Housing is in short supply in Bloomington-Normal, leading some to look outside the Twin Cities for their slice of the American dream.
“People that are on the fence that want to buy a house, but aren’t really dead set on living in Bloomington-Normal — that frees up a lot of options for them,” said Grant Bellis, a senior loan officer with First State Mortgage in Bloomington.
It can be cheaper to live in a small town, but rural McLean County isn't immune to rising costs, rising interest rates and shrinking availability. McLean County’s smaller communities might be seeing a ripple effect of population bloat in Bloomington-Normal. And with inventory in McLean County’s small towns especially slim, people are looking to small communities because they want to — not because they have to.

“Some people just like the small-town living,” said Tracy Patkunas, a veteran Realtor with RE/Max Rising and president of the Mid-Illinois Realtors Association. “They like knowing all their neighbors and knowing everyone in the community. I think that’s what draws a lot of people to the smaller towns.”
The U.S. Department of Agriculture’s Rural Development Program further incentivizes purchasing a home in communities with fewer than 20,000 people like Hudson, Heyworth, Downs, Towanda, McLean and Carlock, among others.
The zero-down loan for lower income borrowers can be paired with other benefits like those offered for veterans or first-time home buyers. And as long as buyers continue to qualify on income and population size, they can take out another USDA loan on another home purchase.
According to the McLean County clerk's recording division, First State Mortgage handles the lion’s share of mortgages, grossing nearly $142 million in home loans last year. The total number of loans to borrowers decreased from 2023 to 2024, but they more than doubled USDA loans. They brokered 30 rural development loans for $3.5 million in 2023 and 64 loans last year, grossing $7 million.
“In our little slice of the pie in mortgage lending, that does speak that people are more apt to maybe thinking about going out to a rural community,” said Bellis, who lived in Heyworth for two decades.
Of course, that’s assuming you can find a house.
A snapshot of available properties taken last week showed just 31 properties for sale outside Bloomington and Normal. A house rarely stays on the market for more than a few days. It’s even more dire for renters, who have extremely limited options in small communities.

Century Oaks to (finally) break ground
Development projects are especially tough to get off the ground, so home buyers looking outside the Twin Cities are generally limited to existing homes. A notable exception is the long-delayed Century Oaks subdivision near downtown Lexington which, for now, is still an open field behind a Dollar General with a "coming soon" sign.
“We got delayed on the curb and gutter and streets going in because of the weather,” Mayor Spencer Johansen said in a recent interview. “I think first opportunity they’ll be out there to do those, but I understand there’s going to be a house built, probably, as soon as they can break ground.”
First priority will go to lots that already have sold.
Johansen said a second subdivision planned for the future is likely to run smoother after “learning a lot” bringing Century Oaks to the finish line. In addition to single-family properties, Century Oaks has some duplexes and multifamily options that Johansen said appeals to Lexington's empty nesters looking to downsize. Such alternatives have been in particularly short supply. Of the aforementioned 31 properties available in rural McLean County, just one was a condo — and it’s in Lexington.
“How do we attract a developer to put a subdivision in our towns?” said Johansen, who also chairs the McLean County Mayors Association. “We don’t have the amenities Bloomington-Normal has, so we have to think outside the box.”
Proximity to an interstate highway, a dedicated school district and city sewer hook-up are marks in some communities’ favor. Others struggle to attract developers and buyers, leading to population decline.

As one example of “outside the box” thinking, the mayors association worked with the county to allocate pandemic relief money to 11 rural communities. That allowed Saybrook to update water lines and install a new water tower — an expense that otherwise who have been shouldered by its 650 taxpayers.
Johansen also is working with the governor's office to incentivize state investment, easing the financial burden on the developer.
“The staggering cost of infrastructure is what slows a lot of the developers down,” he said.
Johansen said one learning curve included the discovery that Corn Belt Electric requires developers to pay nearly $80,000 for the first phase of Century Oaks.
“Now, he’ll get that back as the houses sell, but no developer wants to sit on that money and wait until a lot sells to get his money back,” he said.
If the state were to subsidize those infrastructure investments, Johansen thinks it would be easier to attract new construction to Lexington and other small communities.
“In Lexington, once that subdivision is complete, under our subdivision code, they’re required to sign it over to us. Then, we maintain the streets and everything else,” Johansen said. “So, it’s going to be ours anyway.”
Even in a tough market, Bellis said now is an ideal time to buy.
“Prices are probably not going to go down,” he said, noting record-low interest rates combined with low home prices — like those available in 2020 and 2021 — are unlikely to return. Borrowers waiting for the right interest rate, or the right price, or the right property, might just keep waiting.