surprises. Lenders and inspectors may require certain health, safety, or code items as part of your loan.
Align approvals and draws
Renovation loans hold funds in escrow and release them in draws after inspections. COA conditions can shift scope and cost, and that can affect lender approvals. Start the COA process early and coordinate your draw schedule with contractor milestones and inspections.
Choose the right team
For a Standard 203(k), you will need a HUD-approved consultant. For historic work, preservation-minded architects and contractors can help you meet COA expectations and program standards. Experienced pros reduce change orders and delays.
- Find a consultant: HUD 203(k) consultant roster
Step-by-step roadmap for Lake Forest homeowners
- Confirm status and rules: Verify if the home is locally regulated or on the National Register, then review the City’s COA requirements. Start conversations with City preservation staff early. Use the Lake Forest ordinance and NPS Illinois listings.
- Define scope and get bids: Separate preservation-sensitive work from general upgrades. Ask for clear line items and include specialists when needed. This helps lenders and any incentive applications.
- Decide on incentives: If you plan to live in the home, review the Illinois Property Tax Assessment Freeze. If the property will be income-producing, research the Federal Historic Tax Credit early.
- Compare financing: Weigh FHA 203(k), HomeStyle, CHOICERenovation, and home equity options for rates, down payment, draw process, and timing. Ask lenders about experience with historic projects.
- Apply in parallel: Submit your COA application while your loan is processing. Build in time for possible conditions and coordinate them with your contractor’s schedule and appraisal assumptions.
- Set up draws and inspections: Align contractor milestones with lender inspections. Keep documentation tidy for smoother disbursements and fewer delays.
What this means for resale and ROI
Not every upgrade delivers the same return. Exterior improvements and targeted interior updates often perform well for resale, while full luxury overhauls may not return dollar for dollar. In Lake Forest, sensitive restorations help preserve character and market appeal. Focus on projects that protect the home’s integrity while improving comfort and efficiency.
Ready to explore your options?
If you are weighing loans, incentives, and timelines for a Lake Forest historic home, you do not have to map it alone. Get a local strategy, lender introductions, and a clear plan that respects preservation rules and your budget. Reach out to Jennifer Haug for guidance tailored to your goals.
FAQs
What is a Certificate of Appropriateness in Lake Forest?
- A COA is the City’s approval for exterior work on locally designated or regulated properties, and permits typically cannot be issued until a COA is granted; review standards and timelines in the Lake Forest code.
Can I use the 20% Federal Historic Tax Credit on my residence?
- No, the federal credit applies to income-producing properties only, not owner-occupied single-family homes; see the NPS program overview.
How does the Illinois Property Tax Assessment Freeze help homeowners?
- For qualifying owner-occupied historic homes, the assessed value can be frozen for eight years, then step up for four years, if the rehab meets standards and spending thresholds; review details with the Illinois program guide.
Which loan is best, FHA 203(k) or HomeStyle?
- It depends on your credit profile, down payment, and scope; FHA 203(k) suits FHA borrowers who want one loan for purchase plus rehab, while HomeStyle is a conventional option with broad project flexibility.
Will window replacement for energy savings be a problem in a historic district?
- Historic reviews usually favor repair or sensitive replacement of street-visible windows; before you plan replacements, discuss options with City preservation staff and confirm what your lender and any incentives require.
How should I time my approvals and funding to avoid delays?
- Start COA and loan applications in parallel, build in weeks for review, and match contractor milestones to lender draw inspections so funds are available when work is completed.
