Partnership for Homeownership Foundation
Springfield, Ill.
Represented by Beth Llwellyn
Description of Contribution
The Quincy Initiative was developed by the Partnership for HomeOwnership with a grant of $677,550 from the Illinois Affordable Housing Trust Fund and $2.5 million in low interest mortgage money from the Illinois Housing Development Authority. The program targeted a large section of Quincy Illinois, a predominately minority section where one out of two homes were rentals and median income was less than 50% ($18,824) of the county. Families with income of less than 60 of county median received a 3.5% fixed rate interest rate with $3000 to $5000 downpayment assistance. Families with incomes over 60% of county median received a 5.25% fixed rate mortgage with $3000 in assistance. Blessing Hospital gave an additional $5000 downpayment to their qualifying lower income employees. All loans required downpayment of 2% of the purchase price. Home Inspections were required, paid at closing, and repairs financed into the loans. Lots donated by the City of Quincy were used to develop modular housing. All applicants were first-time homeowners.
Impact
This was a two year project. All families required considerable debt restructure and credit counseling. Three banks participated, often re-writing car loans or consolidating debt to get the applicants' total debt structure to no more than 20% of their monthly income. The results are gratifying, showing immediately as you drive through the streets. Thirteen loans were made to families with incomes below 50% of median income. Ten loans were made to families with incomes between 51% and 60% of county median, and nine loans were made to families between 61% and 80% of county median. The majority of these applicants were referred by a church who initially contacted the PFHO for help. Some were on Social Security. In each case, these families purchased updated, sturdy homes for much less than they were paying in rent. Minnie Johnson, 72 years young, African-American, worked for two years to pay down debt, the majority of which was accumulated over many years as a foster mother housing pregnant teenagers, teaching them life and parenting skills. The Illinois Association of REALTORS contributed an additional $10,000 to allow Miss Minnie to purchase a new 3 bedroom home with an attached garage, formal dining room and two baths, one handicap accessible. I told her she was my hero.
Innovation
This was the first effort with Employer Assisted Housing for IHDA and for PFHO. No guidelines, applications or forms yet existed. With PFHO legal counsel and the IHDA legal team such documents were drafted and put into use. Over the first 6 months, many changes were made, requirements altered until a working model existed that could be replicated elsewhere in the state. It took a collaborative effort with the three local lenders and their dedicated staff to develop policy and resolve credit issues. FICO scores were not used in evaluating applicants, face to face interviews and credit/financial counseling were paramount prior to applicant attending a homebuyer education class. Medical collections were treated as a monthly debt subject to a written agreement for repayment from the creditor and a 6 month on-time payment history. Mandatory home inspections were critical, due to the income level of the applicants and Quincy's lovely but aging housing stock.
Minority Focus
The request for assistance initially came from Elaine Davis, and the First Baptist Church, predominately African-American, the members having signed a two page petition. Letters of support came from these Quincy businesses: the Quincy NAACP, the Illinois Department of Human Services, Walter Hammond Daycare, Redmon and Lee Youth and Adult Association, Quincy Housing Authority, Weir Development, Stotts Tire and Auto Center, The Cathedral of Worship (including a 3 page petition), The Bethel African Methodist Episcopal Church (including a 1 page petition) and eight individual letters from residents within this targeted area.