Rockford Area Affordable Housing Coalition Blog

Updated Calendar of Classes

2006-09-25T12:09:00.000-05:00

The Coalition's new calendar of homebuyer education classes is now available online. This calendar includes October 2006 through December 2007 and is in PDF format.

Re-Setting Mortgages

2006-08-24T16:43:00.000-05:00

An adjustable rate mortgage resets when the initial interest rate is adjusted after a period of time. Many adjustable rate mortgages (ARMs) reset after two or three years, usually causing the interest rate (and the monthly payment) to increase. In 2005, $100 billion of loans reset. In 2006, $375 billion are expected to reset. 2007? It is expected that $1 trillion of mortgage loans will reset in 2007. Add to that the claim that $150 billion of the $670 billion first quarter mortgages were interest only ARMs, and the future doesn't look too good. What does this mean? A lot of people will be surprised when their mortgage payments suddenly rise! Many will be caught off-guard and unable to afford their new payments. I was speaking with someone the other day whose payment went up $200/month. It makes a budget a much more precarious thing when one line item shoots up that much. If your ARM is going to reset, start to prepare now. Make sure your credit is such that you can refinance into a fixed rate loan. If your credit isn't there, start working on it! If its too late to do that, now is still not too soon to start working on your credit so that you can escape the situation you are in as soon as possible. ARMs and interest only mortgages can certainly fill a need, but they are really best geared toward people who have money to risk. If your money is tight, don't plan on an ARM or an interest only mortgage to get you through when times get even a little bit rocky. They are higher risk mortgages.

Employer Assisted Housing in DeKalb

2006-07-27T12:33:00.000-05:00

Brian Grainger Construction of DeKalb recently held an informational meeting for DeKalb area businesses that discussed an exciting opportunity to provide housing assistance to employees. Grainger is working with the REACH-IL program to offset the costs of providing downpayment assistance. This allows employees to receive up to $10,000 in downpayment assistance ($5,000 from the employer, $5,000 from the State) while the employer receives up to $2,500 in state tax credits and the possibility of donation write-offs on federal taxes. Grainger is also working with the USDA to provide Rural Services loans to his employees. These loans can go as low as 1%, depending on family size, income, and expenses.

Grainger's proposal to local businesses includes assisting employers as they put these programs together to provide affordable housing to their employees. In addition, however, Grainger is going one step further by providing a $2,000 bonus to companies whose employees purchase a Brian Grainger-built townhouse. When all is said and done, this bonus from Grainger covers the rest of the out of pocket expenses that an employer would have to spend on the program. This results in an employee benefit program that has no cost to the employer.

In Grainger's proposal he was able to show that qualifying families could purchase a $162,000 townhouse with a monthly payment (for the first year) of just over $600 per month, including taxes and insurance. It was obvious from the presentation that Brian Grainger Construction is doing some great "out-of-the-box" thinking to assist his employees, as well as workers throughout the DeKalb-Sycamore area.

Homebuyer Education 2006

2006-07-03T10:51:00.000-05:00

The Coalition office has been a very active place lately. Our homebuyer education classes are occurring much more regularly, allowing greater flexibility to those who are taking the classes. The homebuyer education classes now happen every Tuesday and Thursday evening from 6 to 8 p.m.

With the new flexibility is a new curriculum. We are now using the Realizing the American Dream materials that are produced by NeighborWorks. This has caused us to increase our classes from four to five. The additional class gives us the opportunity to cover more material and focus more intensely on many of the areas of homeownership. We are very excited about the changes that have been occurring in this area of our work!!

As if changes to the times and curriculum were not enough, we are now offering the classes in Spanish on a regular basis. The first two Saturdays of each month are dedicated to providing this service. We are rotating the class locations between the Coalition office and the Alerta office in Belvidere.

Finally, our staff is now 100% certified for the classes. All of our staff have completed the required training for teaching the classes. Anna received the training in early April, taking the training class and the exam in Spanish. This will help ease the class demands for all of us by spreading out the teaching responsibilities.

