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Illinois lawmakers hope to help homeowners with additional federal funding

The housing market is not a good place right now for someone with a low income. You may find an affordable property, but additional costs can add up for that house.
Illinois lawmakers want to help people struggling to become homeowners and those at risk of...
Illinois lawmakers want to help people struggling to become homeowners and those at risk of losing their homes.(Mike Miletich)
Published: Nov. 17, 2021 at 5:16 AM CST
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ROCKFORD, Ill. (Gray TV) - The housing market is not a good place right now for someone with a low income. You may find an affordable property, but additional costs can add up for that house.

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 to use the remaining money from the American Rescue Plan to help people have a roof over their heads.

Industry leaders told Housing committee members Tuesday that homeownership helps people develop wealth and improve their quality of life.

Housing Action Illinois suggested lawmakers boost down payment assistance and create more access to funding for post-purchase needs like 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 today are higher than they were in 1960 when housing discrimination was legal. The national homeownership racial disparity rates very much mirror what is happening in Illinois right now,” Sutton explained.

The Black homeownership rate in the United States is 47%, but the rate is only 39% in Illinois. Meanwhile, the Latino homeownership rate in Illinois is 53% compared to 75% for white residents. Many feel that this is due to high mortgage payments, homeowners insurance, and property taxes.

“In some cases, they find that even the property taxes are higher than their mortgage payments,” said Mabel Guzman with the Illinois Realtors Association. “So that’s a disparity that we really have to find a solution for.”

Guzman said down payments are great to get people in homes. However, she stressed that the payment doesn’t do much in the long term to keep people in their homes. The Illinois Realtors Association feels some federal funding should go to programs for first-time home buyers and owners in minority communities.

Some advocates think money could go directly to homeowners who can decide what they need to use the funds for at any given time. For example, Sarah Brinkmann with Northwest Homestart says the state could offer funding to help someone buy a house and give them an extra income source for maintaining the property.

“They’re gonna have a pretty ideal situation when it comes to what they’re paying out monthly,” Brinkmann said. “So they can afford a little bit of a home equity payment with that 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 houses need updated HVAC systems, and Brinkman noted many people don’t have the money right now to afford that type of work.

Similarly, the Illinois Housing Council would like to see lawmakers put $225 million of the federal funding towards the COVID-19 emergency housing assistance program over the next two years.

Others argue Illinois could invest more in affordable rental properties for people at or below the median income in a neighborhood. This is commonly known as naturally occurring affordable housing or NOAH. Illinois Housing Council Executive Director Allison Clements said those properties are affordable without government subsidies associated with them.

She explained Illinois lost many rental properties as for-profit buyers took over and increased rent. Clements said there’s hardly any subsidy available to help affordable housing preservation buyers compete against large investors.

“Between 1990 and 2017, Illinois lost more than 250,000 housing units renting for under $800 per month,” Clements said. “That’s more than twice the 108,000 affordable units we have built or preserved across our state over a similar period.”

Stacie Young with the Community Investment Corporation said Boston has two great examples of funding models for NOAH properties. She explained both programs provide grants and low-interest loans to help owners buy NOAH buildings and keep units affordable for people.

Young would like to see Illinois create a program to preserve existing NOAH buildings in disinvested and rising markets. Her idea would allow unsubsidized for-profit 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 owners who already have buildings in their portfolios that need rehab and they can’t afford to do that rehab, especially given the deferred maintenance that we’ve seen during COVID.”

This committee plans to meet again in two weeks to talk about eliminating barriers to housing. They previously discussed using ARPA funding to combat homelessness on November 2.

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