There are several subordinate acquisition and rehab loans that are also available for consideration. These could be used in conjunction with a traditional mortgage, funding the renovation work that will be completed and some portion of the original acquisition. Chart
The Small Building Initiative should leverage existing down payment assistance programs. A complex web of existing, temporary and restricted programs exist that would assist the purchase of two- to four-unit buildings. These represent strategic financial sources to be accessed by the efforts in Woodlawn. I propose that the Small Building Initiative provide down-payment assistance to two- to four-unit buildings that are moderately renovated and that are formerly vacant, in the form a 5 year forgivable loan for which households up to 120% AMI are eligible. This particular down-payment assistance is intended to fill the gap for households at 80-120% AMI, prioritize projects that renovate properties, and require continued residence consistent with existing programs. The focus of lending to two- to four-unit buildings (and not homes converted to single family homes) means that this effort will create additional rental housing as well.
The most basic assistance that prospective homeowners need is pre-purchase counseling, a requirement of the more effective first-time homeownership programs and an important method of reducing the incidence of foreclosure. A network of providers associated with NSP serves as a resource for this work, including Agora Community Services, Genesis Housing Development, Greater Southwest Development Corporation, and the downtown-based Neighborhood Housing Services of Chicago.