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IHDA's downpayment assistance match extends affordability for qualifying employee homebuyers.
The Illinois Housing Development Authority (IHDA) announced on April 8 that it will provide up to $7,500 in downpayment assistance to help qualifying Chicago-area residents purchase homes near work if their employers offer an Employer-Assisted Housing (EAH) benefit.
The Metropolitan Planning Council applauds IHDA for providing this new assistance. We will work with employers in Chicago and south and west Cook County, as well as Northside Community Development Corporation (NCDC), to help promote these funds so that qualifying households can take advantage of them. To qualify for IHDA’s forgivable loan, homebuyers must earn no more than 80 percent of the Area Median Income (AMI)—for example, for a family of four in the Chicago area this means an income up to $57,900—and must receive downpayment assistance from their employer to purchase a home. IHDA will provide a triple match of the employer’s assistance, up to $7,500; for example, if an employer provides $1,000 in downpayment assistance, IHDA will provide $3,000, for a total of $4,000.
Homebuyers in this targeted income bracket are at a great disadvantage when it comes to securing a mortgage. Typically, their greatest challenge is saving enough money for a downpayment. When homebuyers cannot put up a sizable downpayment, once they do secure a mortgage they face a higher cost burden (the ratio between income and mortgage) and repay more over the life of their loan.
IHDA’s triple match means that even a modest EAH investment from an employer can significantly bolster a homebuyer’s downpayment and mitigate his or her financial disadvantage. IHDA’s assistance also sends a positive signal to employers that are helping their workforce live near work—therefore reducing their employees’ housing and transportation costs and stabilizing local communities. For instance, since 2003, University of Chicago has invested $1.71 million in EAH, yielding approximately $45 million in home purchases throughout communities surrounding its Hyde Park campus.
IHDA will provide these matching funds for one year starting in April 2014. MPC is thrilled to partner with IHDA, area employers and NCDC to bridge the housing affordability gap and strengthen communities across the region.