The Illinois Housing Development Agency (IHDA) just launched a Reverse Mortgage Assistance Program for seniors with reverse mortgages avoid foreclosure. This program, funded by the U.S. Department of Treasury’s Hardest Hit Fund (HHF) created in 2010 to provide assistance to states hardest hit by the economic and housing market downturn, will provide up to $35,000. to pay overdue and future property taxes so that Illinois seniors with reverse mortgages can remain in their homes.
Reverse mortgages are instruments qualifying seniors (62 years and up) can use to borrow against equity built up in their homes. Lenders take over mortgage payments while borrowers are required to continue paying property taxes and insurance. Once the homes are sold or the owner moves/dies, borrowers (or their surviving family members) are required to pay back the equity loans to the lenders.
Obviously, there are two kickers here. First, the borrowers can lose their homes to foreclosure if they do not continue paying property taxes and home insurance on the secured property. And second, the surviving borrowers or family members must pay back the reverse mortgage loans to the lenders when the owners die, sell, move.
“There is a real need for this kind of assistance in Illinois,” says IHDA executive director, Audra Hamerrick. “Many of these seniors are on fixed incomes and took out reverse mortgages to help cover their healthcare of everyday living expenses. They simply do not have the resources to weather an unexpected home repair, medical event or loss of household income.”
The IHDA Program provides $35,000. to senior reverse mortgage borrowers to reinstate any delinquent property expenses, and pay future property taxes and insurance for up to 2 years. The borrowers are required to develop financial recovery plans with a certified housing counselor to ward off any immediate threat of foreclosure.
Illinois seniors with reverse mortgages must meet the following criteria in order to qualify for this program:
- The senior borrowers must have taken out an FHA reverse mortgage to secure a property located in Illinois.
- The senior borrowers must have experienced some sort of “qualifying” hardship.
- The secured property must be the borrowers’ primary residence.
- The senior borrowers must have a household income lower than 120% of their county’s median income for two people,or, in Cook County for example, $73,920.
Each state receiving federal dollars through the Hardest Hit Fund (HHF) defines the programs it provides to best meet the specific needs of their respective state’s owners, buyers, and housing counseling agencies.
For further information about the IHDA Reverse Mortgage Assistance Program for Illinois Seniors, contact H.O.M.E. DuPage in Wheaton – CCCS of Northern IL; Mortgage Education Foundation in Palos Heights; NW Side Housing Center; Restoration America, Inc. in Crystal Lake; Will County CCC in Juliet.