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U.S Department of Housing and Urban Development
U.S. Department of the Treasury

Spotlight on the Housing

Market in Chicago-JolietNaperville, IL-IN-WI

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts to Stabilize the Housing Market andPolicy Development and Research | March 2012
The Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area (Chicago) is located along the western and southern coastlines of Lake Michigan
and includes 14 counties in 3 states: Cook (includes City of Chicago), DeKalb, and six other counties in Illinois; Lake (includes City of Gary), and
three other counties in Indiana; and Kenosha County in Wisconsin. The challenges in the diverse Chicago housing market have been more severe
than those in most areas of the nation. During the early part of the last decade, local home prices grew at a slower pace than the national average;
however, prices have since fallen by a greater percentage than in the nation as a whole. Declining property values in Chicago were fueled in part
by excess housing construction in the years prior to the crisis, but also by rising defaults driven first by unsustainable mortgages then by the economic
downturn and climbing unemployment. The foreclosure crisis in Chicago also came at the end of a significant uptick in suburban poverty rates. While
the city’s low-income population remained basically flat during this time, the low-income population in surrounding Cook County increased by 7.4
percent. Other suburban areas saw increases by more than 50 percent. Economic conditions in Chicago are starting to improve, but the local housing
market remains fragile - with high concentrations of distressed mortgages (those 90 or more days delinquent or in foreclosure), large numbers of
vacant homes, and many severely underwater mortgages. Contributing to the high share of distressed mortgages is a longer than average foreclosure
processing time in Illinois (averaging 575 days) which keeps those homes in the foreclosure pipeline longer. However, the Administration’s broad
approach to stabilize the housing market has been a real help to homeowners in Chicago and surrounding cities. This addendum to the Obama
Administration’s Housing Scorecard provides a summary of trends and conditions in the local economy and the impact of the Administration’s efforts to
stabilize the housing market and help local homeowners.

Population Growth, Employment, and Housing Market:

With 9.46 million people according to the most recent Census, the Chicago MSA is the third largest in the nation. From 2000 to 2010, population
growth was slow, increasing at an average rate of just 0.4 percent per year. Natural population growth (births minus deaths) accounted for all of
that increase, as an average of 36,300 more people moved out of the Chicago MSA each year than moved in. In Cook County, the population
declined by an average of 18,200 people, or 0.3 percent, annually. During the decade spanned by the Census, new housing production exceeded
household growth in the Chicago MSA; net annual housing unit growth at 1.0 percent was approximately twice the corresponding population and
household growth rates. This excess construction contributed to an oversupply of housing and led to steeper price declines after the housing bubble
burst. According to the Census Bureau, the number of vacant units in Chicago increased by an average of 13,900 units, or 7.7 percent annually
during the 2000s, almost twice the national rate during the same period. Unlike in other parts of the nation where investor speculation was a major
cause of overbuilding prior to the crisis, investor home purchases in Chicago represented a relatively small share of total purchases. Specifically, from
the first half of 2000 to the first half of 2006, home sales to investors in the Chicago-Joliet-Naperville Metropolitan Division rose from 5 to 10 percent
of all sales, while the corresponding increase for the nation was 7 to 16 percent. Speculative construction of inner city condominium units occurred in
Chicago, and these units did not sell to owner occupants or to investors, contributing to the overbuilding.
Chicago Housing Unit Growth Outpaced Population and Household Growth During the Past Decade
Date of Census

4/1/2000

4/1/2010

Chicago Population

9,098,970

9,461,105

Annual Growth Rate
Chicago Households
Annual Growth Rate
Chicago Housing Units
Annual Growth Rate

-

0.4%

3,280,055

3,475,726

-

0.6%

3,462,197

3,797,247

-

1.0%

Source: Census Bureau (2000 and 2010 Decennial)