Employer Assisted Housing

2006-06-30T09:41:00.000-05:00

The Coalition is actively working with several employers to implement the REACH-Illinois Program. This program provides incentives for employers who provide downpayment assistance to their employees. The incentives come in a couple of forms. First, the State of Illinois will match the downpayment assistance that an employer provides, up to $5,000. This is based on the household income of the employee. For example, if an employer provides $5,000 in downpayment assistance to an employee whose household income is less than 50% of the area median income, then the State will match that assistance with another $5,000, giving the employee $10,000 in downpayment funds.

The State will also offer tax credits to the employer for providing that assistance. These tax credits are worth 50% of the assistance provided by the employer. In the example above, the employer would receive $2,500 in state income tax credits. If the employer is a not-for-profit, they can sell these tax credits to offset the cost of their employer assisted housing program.

This is an outstanding benefit that companies can provide to their employees. The geographic area can be selected by the employer, encouraging employees to live near work. This lowers absenteeism and increases employee retention. If you are interested in learning more, please contact the Coalition office!

New Website

2006-05-19T12:45:00.000-05:00

The Coalition has finally launched our new website. You can access it by going to raahc.org. It has a downloadable .pdf calendar of our homebuyer education classes as well as other information about the Coalition.

Affordable Housing Program

2006-02-14T17:47:00.000-06:00

We learned yesterday that the Federal Home Loan Bank of Chicago's Affordable Housing Program will have about $30 million available for 2006. This is down 25% from last year. The impact will be felt in the Downpayment Plus program and in the Competitive AHP for project developers. Currently several members of the Coalition are utilizing the Downpayment Plus program. Our guess, and this is not based on any facts or knowledge, is that reservations may run out in September or October. Due to the recent growth of the program, that may even occur earlier. Of course, every year is different, so we will see how the program progresses as the year moves forward.

This may also have an impact on the awards available to developers. The maximum award will remain at $600,000 per project, but the overall amount available will be down from last year. Also keep in mind that last year saw an increase in projects receiving funds even though there were fewer funds available. This may have been due to a lowering of the project maximum or simply lower requests from developers.

THANK YOU!!

2006-02-08T10:22:00.000-06:00

Last night we were able to take some time to celebrate the successes of the Rockford Area Affordable Housing Coalition. Our Annual Banquet took place at Giovanni's of Rockford. Our own staffer, Anna Contreras, spoke about her experiences as a homeowner, and the benefits that she experienced as a result of participating in the Homebuyer Education class that we offer. Recent class graduate Kordrey Jones also spoke about the pride he feels as a new homeowner and encouraged all those present to "continue to help people like me to own a home." A word from Mayor Larry Morrissey reminded us that there should be no "bad side of town." We should expect excellence everywhere. John Hotchkiss of Fannie Mae (not the candy company!) explained some of the changes to several of Fannie Mae's mortgage products. These products are available for people with low-moderate incomes. People with higher incomes can also take advantage of these products if they purchase a home in a qualified census tract.

This was the first time we had hosted a dinner (as opposed to the luncheons we have had in the past), and all of the feedback we have received has been positive. Thank you to the greater Rockford area for your continued support!!

Call to Action

2005-12-14T10:52:00.000-06:00

The National Low Income Housing Coalition has issued a call to action of the budget debates that are taking place. Their email states:

CALL TO ACTION

December 12, 2005

A .pdf version of this call to action is available at www.nlihc.org/news/121205cta.pdf.

Send a letter to the editor of your local paper on this topic at http://capwiz.com/nlihc/issues/alert/?alertid=8310571.

Whom to call: Your Representative and both of your Senators
When to call: Monday, Dec. 12, through Friday, Dec. 16
The number to call: (888)-818-6641
The message: Vote NO on across-the-board cuts to housing programs, and
NO on the budget reconciliation bill.

Before Members of Congress go home for the holidays, they will make two
more major attempts to cut programs that help low income people. We know
you've made many calls this year, but please make one more call in 2005
to tell Congress that cutting programs that aid low income families
while cutting taxes for the rich is morally bankrupt!

