Hundreds of would-be homeowners stepped forward in the final two months of last year to claim $15,000 down payment assistance grants from Wells Fargo & Co.'s CityLift program.
With no waiting list being kept and the funds all reserved, the program seemed all sewn up.
A little more than two months later, some 200 of the potential 546 grant recipients have failed to meet all the qualifications to get the cash. That means there is still money available for eligible homebuyers, who don't have to take out a mortgage with Wells Fargo to get the funds.
CityLift is one of several programs open to well-qualified low- and moderate-income consumers who are keen to buy a home this year and are willing to put in the effort required to secure the funds.
The $8.2 million CityLift initiative is one aspect of a national fair-housing settlement announced last summer between the bank, the Illinois attorney general's office and the Justice Department to resolve fair-lending claims. Under the program, the grants are forgivable after five years and are awarded to qualifying homebuyers whose income is equal to or less than 120 percent of the area's median income, or $88,300 for a family of four.
In addition to the income restrictions, grant recipients must have eight hours of homebuyer education, be pre-approved for a mortgage from a participating lender and have a signed purchase contract for a home within Chicago or 28 participating suburbs that have been hard hit by the housing crisis. The suburban communities are west and south of the city.
"It's jump-starting the neighborhoods we wanted to jump-start," said Ed Jacob, executive director of Neighborhood Housing Services of Chicago LLC, the nonprofit organization that is administering CityLift.
One of those neighborhoods is on the city's Southwest Side, where Felipe Saldivar and his wife, Maria Aguilar, used a $15,000 grant earlier this month to change their status from renters to homeowners.
Last summer, long before the CityLift program was announced, Saldivar took homebuyer education classes through Neighborhood Housing Services, reasoning that he wanted to know as much as possible about the complicated process of buying a home before committing.
After the couple's offers on three properties were topped, they found a rehabbed foreclosure — a three-bedroom, two-bath brick home — in November and quickly made an offer that was accepted.
Saldivar, an engineer, got a 30-year fixed-rate loan with a 3.08 percent interest rate, a 3 percent down payment and no primary mortgage insurance through Neighborhood Housing Services' lending affiliate. Counselors there also told him about the CityLift program, and he qualified for that grant too.
The couple and their two children moved into their new home earlier this month.
"Without that help, I probably wouldn't have been able to buy the home," Saldivar said. "I thought it was too good to be true. I couldn't believe it until I got to the closing, when I saw the money. It is a lot of work, but it's a big investment. You have to work for something big like buying a home, and you have to do your homework."
Part of that homework is being persistent, checking in with the various programs available to potential homebuyers and making sure to meet the eligibility requirements. CityLift funds are expected to be available into the spring, but because no waiting list is kept, consumers need to keep tabs on when funds are released and available. There's more information at nhschicago.org.
Meanwhile, other programs are gearing up for 2013 as well.
The Federal Home Loan Bank of Chicago is finalizing the total sum it will make available this year through its Downpayment Plus program, which will offer grants of up to $6,000 to qualifying homebuyers. Last year, member banks in Illinois received $7 million in program funds and helped 867 people buy houses in the state, according to the bank
Information, including a list of participating mortgage lenders, is available from the Illinois League of Financial Institutions, which administers the program, at ilfi.org.
Also, the Illinois Housing Development Authority, ihda.org, has several grant and loan programs to help borrowers. In 2012, it issued more than $187 million in single-family mortgages that allowed almost 1,700 families to buy homes. This year it will introduce more loan products, according to a spokeswoman.
Unfortunately, there is no central repository of information on the grant and loan programs available to homeowners in different communities, the varying qualifications and the changing amounts of money available. All have income limits, most require the completion of homebuyer education and some programs only work in certain communities.
Robin Coffey, head of lending for Neighborhood Lending Services, recommends that potential homebuyers consult with a housing counselor certified by the U.S. Department of Housing and Urban Development to learn about various programs. She also recommends people seek out rate quotes from at least three mortgage lenders to ensure that borrowers are getting the best loan terms for themselves.