CHICAGO – September 15, 2011. Governor Pat Quinn today announced a program to help approximately 15,000 Illinois homeowners threatened by foreclosure. The Illinois Hardest Hit program utilizes $345 million in federal funds to support working families having trouble making mortgage payments due to unemployment or under-employment.
“The economic downturn has left too many Illinois families at risk of losing their homes,” Governor Quinn said. “Everyone suffers when a home goes into foreclosure. The Illinois Hardest Hit program will help keep families in their homes, help them regain economic stability and keep our communities strong.”
The program allows eligible participants to receive up to $25,000 over 18 months as a 10-year loan to keep mortgages current and make ongoing payments, including fees and penalties. The loan is forgiven over the last five years of the 10-year term, and carries zero interest. Funds for the program are supplied by the U.S. Department of the Treasury. Illinois is among 18 states and Washington, D.C. that received funding for the program earlier this year. The Illinois Hardest Hit program will be administered by the Illinois Housing Development Authority (IHDA).
“The best way to stabilize our neighborhoods is to prevent foreclosures before they happen,” said Mary Kenney, IHDA executive director. “This program will make a difference in people’s lives and in our communities.”
Free applications for the program are available exclusively through IHDA’s Illinois Hardest Hit website: www.IllinoisHardestHit.org. Applicants will be matched with a local review agency that will answer questions, pre-screen applicants for eligibility and assist homeowners in preparing the application and assembling the required supporting documentation.
Eligibility criteria for the program include:
- Property must be located in Illinois;
- Household must have a documented income reduction of at least 25 percent due to unemployment or under-employment through no fault of their own;
- Household income must be at or below 120 percent of the area median income;
- Principal loan balance of a mortgage must not be more than $500,000;
- Household liquid assets cannot exceed 3 months of mortgage payments;
- Property, which can be a 1-4 unit building, must be the primary and only residence of all borrowers/owners;
- Homeowners must carry a fixed or adjustable rate loan; negative amortization or interest-only loans are not eligible;
- The delinquency and forward payments must fall within available assistance and program guidelines;
- Applicants must not have been convicted of a mortgage-related felony in the last 10 years.
“The Hardest Hit Fund provides Illinois and other states that were hit hardest in the housing market downturn the funds to implement local programs to assist struggling homeowners,” said Treasury Assistant Secretary for Financial Stability Tim Massad. “With these funds, Illinois can provide critical support to homeowners impacted by unemployment so they can remain in their homes and avoid foreclosure.”
Governor Quinn has long been a strong advocate for affordable housing, and his administration has championed important legislation and housing initiatives, including:
- $100 million in federal Hardest Hit funds to form public-private partnership to modify loans to affordable levels
- $130 million in the Illinois Jobs Now! capital program for affordable and supportive housing, including a development in Springfield for transitional and permanent supportive housing for Veterans and residents facing homelessness;
- $53 million in federal Neighborhood Stabilization Program (NSP) funds to enable communities to revitalize neighborhoods by returning foreclosed or abandoned properties to use through rehabilitation or new construction;
- Passing the Homeowner Protection Act;
- Extending the Affordable Housing Tax Credit through 2016 to stimulate additional affordable housing development;
- Establishing the Illinois Anti-Predatory Lending Database;
- Creating the Foreclosure Prevention Program;
- Launching www.ILHousingSearch.org, a bilingual website to match residents with specific rental housing and resources;
- Partnering with local housing agencies for IHDA’s Mortgage Relief Project outreach events;
- Creating a loan modification program for homeowners who borrowed under the state’s first-time homebuyer program;
- More than $8 million in National Foreclosure Mitigation Counseling (NFMC) funds targeted toward foreclosure and mediation through partnerships with local governments and not-for-profits.
The Illinois Hardest Hit program is funded by the U.S. Department of Treasury and does not have a fee for applying. Applicants should be aware of the prevalence for mortgage assistance fraud; no mortgage assistance program requires a fee. The official Illinois Hardest Hit website (www.IllinoisHardestHit.org) is the only website for applications.
About IHDA
The Illinois Housing Development Agency (www.ihda.org) is an independent bonding authority that finances the creation and preservation of affordable housing throughout Illinois. Since 1967, IHDA has allocated more than $10.6 billion to finance more than 215,000 affordable housing units for the residents of Illinois. IHDA sells bonds independently, based on its own good credit, to finance affordable housing in Illinois.
IS THE ILLINOIS HARDEST HIT PROGRAM FAIR TO HOMEOWNERS IN FINANCIAL TROUBLE ….
Can a struggling homeowner trying to save their home really afford to reimburse the Illinois Hardest Hit Program (IHDA) 31% + of their Existing Gross Monthly Household Income (which is probably closer to 40% of their NET SPENDABLE INCOME)? Can a struggling homeowner sustain that monthly contribution payment to IHDA during their enrollment in the program? 31% represents the Front-End Housing Ratio Rule the Treasury Dept. uses for the Hardest Hit Program in each State, a program supposedly intended for financially struggling homeowners (the Treasury Departments Making Home Affordable HAMP program also uses a 31% Rule)? The 31% Rule … is pure insanity and places a real strain on the homeowner’s ability to pay all their monthly bills and still set aside money for emergency savings.
Ever since the “Excesses” in the mortgage industry that came to a screeching halt in 2008 when our economy went into a tailspin, the mortgage industry has quietly lowered the 31% Front-End House Ratio for the average homeowner (but, still bases it on Gross Income). Of course, higher housing ratios still exist for those homeowners flush with money to spend. To date, the FHA has lowered the Housing Ratio to “29%”, Fannie Mae and Freddie Mac now recommends less than “28%” for loans they invest in, and conventional mortgage lenders now average “28%”. But not the Department of the Treasury that set up the rules, they won’t budge from 31% + of a homeowners Gross Monthly Household Income.
Back in the 70′s and 80′s the Front-End Housing Ratio hovered between 22% and 25% of a person’s “NET” INCOME. Guess what, with a more rational approach to housing costs, less people ran into mortgage problems because their mortgage payment didn’t take such a big chunk out of their “NET” spendable income. When times got difficult, homeowners could still pay the mortgage without struggling, but not true these days! How do you budget and pay your monthly bills? Do you use a Gross Income calculation or do you use a NET INCOME calculation? Most people (probably everyone in America) budget and pay bills from the NET INCOME (but not the Department of Treasury, they are immovable in their thinking).
BOTTOM LINE, homeowners having financial problems are still being placed in jeopardy through the application of archaic government rules. Struggling homeowners are being expected to use 31% + of their GROSS INCOME toward a mortgage payment when the industry has wisely reduced that obligation to 28% or less. Something is really wrong with this Treasury Rule! Our Department of Treasury (along with the Hardest Hit Program in each State) needs to be realistic when it comes to housing expenses. Let’s return to those sensible days when housing costs were less than a quarter of a person’s NET INCOME.
[NOTE .. Hope that you are not on Social Security Disability or Social Security Retirement if you also reach out for Federal HAMP assistance. If you are, besides the 31% Rule, Treasury will add 25% more to your Social Security Award Amount and then claim you have all this extra “funny money” which you can’t even; spend, invest, stuff under the mattress, etc. (they call it; “Income Grossing Up”) to budget and pay your monthly bills to include any HAMP mortgage modification payment].
Very revealing bless you, I think your trusty audience would probably want way more writing along these lines keep up the good hard work.