Thanks to a new program, Illinois homeowners in danger of tax-and-insurance defaults on reverse mortgages could receive substantial help from the state’s top housing agency.
The Illinois Housing Development Authority launched its Reverse Mortgage Assistance Program this week, promising up to $35,000 in federal funding to residents with overdue property taxes and insurance payments.
“There is a real need for this kind of assistance in Illinois,” IHDA executive director Audra Hamernik said in a statement announcing the program. “Many of these seniors are on fixed incomes and took out a reverse mortgage to help with healthcare or everyday living costs. They don’t have the resources to weather an unexpected home repair, medical event, or loss of household income. This program offers the help they need to get back on track with their payments before they lose their home.”
Under the government-backed Home Equity Conversion Mortgage program, borrowers are not required to make any payments toward the loan balance during their lifetimes, but must continue to cover property taxes and homeowners’ insurance payments. Tax-and-insurance defaults could result in foreclosures and the residents’ removal from the property.
In order to qualify for the program, Illinois residents must experience a “qualifying hardship,” and have a household income that’s less than 120 percent of their specific county’s median figure; residents of Chicago and other towns in Cook County need only bring in less than $73,920 for a two-person household. Homeowners who qualify can then receive up to $35,000 for current and future delinquent expenses for up to two years.
The IHDA program derives its money from the Treasury Department’s Hardest Hit Fund program, a 2010 initiative that funnels funds to those who experienced hardships during the housing crisis and Great Recession. The IHDA also uses Hardest Hit Fund programs to provide various types of assistance to first-time homebuyers and current homeowners in Illinois, as well as funding general blight elimination programs.
Written by Alex Spanko