1. CUTS TO DISCRETIONARY PROGRAMS-INCLUDING HOUSING

When the House and Senate finalized the FY2006 spending bill for HUD,
the news was not good for low income people. Now, Congress wants to go
back and further cut funding for each of HUD's programs-by an additional
1% to 2%.

If this across-the-board cut is passed, CDBG would be reduced by an
additional $75 million, Housing Choice Vouchers would see an additional
35,000 vouchers eliminated, and HOME would receive an additional $35
million cut. Congressional leaders want to include the cut in the
Defense Appropriations bill that Congress is scheduled to vote on this
week or next.

The Message:

Members of Congress should vote NO on the across-the-board cuts to
housing programs.

More Information:

* The letter that a coalition of organizations, including NLIHC, sent to Congress is available at www.nlihc.org/news/120705chcdfletter.pdf.

* Charts showing the state-by-state impacts of a 1% or 2% cut on the voucher program and the CDBG program are available at www.nlihc.org/news/120705chcdftable.pdf and www.nlihc.org/news/120705chcdfcdbg.pdf, respectively.

2. CUTS TO MANDATORY PROGRAMS

The House and Senate have each passed bills, called budget
reconciliation bills, that would cut spending on mandatory programs,
including low income housing preservation, food stamps, and Medicaid.
The House and Senate versions of the budget reconciliation bills are
very different - the Senate cut about $35 billion; the House cut $50
billion.

The bill can only be finalized if the House and Senate can resolve their
differences in a conference committee. If they are able to do that, the
bill will then brought back to each body for a final vote.

The Message:

Members of Congress should vote NO on the budget reconciliation bill.

More Information:

* Details on the budget reconciliation bills are at www.chn.org .

* More than 80 events are being held this week as part of National Week of Prayer and Action for Compassionate Priorities. Find an event near you at www.chn.org/pdf/listofevents.pdf

Questions? Call Kim Schaffer at 202-662-1530 x232. Please report the
results of your calls to kim@nlihc.org.

Anti-Voter Amendment Tied to Affordable Housing

2005-12-08T08:52:00.000-06:00

Yesterday I received an email with various news items. This one stood out to me:

The House of Representatives has voted in favor of establishing a long-overdue Affordable Housing Fund. Those affected by Hurricane Katrina are to receive priority.

But many community-based nonprofits will not be able to receive the funds if the Senate follows the House’s lead.

That’s because hidden away in HR 1461 is an antivoter gag rule. Proposed by Representative Michael Oxley (R?OH), the so-called Manager’s Amendment states that no organization can receive money from the Affordable Housing Fund if it engages in voter registration, voter identification, or get-out-the-vote activity, even of a nonpartisan nature; if it has engaged in such activity in the 12 months before applying for funding; or if it affiliates with any organization that engages in such activity. Affiliation is defined very broadly; the amendment explicitly names overlapping board memberships and sharing of supplies as indicators of an affiliate relationship.

HR 1461 was passed by the House on October 26 and will now be taken up by the Senate, whose version of the bill, S 190, does not yet contains a gag rule provision.

It is highly ironic that organizations that work to help at risk neighborhoods are being punished if they encourage people to vote by helping them register. I know of a local non-profit that had a resident-organized voting drive. Local politicos would come in and call bingo and there was a voter registration table out in the hallway. The politicos included most major office holders, regardless of political party or leaning. This type of activity would put an organization at risk of losing funding. That's an embarrassment.

FHA Mortgage Insurance Refund

2005-10-18T10:50:00.000-05:00

We've received a few calls lately asking about a refund on mortgage insurance from the FHA. Apparently there are plenty of people out there willing to find out if you are owed a refund...for a fee. There is an easier way, however. Look it up yourself. That's right, all you've got to do is visit HUD's website and look it up yourself.

Homebuyer Education

2005-09-08T13:51:00.000-05:00

A couple of weeks ago I spent time in Washington DC going through the Training the Trainer course from NeighborWorks. This is an outstanding course designed to prepare homebuyer education instructors. Over the next few months we will be making some changes to our homebuyer class, specifically we will be switching to the NeighborWorks' nationally recognized curriculum, Realizing the American Dream. We are very excited about this change and we are looking forward to implementing it with the start of the new year. In the meantime, there will be some other less significant changes that will be occuring in our homebuyer education alternatives. These are designed to keep us up to date with the latest techniques in homebuyer education.

