As part of the recovery from the 2008 market crash, real estate values have increased much faster in some parts of the United States than in Illinois. As of March 31, 2016, approximately 8% of all U.S. house owners (4 million homeowners) owes a mortgage debt that is greater than the market value of the property, something known as as being “underwater.” In Illinois, 14.4% of all homes remain under water, the 3rd-highest under-water state in the U.S. Under-water homeowners have two pathways to recover positive equity in their homes: firstly, by continuing to pay off the mortgage in times of market stability, they can reduce the debt down to a level that is lower than the market value; and secondly, they can work with their neighbors to increase community standing and achieve a positive rate of return on the market value of their home.
The I-Refi program, from the Illinois Housing Development Authority (IHDA), is aimed at homeowners who owe more on their mortgages than the home itself is worth. Since August 1st eligible homeowners, have been able to apply for admission to the “Hardest Hit” program. Residents and families helped by the program could see a reduction in the amount of unpaid equity remaining on their mortgages.
The Illinois program is being backed by $45.7 million in U.S. Treasury funding. It is projected that 1,800 homeowner applicants will successfully apply for admission to the program and will get debt-reduction assistance of approximately $25,000 per home. To qualify, applicants must owe at least 10% more than the value of their home, up to $50,000. Despite being under water, they must have been current on making mortgage payments for at least the past 12 months; and must live in the home. Previous recipients may not apply.