Illinois lawmakers hope to help homeowners with additional federal funding

SPRINGFIELD (WFEM) – The housing market is not a good place right now for a low income person. You can find an affordable property, but additional costs may add up for that home.

State lawmakers want to help people struggling to become homeowners and those at risk of losing their homes. An Illinois housing committee is meeting several times this month to discuss the best options for using the money left over from the US bailout to help people have a roof over their heads.

Industry executives told members of the housing committee on Tuesday that homeownership helps people build wealth and improve their quality of life.

Housing Action Illinois has suggested lawmakers increase down payment assistance and create better access to finance for post-purchase needs such as repairs. Housing policy director Sheila Sutton also said Illinois should strengthen access to housing counseling agencies approved by the Department of Housing and Urban Development.

“The gap between black and white homeownership rates is higher today than in 1960, when housing discrimination was legal. National rates of racial disparity in homeownership reflect very well what is happening in Illinois today, ”Sutton said.

The homeownership rate for blacks in the United States is 47%, but it is only 39% in Illinois. Meanwhile, the homeownership rate for Latinos in Illinois is 53% compared to 75% for white residents. Many believe this is due to high mortgage payments, home insurance and property taxes.

“In some cases, they find that even property taxes are higher than their mortgage payments,” said Mabel Guzman of the Illinois Realtors Association. “So this is a disparity for which we really need to find a solution.”

Guzman said down payments are great for getting people into homes. However, she pointed out that the payment doesn’t do much in the long run to keep people in their homes. The Illinois Realtors Association believes that part of the federal funding should go to programs for first-time home buyers and homeowners in minority communities.

Some advocates believe the money could go straight to homeowners who can decide what use they need at any time. For example, Sarah Brinkmann of Northwest Homestart says the state could offer funding to help someone buy a home and give them an additional source of income for the upkeep of the property.

“They’re going to have a pretty ideal situation when it comes to what they’re paying monthly,” Brinkmann said. “So they can afford a small payment on their home equity in most cases, if they can do it in a reasonable way.”

Brinkmann says people could also use funds for electrical panels or water heaters. Other homes need updated HVAC systems, and Brinkman noted that many people don’t have the money right now to afford this type of work.

Likewise, the Illinois Housing Council would like lawmakers to spend $ 225 million in federal funding for the COVID-19 emergency housing assistance program over the next two years.

Others argue that Illinois could invest more in affordable rental properties for people with median incomes equal to or lower than that of a neighborhood. This is commonly referred to as Natural Affordable Housing or NOAH. Illinois Housing Council executive director Allison Clements said these properties are affordable without the government grants associated with them.

She explained that Illinois lost many rental properties when for-profit buyers took over and raised the rent. Clements said there were virtually no grants available to help buyers of affordable homes compete with large investors.

“Between 1990 and 2017, Illinois lost more than 250,000 homes rented for less than $ 800 per month,” Clements said. “That’s more than double the 108,000 affordable units we built or preserved in our state over a similar period.”

Stacie Young of the Community Investment Corporation said Boston had two great examples of financing models for NOAH properties. She explained that both programs offer grants and low-interest loans to help homeowners buy NOAH buildings and keep housing affordable for people.

Young would like to see Illinois create a program to preserve existing NOAH buildings in divested and rising markets. His idea would allow for-profit, non-subsidized owners and subsidized mission-driven developers to receive funding.

“The program should include an acquisition component which is what we see in Boston,” Young said. “But there should also be a refinancing component to help existing homeowners who already have buildings in their portfolio that need rehabilitation and they cannot afford to do that rehabilitation, especially given the maintenance. delay that we saw during COVID. ”

This committee plans to meet again in two weeks to discuss removing barriers to housing. They have previously discussed using ARPA funding to tackle homelessness on November 2.

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