Chicago to Address Foreclosure Crisis by Community

August 18, 2011

New help is coming to the Chicago real estate market.

Mayor Rahm Emanuel has unveiled a new program designed to help stabilize property values in nine Chicago neighborhoods hardest hit by the foreclosure crisis.

The Micro-Market Recovery Program will use between $15 and $20 million in loans to try to bring stable home ownership to more than 2,000 foreclosed and vacant Chicago homes over the next several years.

cartoon of three people pushing a home out of a holeThe city will use the money to assist underwater homeowners, rehabilitate foreclosed homes for sale, provide incentive programs to potential buyers and offer financing to developers who will fix up and sell the homes on their own.

The loan money is coming from the John T. and Catherine D. MacArthur Foundation, which will work with the Chicago Department of Housing and Economic Development to design loan products that specifically address the needs of the targeted communities.

There is hope that the program will bring in private capital as well, mostly from local banks who own the foreclosed properties, to bring the total to $50 million.

The plan targets small sub-sections of nine Chicago neighborhoods most affected by foreclosures: Humboldt Park, Chatham, Chicago Lawn, West Woodlawn, Auburn Gresham, West Pullman, Belmont Cragin, Englewood and Grand Boulevard.

These areas still possess a market interest to potential homeowners and residential developers. The Auburn-Gresham neighborhood is hosting a trolley tour of eight homes rehabilitated through the Neighborhood Stabilization Program on Saturday, August 27.

There were more than 10,500 homes foreclosed upon in Chicago last year. That’s a 20 percent increase from the previous year. It is estimated that 95 percent of the properties are currently vacant.

Let’s hope this program makes a difference.

“Through close collaboration with Chicago’s non-profit and community organizations the Micro-Market Recovery Program will stabilize and sustain local property values on a community level,” said Mayor Emanuel.

“This program will move Chicago from a house-by-house approach to a community-focused strategy, which will do a better job of protecting residents from the devastating impact of foreclosures and will have a positive impact on our neighborhoods.”

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