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You may have seen the historically low mortgage rates brought on by the pandemic, which have prompted many first-time buyers to start their homeownership journey. However, increasing home prices mean that market-rate homeownership can be unattainable for low-income buyers. The good news is that there are some affordable homeownership options.
Habitat for Humanity: Habitat for Humanity has a homeownership program that aims to provide low and moderate-income buyers with a newly built, affordable home and homebuyer education. The program requirements vary by local Habitat affiliate, but generally, there are income requirements, credit requirements, savings requirements, and a commitment to contribute “sweat equity” (helping to build your home or volunteer for Habitat in another way). Habitat homes are built in certain locations or neighborhoods, and Habitat guarantees that the monthly mortgage payment is capped at 30% of a client’s monthly gross income. Clients with disabilities can work with Habitat to make sure their home is accessible to them.
Community Land Trusts: Community land trusts own plots of land in common. Houses built on that land are sold to qualifying homeowners at affordable rates while the community owns the land. Since the home is often leased to the homeowner, the homeowner retains only a portion of the equity accrued when they sell. Sellers also have to agree to sell at an affordable price to an income-qualifying buyer. There are income requirements, and it’s essential all members of the home buying team understand how CLTs work. The City of Chicago provides resources on owning with a CLT, finding qualified lenders and attorneys, and signing up for counseling and workshops.
Chicago’s Micro-Market Recovery Program (MMRP): The MMRP aims to create an opportunity for affordable homeownership in 10 Chicago neighborhoods that have been historically underfunded. The city works with public, private, and nonprofit community partners to support current homeowners and attract new buyers. Buyers may be eligible for up to $5000 of down payment assistance, and current homeowners may qualify for a forgivable loan to fund home repairs.
These are just some of the affordable homeownership options available, and it’s essential to do your research and talk to qualified professionals. GLCU counselors are here to provide free, unbiased guidance to first-time buyers at every step of the journey. Feel free to reach out online, by phone at 224-252-2620, or by email at housing at glcu dot org.
Feel free to reach out online, by phone at 224-252-2620, or by email at housing at glcu dot org.