550 prospective area homebuyers will be offered $15,000 down payment grants
Wells Fargo & Co. will offer $8.2 million in down payment assistance grants this month to almost 550 homebuyers in Chicago and 28 suburbs, the bank said Wednesday.
The bank's CityLIFT program, announced at a news conference with officials from the Illinois attorney general's office and the Justice Department, is one aspect of a national fair-lending settlement announced with Wells Fargo in July. That settlement resolved allegations that the bank's black and Hispanic borrowers were allegedly steered into high-cost, subprime mortgages.
Grants of $15,000 will be awarded to eligible homebuyers Oct. 26-27 at McCormick Place.
"This is a rare opportunity, and it is one prospective homeowners should absolutely look into," said Illinois Attorney General Lisa Madigan.
To qualify for the grants, which are forgivable after five years, prospective homebuyers must have income equal to or less than 120 percent of the area's median income; that translates to gross income of $72,800 for a family of two and $90,950 for a family of four. They also must be preapproved for a mortgage.
That preapproval letter does not need to come from Wells Fargo. Consumers who are not Wells Fargo customers can receive the grants so long as they meet the other eligibility criteria, according to Jon Campbell, a Wells Fargo executive vice president. Mortgage brokers cannot be used.
"We wanted to be sure it wasn't just a program for people that get their mortgages from Wells Fargo," he said.
Participants do not need to be first-time homebuyers but must undergo eight hours of financial counseling before a purchase closes. The grants are restricted for use on owner-occupied homes, but that can include two- to flour-flat buildings.
"We hope it can give a little jump-start to the market here," said Ed Jacob, executive director of Neighborhood Housing Services of Chicago Inc., the nonprofit that will screen people for the program and provide the required counseling. "This recovery has been uneven. To the extent that this can be a tool in the recovery of some neighborhoods, it's a good thing."
Homes can be purchased anywhere within the city of Chicago as well as suburbs hard hit by the housing crisis. With a few exceptions, most of the communities chosen for the program are in the south suburbs. They are Bedford Park, Blue Island, Calumet City, Chicago Heights, Country Club Hills, Dolton, Glenwood, Harvey, Hazel Crest, Homewood, Lansing, Markham, Matteson, Oak Lawn, Park Forest, Richton Park, Riverdale, South Holland, Forest View, Stickney, Ford Heights, Lynwood and South Chicago Heights; Sauk Village, Berwyn, Cicero, Bellwood and Maywood also are included.
"We took a lot of time to identify the neighborhoods that would benefit most from this program," said Thomas Perez, a Justice Department assistant attorney general.
During the McCormick Place two-day event, prospective homebuyers who meet the eligibility criteria will receive a commitment letter, reserving their $15,000 grant. The consumer then has 60 days to find a home and sign a purchase contract. Otherwise, the grant money goes back into the pool.
Wells Fargo will work with real estate agents in the different communities so consumers can take virtual tours of properties during the event, as well as board buses to tour available distressed and nondistressed homes in the targeted areas.
"It's education, it's preapproval and it's helping them actually consider what kinds of properties are available," Campbell said. "The combination makes this an important program."
Early registration is encouraged for the event, which will be from 10 a.m. to 7 p.m. More information is available at wellsfargo.com/citylift or at 866-802-0456.
Last month, the CityLIFT program was conducted in Philadelphia as part of the Justice settlement, and all $10 million was committed.
As of late August, the bank's NeighborhoodLIFT program had led to the sale of 263 homes in 11 other housing markets, with an additional 244 home purchases in the pipeline.
In July 2009, the Illinois attorney general's office sued Wells Fargo over its minority lending practices, and in October 2011, a Cook County Circuit Court judge denied the bank's motion to dismiss the state's case. That case was resolved with the Justice Department's $175 million-plus national settlement, the second-largest fair-housing settlement in history, after December's $335 million agreement that settled similar allegations against Countrywide Financial Corp., a subsidiary of Bank of America.
Perez and Madigan said the process of contacting borrowers who may be due compensation from the two settlements would begin soon.