Aurora is looking to beef up its down payment assistance program after officials say it was nearly shut down because of the limited number of applications it was receiving.
The revamped program would offer homebuyers who qualify up to $26,000 in both grants and deferred loans. To qualify, those looking to buy a home would need to meet certain income requirements, be looking to purchase a house the city considers “affordable” for their level of income and would need to be willing to go through a homebuyer education course, which the city would pay for.
The Aurora City Council at its meeting on Tuesday is set to vote on funding for the program’s upgrade and for a variety of other programs and projects related to affordable housing. Some of that funding would come from money the city collects through its tax on gaming, but much also comes from money the city gets through the federal government with guidelines on how it can be spent.
The funding requests were all placed on the Tuesday meeting’s consent agenda, which is typically reserved for routine or non-controversial items that are all approved with a single vote, meaning they are likely to pass.
Currently, the city’s down payment assistance program offers only up to $5,000 in grants and has stricter requirements on who qualifies than are being proposed for the enhanced version, according to Director of Community Services Chris Ragona. He presented the funding requests to the City Council Public Health, Safety and Transportation Committee at a meeting on Aug. 26.
Housing prices, interest rates and other costs related to buying a home are “somewhat becoming out of reach for some of our first-time buyers,” Ragona said at the meeting.
“We’ve seen the number of clients that we’ve been able to assist really almost shut the program down,” he said. “This year, I think we’ve only served one or two.”
So, the proposed upgrades to the program would expand both who can apply and the amount of help a person could get.
The current program is only offered to first-time homebuyers who make at most 80% of the Area Median Income, or $95,900 per year for a family of four, according to Ragona’s presentation. The proposed enhanced version of the program would not be limited to first-time homebuyers and would loosen the income requirement to 120% of the Area Median Income, or $143,880 per year for a family of four.
Many people who make between the current income level requirement and the proposed new requirement are in starter homes, but they are stuck there because they aren’t able to buy up, limiting stock for first-time homebuyers, Ragona said at the meeting. And, the upgraded program would set aside funds specifically for those making at most 80% of the Area Median Income to make sure money is always available for likely first-time homebuyers, he said.
The city is also looking to “really crank up the investment” it can provide through the program, according to Ragona.
The expanded program would still offer the existing grant of up to $5,000 for closing cost assistance, but it would also offer an up to $1,000 grant for home repairs and up to $20,000 in the form of a deferred lien on the property for down payment assistance. The lien would not need to be paid back to the city until the house is sold or until it is no longer the person’s primary residence, Ragona said at the meeting.
Once the money comes back to the city, it can then be reinvested, he said.
Funding for the program would come from a mix of sources, but in total the Community Services Department is requesting $650,000. Some of those funds would come from the federal government through the Community Development Block Grant and HOME Investment Partnership Funds, while some would also come from the recently-created Aurora Affordable Housing Fund.
These three funding sources are also being tapped to support several other proposed programs and projects set to go before the Aurora City Council Tuesday.
When asked in a recent interview with The Beacon-News which of the programs and projects currently proposed for funding would have the biggest impact, he highlighted both the revamped down payment assistance program and a new tenant placement assistance program.
That new program would look to help those who for various reasons, such as prior evictions, low credit score or a criminal record, are consistently passed-over in “what is a very competitive rental market,” Ragona said at the committee meeting last month. The goal would be to work with landlords to provide some incentive, like multiple months of security deposits or some kind of bonus payment, to stop these people from always being ranked lower than other potential renters, he said.
But, after the person moves in, it is up to the renter to keep up with payments and meet other requirements of the lease, and the city will stay out of it, according to Ragona.
Unlike the down payment assistance program, which is run by the city, the tenant placement assistance program would be managed by the nonprofit HOPE Fair Housing Center. The program this year is basically a pilot, Ragona said.
Funding for the program, requested at $100,000, would come from the Aurora Affordable Housing Fund, Ragona’s presentation showed. He told The Beacon-News that this round of programs is the first to come from that fund, which was established this year and is supported by the city’s tax on gaming.
Federal grants would support other affordable housing projects that are coming before the Aurora City Council on Tuesday.
That includes $725,000 to support a Habitat for Humanity housing development and $500,000 to support work within a rental community managed by The Neighbor Project. But, an approval Tuesday would simply set aside funds for those projects, and both would still need to come back before the City Council at a later date for formal approval, according to Ragona.
Federal funds would also go to support the city’s preferred housing counselors, which are The Neighbor Project and the Xilin Association, for homebuyer education courses required by the down payment assistance program, he said. If approved by the City Council, both would get $10,000 through the federal HOME Investment Partnership Program.
The city was planning to fund another program related to affordable housing — a tenant-based rental assistance program — but it could not find a partner organization to manage it during this round of grants, so it will be looking for one next year, Ragona said at the committee meeting last month.
In addition to the various programs and projects related to affordable housing, the Aurora City Council is also set to vote on $344,000 in total funding to various organizations for opioid use disorder programs. Those programs, which Ragona told The Beacon-News are varied in their focus, would be funded through money the state received from opioid settlements and passed along to communities including Aurora.
Now, the Community Services Department is gearing up for its next round of funding. Grant applications are set to open Tuesday, the same day a pre-application virtual workshop is scheduled to take place.
More information, including submission instructions for the grant applications, can be found at: www.aurora-il.org/1175/Community-Development
rsmith@chicagotribune.com
