Housing Update
October 27, 2008
Catholic Social Teaching challenges us to work for the common good and to take special care to address the needs of the poor and vulnerable in our society. The past few months have been ones with dramatic economic changes with the housing crisis at the forefront. It has affected individuals from all incomes including the poor. Below is a summary of some of the major issues as well as an update of state budget and legislative issues. The information is excerpted from the October Housing Roundtable Update and other updates by Bob Palmer from Housing Action Illinois. The complete roundtable update is available at www.housingactionil.org
Federal Update
Housing and Economic Recovery Act of 2008
Neighborhood Stabilization Program
The Housing and Economic Recovery Act of 2008 allocated $3.9 billion in emergency Community Development Block Grant (CDBG) neighborhood stabilization funding. Illinois was awarded a total of $172.5 million. The City of Chicago and 12 other local governments received allocations, as did the State of Illinois. State funds can be used in parts of the Illinois not otherwise funded and to supplement funds allocated to local governments. Each recipient government must submit a plan to use the funds to HUD by December 1 and will have 18 months to obligate these funds. Draft plans must be made available on the Internet and there is a mandatory two-week public comment period prior to submission of the plans. Housing Action Illinois will post links to draft plans as they become available at http://www.housingactionil.org.
Neighborhood Stabilization Grants include the following eligible uses:
• Establish financing mechanisms for purchase and redevelopment of foreclosed homes (including soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers).
• Purchase and rehabilitate properties that have been abandoned or foreclosed. Rehabilitation may include improvements to increase energy efficiency or provide a renewable energy source for such homes and properties.
• Establish land banks for homes that have been foreclosed.
• Demolish blighted structures.
• Redevelop demolished or vacant properties.
HOPE for Homeowners and the National Housing Trust Fund
Two additional provisions of the Housing and Economic Recovery Act are the HOPE for Homeowners Program and the National Housing Trust Fund. Through HOPE for Homeowners, which went into effect on October 1, borrowers having difficulty paying their mortgages are eligible to refinance into Federal Housing Administration (FHA)-insured mortgages they can afford. Available only to owner-occupants, borrowers must demonstrate their long-term ability to repay the mortgage and meet several other requirements. More information is available at http://www.fha.gov.
The National Housing Trust Fund was created with a dedicated revenue source from Freddie Mac and Fannie May. The National Low Income Housing Coalition has a released an FAQ on the National Housing Trust Fund. The FAQ is partly in response to concerns that the Trust Fund will not have any revenue in the aftermath of the government takeover of Fannie Mae and Freddie Mac. The FAQ point out that funding is based on a percentage of Fannie’s and Freddie’s new business, not their profits. The FAQ and other updates are available at http://www.nlihc.org.
Emergency Economic Stabilization Act
Most of the media coverage of the Emergency Economic Stabilization Act signed into law on October 3, otherwise known as the “$700 Billion Bailout” bill, has focused on the federal government’s purchase of “troubled assets” and ownership shares in banks to restore confidence in the stock and credit markets. There have been few statements from Treasury Secretary Henry Paulson about how homeowners in danger of foreclosure, and renters displaced due to foreclosure, will be directly assisted by the legislation. The law does require the Treasury Secretary to implement plans to reduce foreclosures for mortgages and mortgage backed securities acquired by the federal government and to permit tenants who are current on their rent to remain in their homes under the terms of the lease. Hopefully, details on these initiatives will be available soon. More information is available at http://www.ustreas.gov.
State Updates
Supportive Housing Funds – The General Assembly voted to restore about $200
million of the $1.4 billion in cuts made by Governor Rod Blagojevich to balance the fiscal year 2009 budget that was passed by the General Assembly in May. Funds restored included $4 million in new funding for supportive housing services and much larger sums for substance abuse treatment, mental health treatment and the operation of state parks. The Supportive Housing Providers Association is urging people to contact Governor Blagojevich asking him to sign SB 1103, the appropriations bill which restores the funding.
The Illinois Affordable Housing Trust Fund, funded by one-half of the proceeds of the state real estate transfer tax, is suffering from declining revenues caused by the soft housing market. During the first three months of the current 2009 fiscal year, July through September, Trust Fund Revenue was $16.4 million—11% less than in fiscal year 2008 and 28% less than in fiscal year 2007.The State is prioritizing available Trust Fund resources for existing affordable housing development projects, the Homelessness Prevention Program and a community reintegration program that allows people with disabilities to move from institutions into housing that allows them a higher level of independence. Resources for the Illinois Affordable Housing Trust Fund will continue to be a concern in the next fiscal year, as well.
Safe Homes Act Amendment was signed into law by Governor Blagojevich on October 6. The amendment restricts landlords from disclosing the identities of tenants who make use of the Safe Homes Act to protect themselves from domestic violence or sexual assault.
HOUSING ACTION ILLINOIS 2008 ANNUAL MEETING
Learn What the Government is Doing to Address the Housing Crisis and How you Can Participate in the Solution
DATE: November 13, 2008, TIME: 9:30 a.m. to 3:00 p.m.
LOCATION: Abraham Lincoln Hotel and Conference Center, 701 East Adams Street
Springfield, Illinois 62701, Phone: 1-217-544-8800
COST: Free for members and $25 for non-members
TO REGISTER : Contact Nieta Linzy at 312-939-6074 x 204 ornieta@housingactionil.org to let us know if you will be attending or have any questions about room availability should you choose to spend the night. Please register by October 31st and indicate if you require a vegetarian meal.
SCHEDULE:
9:30 A.M. Registration and Continental Breakfast
10:00 A.M. Welcome and Plenary Session: Federal Response to the Housing Crisis
During the plenary, we'll provide an overview of the Housing and Economic Recovery Act and an up-to-date report on other federal responses to the housing crisis, including whatever legislation may pass regarding Wall Street. An expert panel will evaluate the local impact of the federal responses, especially in light of the November election results. All those in attendance will be encouraged to participate in the discussion. Among its many provisions, the Housing and Economic Recovery Act provides resources to allow cities and states to buy and rehabilitate foreclosed properties, establishes the HOPE for Homeowners program to help delinquent or at-risk borrowers refinance into affordable mortgages, and creates the Housing Trust Fund to boost the nation's stock of affordable housing.
11:45 A.M. Break
12:00 P.M. Lunch (Housing Action Illinois Year in Review, Board of Directors Election
2009 Policy Agenda Review)
1:15 P.M. Break
1:30 P.M. Workshops and Lobby Day at the State Capitol
Housing Developer Workshop
The housing developer workshop will consist of an analysis of the Housing and Economic Recovery Act's influence on affordable housing development, an explanation of Neighborhood Stabilization Funds, and a dialogue on recent and future trends for affordable housing developers.
Housing Counselor Workshop
The housing counselor workshop will consist of a review of the Housing and Economic Recovery Act's effects on homeownership and housing counseling agencies, as well as a roundtable discussion amongst housing counseling professionals regarding the implications of the Housing and Economic Recovery Act's provisions.
Lobbying Orientation/Lobby Day
The House of Representatives recently cancelled their session for November 13th, although the Senate still plans to meet. Therefore, we will start the afternoon session with a training on the basics of the state legislative process, strategies for successfully educating and lobbying your state legislators, and we'll also have the opportunity to discuss the details of our specific advocacy initiatives. Assuming that the Senate is still in session, we'll then proceed over to the State Capitol to talk to members of the Illinois Senate.
