Help is on the way for unemployed and underemployed homeowners in Chicago from the “Hardest Hit” fund, a federally-funded program that will provide housing aid to some of the most disadvantaged homeowners in the area.
Using a pool of $345 million, the fund offers up to $25,000 in assistance to as many as 15,000 struggling homeowners. The criteria for the assistance is clear: the homeowner’s income must have dropped by at least 25 percent, and after receiving the 10-year, forgivable loan to reverse the property’s delinquency, the homeowner must keep the property current for 18 months. If that criteria is met, the loan does not have to be repaid.
Mary Kenney, the executive director of the Illinois Housing Development Authority, said the program will work because it directly makes delinquent mortgages current, rather than dealing with the missed payments and fees that have crippled the White House’s Home Affordable Modification Program.
“It’s a big dent,” Kenney said. “The reality is the (foreclosure) problem is bigger than any (one) of us can solve. (The program) can do a lot in the short term.”
Other requirements of the program include: loans must be fixed-rate or adjustable-rate, and homeowners may not owe more than $500,000 on the property; annual household income must be at or below 120 percent of the area median income; and, second mortgages are not applicable. Though foreclosures will be considered, they may be rejected if the foreclosure proceedings are nearing completion.
More information can be found at IllinoisHardestHit.org. Illinois was one of 18 states to receive money for the program, but is the last to formally implement the funds. Kenney said this is intentional. And she’s hoping the program is successful as a result.
“We took a very deliberate approach,” Kenney said. “It’s a program that, frankly, is unlike anything this agency has undertaken. It was an amazing amount of infrastructure. A lot of states launched without carefully setting up that infrastructure.”