What is Affordable Housing?

2005-08-05T09:51:00.000-05:00

Did you know that a person can make a million dollars a year and not have affordable housing? Affordable housing, contrary to what people tend to think, is simply housing that is affordable. It's really that simple.

Often times a bank will look at two numbers when they are trying to determine how much home you can afford. They will make sure that you are not spending more than 29% of your income on your mortgage payment. They will also make sure that you do not have debts totalling more than 41% of your income. These numbers are not set in stone, but they are general guidelines. A person with more than 41% of their income in debt can still qualify for a loan if their credit history and credit scores are very good. It is up to the lender to decide what those exact percentages should be based on your situation.

At the same time, however, you need to be careful that you don't accumulate too much debt. Taking on a mortgage that will put you over the 50% debt figure will be a bad thing, regardless of how much money you make. Any lender that wants to put you in that position is a lender that you should run away from, fast and furious. They do not have your best interests in mind, only their profit. Those lenders will also, generally speaking, charge you at a higher interest rate than a typical mortgage. This leaves you in the position of having too much debt and paying too much for it. Neither of those situations is good for you in the long run.

You can learn more about the homebuying process by taking our Homebuyer Education Classes. Call our office for more information!

Spanish Homebuyer Education Class

2005-08-04T09:18:00.000-05:00

The Rockford Area Affordable Housing Coalition will be offering our half-day MGIC homebuyer education class in Spanish on Saturday, August 13th. Please call our office at 815/962-2011 for more information.

The Importance of Good Credit

2005-08-02T18:45:00.000-05:00

I took a few minutes to pull my personal credit report yesterday. There are three national credit reporting agencies, and federal law allows people to pull one credit report from each company every year without charge. It is wise to request your credit report from each agency every year, but do each request four months apart. This gives you the opportunity to get a free credit report every four months. If something shows up that is out of place, get it dealt with through the credit reporting agency. There are federal regulations that impact how quickly they must respond.

What happens if your credit is already horrible? Let's face it, the past is the past. No one has figured out how to go back in time to change things, but the past is not the future. The best way to take care of credit issues is to pay off your debts. You may have to do this slowly, but make sure you are doing it. Many experts recommend that you pay off one credit card at a time, while paying the minimum balance on the rest. Some say to pay off the highest balance card first to save on interest. Others say to pay off the lowest balance first for the psychological value of seeing a debt disappear. Either way, start paying them off. Next, make sure you don't accumulate any additional debt. Paying off one debt just to gain another doesn't help you at all. Over time, lenders will see that you are doing the hard work of dealing with your credit issues. Your credit scores will also start to rise.

Remember, credit issues are not easy to deal with. It requires work. Stick with it. If you need help, get it. There are a number of places where you can get help. The Rockford Area Affordable Housing Coalition is one of those places. If you need more help than we can provide, we will be happy to refer you to agencies that handle more significant credit issues. We will not sell you a product, and our counseling sessions are free. Give us a call!

A Big Thank You!

2005-07-27T12:26:00.000-05:00

We would like to express our thanks to the Community Foundation of Northern Illinois for their recent grant commitment. The Community Foundation has commited $1,343 to cover the cost of transportation, room and board for Bob Campbell's training in August. Bob is our new executive director, and will be traveling to Washington DC to attend the NeighborWorks Institute workshop on homebuyer education. This training will enable the Coalition to serve more clients through our homebuyer education classes as well as our one-on-one counseling. The Coalition has already received a grant from NeighborWorks to cover the tuition for the training. The Coalition qualified for that grant because of its status as a HUD-approved Housing Counseling Agency. The Community Foundation grant will cover the rest of the costs associated with the training. Thanks again to the Community Foundation of Northern Illinois!

Facing Foreclosure?

