Mayor Richard M. Daley today announced a new City program that provides help with down payment and closing costs for first-time homebuyers and the expansion of last year’s successful “Fix Your Mortgage” events aimed at helping residents determine if they are eligible for assistance under the federal “Making Home Affordable” foreclosure prevention plan.
“We are in a struggling economy in which many hardworking Chicagoans continue to face mortgage payments that have grown beyond their means and another group of our residents is finding it difficult, if not impossible to establish themselves as first-time homeowners,” Daley said in a news conference held at Morgan Park High School, 1744 W. Pryor Av.
“Finding solutions to both these problems is critical to keeping our neighborhoods strong,” he said.
The new City program is called the “Home Purchase Assistance Program.”
Through this program, for the first time, the city will offer purchase price
assistance to buyers of existing homes, and new construction housing units like those available in the mixed-income communities that are part of the CHA “Plan for Transformation.”
The City has budgeted $1 million dollars in this year’s corporate budget to support the program, which has the twin goals of helping first-time buyers with their down payment and closing costs and stimulating the housing market.
The program applies to single family homes, town homes, condominiums and properties of up to four units as long as they are owner-occupied. First-time homebuyers can also use this money in conjunction with the federal homebuyer tax credit that expires in April.
Daley said participants in the program can receive between $10,000 and $40,000 based on their incomes. The maximum eligible income for a two-person household is $60,300 and for a four-person household it is $75,400.
“Our city’s neighborhoods are filled with high-quality housing and as we all know, it’s a great time buy – if you have the resources. The Home Purchase Assistance Program is our newest tool for providing Chicagoans with those resources,” the Mayor said.
Daley also announced the City will use $1 million available through the federal economic stimulus program to sponsor six more “Fix Your Mortgage” events to help people with loan modifications.
The first “Fix Your Mortgage” event is Saturday, March 27, from 9:30 a.m. until 2 p.m. at Morgan Park High School. The next two are April 24 at Lane Tech High School, 2501 W. Addison St., and June 5 at Curie High School, 4959 S. Archer Av., both from 9:30 a.m. to 2 p.m.
The dates and locations of the other three sessions will be announced soon.
At these sessions, HUD-certified credit counselors and pro-bono real estate attorneys will help homeowners review paperwork to determine if the borrowers qualify for assistance under the “Making Home Affordable” plan. Then, the information for eligible borrowers is submitted on-site directly to the loan servicer.
Last year, the City assisted 1,200 Chicagoans at two similar events, putting them together with counselors and lenders who worked with them to ensure they get into affordable, sustainable fixed-rate mortgages so that they can stay in their homes.
The success rate at those events was twice the national average – 34 percent of Chicago residents who sought help obtained a loan modification, Daley said.
The Mayor said the City remains committed to helping people through its longstanding variety of foreclosure prevention efforts designed to encourage people to get help at the first sign of trouble when it comes to paying their mortgage.
• The Homeownership Preservation Initiative (HOPI), which connects homeowners with financial counselors by calling 311. Since 2003, the initiative has prevented more than 2,800 foreclosures, reclaimed 717 vacant, troubled buildings and counseled more than 14,500 Chicagoans.
• Borrower Outreach Days, which provide an expanded level of service in the hardest hit communities by providing working families who are at-risk of foreclosure a direct connection with lending institutions and HUD-certified counseling agencies. The City has sponsored 20 Borrower Outreach Days and helped more than 4,700 homeowners since 2007.
• An Early Warning Program, which started in 2007 and gives homeowners facing foreclosure more time to get help, work out solutions and keep their homes.
• A Neighborhood Stabilization Program strategy to acquire and redevelop vacant, foreclosed homes using $55.2 million in HUD funding; and
• A program to enhance protection for renters, who are often the innocent victims of foreclosure.
Daley thanked the partners who are helping the City with the “Fix Your Mortgage” events -- Neighborhood Housing Services of Chicago, the Attorneys' Title Guaranty Fund and MacArthur Foundation – and the Chicago Association of Realtors, which is working with the City on the Home Purchase Assistance program.
“We will continue to work side by side across the city to meet the needs of our residents and I know that by working together we will continue to help lay the foundation for sustainable and vibrant communities,” he said.
Further information about both programs is available on the City’s website, www.cityofchicago.org, or by calling 311.
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