Mortgage relief program launched for Illinois homeowners

From this spring, the Illinois Housing Development Authority will begin accepting applications from landlords in financial difficulty.

The IHDA-supervised Illinois Emergency Homeowners Relief Fund is a federally funded program dedicated to helping Illinois homeowners who are struggling to pay their mortgages due to the COVID-19 pandemic.

“I know we’ve been waiting for these funds for some time and the US Treasury has really delayed getting this money out,” the House Housing Committee chairman said. Delia RamirezD-Chicago said in a hearing Wednesday.

Funded by the US Bailout Act which was passed by Congress in March 2021, $387 million will be available through the Homeowners Emergency Relief Fund.

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ARPA funds provided assistance with rent and utilities, as well as $387 million for the soon-to-be-launched mortgage relief program.

How does the mortgage assistance program work?

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

Funds can also be used to prevent mortgage defaults and defaults, foreclosures, loss of utility or home energy services, and relocation of financially distressed homeowners after January 21, 2020.

Homeowners should contact their mortgage agent or a housing counseling agency for assistance, and then, depending on the outcome, may seek assistance through the IHDA.

“These are requirements that the federal government and the Treasury place on us,” said IHDA executive director Kristin Faust. “The Homeowners Relief Fund is meant to be a fund of last resort.”

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Faust said the IHDA will launch a public relations and information campaign to begin educating landlords on how to contact housing counseling agencies or their mortgage provider to begin preparing the necessary paperwork for the opening of the application process.

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

Landlords are recommended to start the process now to contact their service provider and housing counseling agencies so that when applications open, they will be eligible for financial assistance.

Illinois Housing Development Authority and COVID Rental Assistance

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

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

IHDA has also allocated $75 million to the COVID-19 Affordable Housing Grant Program funds created by the American Rescue Plan. Chrissy Moran, IHDA’s managing director of multifamily financing, said the funds are helping developers weather rising construction costs related to the pandemic.

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

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