2005-07-19T16:30:00.000-05:00

The US Department of Housing and Urban Development has an outstanding resource for families who are facing the loss of their home to foreclosure. Check out this resource for assistance. One of the steps that HUD recommends is to contact a HUD-certified housing counseling agency. The Rockford Area Affordable Housing Coalition is a HUD-certified housing counseling agency. If you are facing foreclosure, we may be able to help you. Feel free to call our office or send us an email.

EAH Makes the Paper

2005-07-18T16:50:00.000-05:00

The Rockford Register Star posted their article on employer assisted housing today. The program sounds OK in the article. Fortunately, the program is MUCH better than the article implies. First, Housing Action Illinois is not providing the tax breaks or tax credits. The State Donation Tax Credit program is administered by the Illinois Housing development Authority. The tax deduction applies to the federal taxes that a company must pay, and it is due to the donation that the employer makes to their employee through the Rockford Area Affordable Housing Coalition.

Second, it is implied that an employer must give $10,000 in assistance to employees. That is not true. There must be a $10,000 minimum investment overall in a program, but a group of employers can create a pool in order to reach that minimum investment. For example, a group of five employers can create a group and each will invest $2,000. That group will have the $10,000 minimum requirement met by their pool.

Finally, the article discusses this as an opportunity to revitalize downtown. That is true, but it is much more than that. This is not a development program, it is a program that allows employers an extra benefit to their employees. Those companies can be of any size and any location in Illinois. This is a benefit that helps employees get into their own housing and it is a benefit that helps employers recruit and retain employees.

If you are interested in learning more, please call our office at 815/962-2011 or drop us an email. We'd be happy to send you some information and meet with you to discuss this opportunity in more detail.

REACH Illinois

2005-07-15T15:38:00.000-05:00

REACH Illinois is a State supported employer-assisted housing program. In the Chicago area the effort is being led by the Metropolitan Planning Council. Housing Action Illinois is spearheading the efforts throughout the rest of the state. If you are an employer, here's the scoop:

Say you want to help 20 of your employees with down payment assistance of $3,000.
Down Payment Assistance: $60,000
Program Administration: $40,000 (includes homebuyer counseling and education, evaluation, etc.)
Gross employer investment: $100,000

Tax Benefits (for the company with employees' household income up to 120% of area median income ($72,600 for a family of four in 2005):
State of Illinois Tax Credit: $50,000
Federal Tax Deduction: $19,000
Total Tax Benefits: $69,000

Employer Net Cost: $31,000

(Source: REACH Illinois brochure published by Metropolitan Planning Council, Housing Action Illinois, and IHDA)

Now, add in the State's willingness to assist families at 80% or lower of the area median income (in Rockford, that figure is $48,400 for a family of four in 2005), and your employees who meet that criterion may end up with $6,000 in benefit. That comes to $120,000 in benefits for the price of $31,000!! Not only that, but you can build in a recapture agreement that encourages your employees to stay with your business. If they leave your company within that recapture period, they must repay your investment. This will encourage employees to stay with your company, saving you money in recruitment and training costs.

So, what's the downside?!? For an employer it is the upfront investment. If an employer does not pay state taxes, they can sell their tax credits to a company that does have such a burden. The value of the tax credits will vary with the market, right now they are about $.80/dollar of value.

Is anyone doing this? Absolutely. Visit the Metropolitan Planning Council or Housing Action Illinois for more information on companies who are taking part in this initiative. If you would like more information, call the Rockford Area Affordable Housing Coalition and ask for Bob. We'd be more than willing to set up an appointment to discuss this awesome opportunity with you!

Welcome!

2005-07-13T16:11:00.000-05:00

Welcome to the Rockford Area Affordable Housing Coalition blog. We will be looking at issues that impact affordable housing in Rockford, Illinois.

Our primary work at the Coalition is to provide home buyer education and counseling. We are the area's only HUD certified housing counseling agency. We assist residents of the Rockford area with pre-purchase counseling and education class so that they are able to make wise decisions in the purchase of their homes. We also provide post-purchase counseling for families who are at risk of losing their homes to foreclosure.

We are currently a staff of three, but that is a significant increase over our staff size even a few months ago. We keep very busy with the many opportunities that we have to help people purchase or keep their own home. Thank you for joining us as we promote the importance and need for affordable housing in our community.