City Housing Market Projects and Programs for 2020

The hardest part about buying your first home is all the work that comes before the actual buying process. Unless you have family support and an inheritance of course, lucky you! Saving money and making sure your credit score is up to par can delay many people from buying their first home. The City of Chicago knows that and has created affordable housing and development programs in an effort to help make home ownership attainable for those that don’t have as much income.

We covered some city programs in a previous article, Home Buyer Loan Programs and Grants Your Lender Forgot to Mention. We’ve rounded up some other programs that may be of interest to both developers that want to build affordable homes in the city, as well as for new home buyers that may need some hold to reach their home ownership goals. 

We put together a list of these programs as well as projects that exist for current homeowners. 

 

City Lots for Working Families

  • Program provides vacant, city-owned lots to developers of affordable single-family homes and two flats for $1 each.
  • Through the program, eight to 20 City-owned lots with a maximum appraised value of $125,000 can be conveyed per developer for each project. 
  • Homes must be made available to qualified buyers with incomes up to 140 percent of area median income. 
  • Buyers must use the homes as their primary residences for a minimum five-year occupancy period.
  • For full details on the program, go to the website

 

Building Neighborhoods and Affordable Homes Program

  • The program provides up to $60,000 in purchase assistance to buyers of single-family homes constructed under the City Lots for Working Families program within the boundaries, see website for details. 
  • Homes must have been built through the City Lots for Working Families program and located within one of the target areas.
  • Household income cannot exceed 140% of the area median income (AMI).
  • Buyers must use the homes as their primary residences for a minimum 10-year occupancy period, or the home must be sold to an income-qualified homebuyer. 
  • Maximum income limits range from $83K to $127K, for households sizes from 1-5 people, see website for details. 

 

TaxSmart

  • TaxSmart is a Mortgage Credit Certificate (MCC) program administered by the Department of Housing that provides a federal income tax credit to qualified homebuyers.
  • The MCC allows the homebuyer to claim a tax credit for a portion of the mortgage interest paid per year. The current rate of annual savings is 25 percent for a home purchase or 50 percent for home improvement or rehab loans.

 

Neighborhood Lending Program Home Purchase and Purchase/Rehab

  • Through the Neighborhood Lending Program, the City of Chicago and Neighborhood Housing Services (NHS), provide first and second mortgage loans for the purchase or purchase+rehab of 1- to 4-unit buildings for homeowners who might otherwise not be able to purchase a home. 
  • Special subsidies are also available to income-eligible households to support these loans. Clients receive one-on-one counseling and classroom instruction in budgeting, financial planning and credit repair.
  • See website for more info

 

Multi-Family TIF Purchase-Rehab Program

  • The Multi-Family TIF Purchase-Rehab Program helps private developers purchase and rehabilitate vacant and foreclosed rental buildings within designated Tax Increment Financing (TIF) districts.
  • The program provides TIF assistance ranging from 30 to 50% of the total cost needed to acquire and rehabilitate apartment buildings containing six or more units in portions of the Humboldt Park, West Town, and North and South Lawndale communities. 
  • The amount of TIF assistance is determined by the percentage of apartments that are made available to households earning no more than 50% of area median income over a period of 15 years.
  • See website for more info

 

Community Connections Home Buyer Assistance Program

  • The Community Connections Home Buyer Assistance Program is a pilot program that provides funds to eligible Career Service employees and three groups of first responders: Chicago police officers, firefighters, and paramedics. The funds will allow select City workers to purchase homes in targeted Chicago neighborhoods to enhance revitalization efforts.
  • Loans of $30,000 are available, appropriated from the Affordable Housing Opportunity Fund.
  • See website for more info

 

Chicago Community Land Trust for Buyers

  • The CCLT works in combination with the City’s affordable homeownership programs. The City provides land and / or subsidies to make affordable homes available for purchase by income-qualified working individuals and families.  See the Homes for Sale list of available units, including links to City program requirements.
  • Through the County County Assessor’s Office, property taxes are assessed on the home’s affordable price, instead of on the market value.
  • In exchange for the subsidies and reduced property taxes:
    • Buyers sign a long-term affordability agreement agreeing to resell the home to another income-qualified buyer at an affordable price.
    • The affordable resale price is designed to give the owner a return on his/her investment, but limits that return in order to keep the home affordable to the next family.    
    • The original subsidies stay with the home to help maintain affordability.

 

Final Thoughts

These programs can seem a bit confusing, but our experienced real estate pros can help you navigate the process and point you in the right direction. Just keep in mind that you still have to be able to qualify, so if repairing your credit is something you need to do first, we recommend you get to working on that step first! If you’re not sure where you stand or need help finding resources for credit repair, give us a call and we can help get you started.