Chicago FHLB Provides Additional $1.8 Million of Downpayment Assistance for Ill., Wisc. Housing

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Allocation follows more than $10 million in grants bank has already provided this year
RISMEDIA, Dec. 15 ? The Chicago Federal Home Loan Bank has allocated an additional $1.8 million that mortgage lenders can use to provide down payment and closing cost assistance grants of up to $5,000 for low- and moderate-income homebuyers in Illinois and Wisconsin. The Bank has already provided more than $10 million in grants this year to approximately 2,000 families and individuals on a first-come, first-served basis through its Downpayment Plus? Program (DPP?). Up to 360 additional families in the two states will be aided by the supplemental funding announced.

“Our original allocation of DPP funding, made at the beginning of the year, was fully reserved by October,” said Eldridge Edgecombe, Senior Vice President and Community Investment Officer at the Chicago Federal Home Loan Bank. “Given the strong demand, we felt it was appropriate to provide an additional allocation of $1.8 million to ensure these funds remain available to eligible homebuyers through the end of the year.”

To be eligible for DPP grants of up to $5,000, homebuyers must have total household income of less than 80% of area median income, based on HUD guidelines. The grants funding may be used for downpayment and closing cost assistance, homebuyer counseling (up to $600) and rehabilitation costs associated with buying a home.

Homebuyers must contribute at least $750 toward the purchase of their home, use it as their primary residence, and remain in it for at least five years (or repay a pro-rata portion of the subsidy). Recipients also must complete a homebuyer counseling program, which provides a comprehensive financial literacy component, including information alerting borrowers to practices characteristic of predatory lending.

DPP funding is available to eligible homebuyers through member financial institutions of the Chicago FHLB. The grants are a component of the Chicago FHLB’s Affordable Housing Program, in which the Bank contributes 10% of its previous year’s net income toward programs designed to create affordable housing and community development activities. More than $219 million in subsidies, supporting approximately 49,000 units of affordable housing, have been awarded since the AHP program began in 1990.

In addition, the Chicago FHLB has extended more than $5.3 billion in Community Investment Cash Advance (CICA) products to its member institutions since late 1989. These funds are made available at the Bank’s cost of funds and further support housing and community economic development.

More information on the Downpayment Plus Programs can be found on the Chicago FHLB’s Web site at http://ci.fhlbc.com/ci/housing/dpp.asp.

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