The city of Chicago has unveiled its new Home Buyer Assistance Program as part of its return to the mortgage business.
Crian's Chicago Business said that the government is starting small with only $1 million capital, but is confident that the program will immediately grow. Mayor Rahm Emanuel said this new Home Buyer Assistance Program will provide "an essential building block for vibrant communities."
According to the report, homebuyers in the low- and middle-income households can enjoy a grant of as much as 5 percent of the total loan amount to help them cover the costs of down payment and closing. Looking at the current typical home selling average in Chicago of $250,000, a homebuyer can receive a grant of up to $12,000.
Carole Brown, the city's chief financial officer, expects the fund to quickly grow. She added, "If it needs more seed capital, we'll put in more. But I don't think we will need to."
Brown also said that the $1 million capital for the new homebuyer air program came from the old bond program.
The program, which will be administered by Emanuel's Chicago Infrastructure Trust, will include a non-flipping clause. This means that the homebuyer should own the property for at least five years.
Greater Englewood Community Development Corp. President Ien Fulton said, "We have a foundation for small businesses that's coming back to Englewood. So now we need to build up some kind of foundation, a support system for people that want to buy a home and come back," as reported by DNAinfo.
Emanuel announced this new mortgage aid during the meeting with business leaders and members of the Chatham Business Association last Monday. Among the presents is Tiffany Hamel Johnson, the Chicago Urban League's senior vice president of strategy and community development. The city has previously launched a similar assistance program which ended in 2007.