Illinois will launch federally-funded mortgage assistance program this spring

[January 27, 2022]  By GRACE KINNICUTT
Capitol News Illinois
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SPRINGFIELD – Beginning this spring, the Illinois Housing Development Authority will start accepting applications for homeowners experiencing financial hardship.

The Illinois Emergency Homeowner Assistance Fund overseen by IHDA is a federally-funded program that is dedicated to assist Illinois homeowners that have struggled to pay their mortgage due to the COVID-19 pandemic.

“I know we’ve been waiting for these funds for a while and it’s really been a holdup from the U.S. Treasury (of) being able to get this money out the door,” House Housing Committee Chair Delia Ramirez, D-Chicago, said during a hearing Wednesday.

Funded through the American Rescue Plan Act that passed Congress in March 2021, $387 million will be available through the emergency assistance fund for homeowners.

The ARPA funds provided assistance for rent and utilities, as well as $387 million for the soon-to-launch mortgage assistance program.

Homeowners will be able to apply for a grant of up to $30,000 that will eliminate or reduce arrearages associated with homeownership.

Funds can also be used to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services and displacement of homeowners experiencing financial hardship after Jan. 21, 2020.

Homeowners must contact their mortgage servicer or a housing counseling agency to ask for help and then, depending on the outcome, can apply for assistance through IHDA.

“These are requirements that the federal government and Treasury are imparting to us,” IHDA Executive Director Kristin Faust said. “The homeowner assistance fund is meant to be a fund of last resort.”

Rep. Delia Ramirez, House Housing Committee chair, speaks during an event last year in Springfield. On Wednesday, she discussed during a virtual hearing how the Illinois Emergency Homeowner Assistance Fund will provide relief to those experiencing financial hardships due to COVID-19. (Capitol News Illinois file photo by Jerry Nowicki)

Faust said IHDA will begin a public relations and information campaign to start educating homeowners about how to reach out to housing counseling agencies or their mortgage provider to start preparing the necessary paperwork for when the application process opens.

“Our goal will be to get all the dollars out the door,” Faust said.

Homeowners are recommended to begin the process now to reach out to their service provider and housing counseling agencies so when the applications do open, they’ll be eligible for financial assistance.

Since the pandemic began, IHDA has distributed hundreds of millions of dollars in federal funding for rental assistance programs. For the May to July 2021 application period, IHDA distributed more than $593 million to fund nearly 65,000 applications, according to its website.

Faust said the agency expects to distribute about $200 million this year based on the ongoing impact caused by the pandemic, plus an additional $50 million for people who are behind on property taxes.

IHDA also allocated $75 million in COVID-19 Affordable Housing Grant Program funds created by the American Rescue Plan. Chrissy Moran, IHDA managing director of multifamily financing, said the funds help developers overcome increased construction costs related to the pandemic.

Currently, IHDA has 5,325 units under construction across 22 counties. The grant will help fund an additional 1,800 affordable units for senior citizens, veterans and families.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.