A virus- and oncogene-free induced pluripotent stem cell (iPSC) reprogramming method was developed with cord blood-derived mononuclear cells (CBDMNC) and peripheral blood mononuclear cells (PBMNC) from patients with genetic lung diseases. iPSC reprogramming used small molecules, hematopoietic stem cell (HSC) expansion media and episomal vectors that lacked Myc and Lin28. All iPSC colonies were fully reprogrammed based on SSEA4 expression. A total of 300,000 CBDMNC was the optimal cell number for cell reprogramming, which was associated with a 13-fold increase in CD34+ cells upon exposure to HSC media. Cell reprogramming was not observed in the absence of HSC expansion media. The method also reprogrammed PBMNC in patients with cystic fibrosis or α-1antitrypsin deficiency. Oncogene-free iPSC cell lines differentiated into all three germ cell lineages. This iPSC reprogramming approach satisfies an important regulatory requirement for iPSC-based cell therapies with lower clinical risk from CBDMNC and PBMNC.