Spotlight on Chicago MSA | Page 1

	
  people	
  in	
  Cook	
  County	
  increased	
  by	
  7.4	
  percent.	
  Although	
  the	
  city’s	
  low-­‐income	
  populaGon	
  remained	
  basically	
  flat	
  during	
  this	
  Gme,	
  the	
  uring	
  the	
  2000s,	
  almost	
  twice	
  the	
  naGonal	
  rate	
  during	
  the	
  same	
  period.	
  Unlike	
  other	
  parts	
  of	
  the	
  naGon	
  for	
  whi
or	
  7.7	
  percent	
  annually	
  d low-­‐income	
  
	
  suburbs	
  increased	
  by	
  more	
  than	
  50	
  percent.	
  	
  Economic	
  condiGons	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago,	
  but	
  the	
  local	
  housing	
  market	
  remains	
  fragile	
  -­‐	
  with	
  
speculaGon	
  was	
  a	
  major	
  cause	
  of	
  overbuilding	
  prior	
  to	
  the	
  crisis,	
  investor	
  home	
  purchases	
  in	
  Chicago	
  represented	
  a	
  smaller	
  share	
  of	
  tota
s	
  of	
  distressed	
  mortgages,	
  large	
  numbers	
  of	
  vacant	
  homes,	
  and	
  many	
  severely	
  underwater	
  mortgages.	
  	
  ContribuGng	
  to	
  the	
  high	
  share	
  of	
  distressed	
  
in	
  the	
  naGon.	
  Specifically,	
  from	
  the	
  first	
  half	
  of	
  2000	
  to	
  the	
  first	
  half	
  of	
  2006,	
  home	
  sales	
  to	
  investors	
  in	
  the	
  Chicago-­‐Joliet-­‐Naperville	
  Met
U.S Department foreclosure)	
  is	
  a long	
  f Urban processing	
  Gme	
  in	
  
0	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  of Housing 	
  andoreclosure	
  Development Illinois	
  (averaging	
  575	
  days)	
  which	
  keeps	
  distressed	
  mortgages	
  in	
  the	
  
Division	
  rose	
  from	
  5	
  to	
  10	
  percent	
  of	
  all	
  sales,	
  while	
  the	
  corresponding	
  increase	
  for	
  the	
  naGon	
  was	
  7	
  to	
  16	
  percent.	
  In	
  Chicago,	
  another	
  c
e	
  longer.	
  However,	
  the	
  AdministraGon’s	
  broad	
  approach	
  to	
  stabilize	
  the	
  housing	
  market	
  has	
  been	
  a	
  real	
  help	
  to	
  homeowners	
  prior	
  to	
  the	
  crisis	
  was	
  speculaGve	
  construcGon	
  of	
  inner	
  city	
  condominium	
  units	
  which	
  did	
  not	
  sell	
  to	
  owner	
  occupants	
  or	
  to	
  
U.S. Department of the Treasury
overbuilding	
   in	
  Chicago	
  and	
  surrounding	
  
m	
  to	
  the	
  Obama	
  AdministraGon’s	
  Housing	
  Scorecard	
  provides	
  a	
  summary	
  of	
  trends	
  and	
  condiGons	
  in	
  the	
  local	
  economy	
  and	
  the	
  impact	
  of	
  the	
  
	
  
orts	
  to	
  stabilize	
  the	
  housing	
  market	
  and	
  help	
  local	
  homeowners.	
  

owth, Employment, and Housing Market:

f	
  9.46	
  million	
  people,	
  the	
  Chicago	
  MSA	
  is	
  the	
  third	
  largest	
  in	
  the	
  
U.S. Department
the	
  most	
  recent	
  Census.	
  From	
  2000	
  to	
  2010,	
  populaGon	
  growth	
  was	
  
an	
  average	
  rate	
  of	
  0.4	
  percent	
  per	
  year.	
  During	
  this	
  period,	
  natural	
  
births	
  minus	
  deaths)	
  accounted	
  for	
  all	
  of	
  the	
  increase,	
  as	
  an	
  average	
  
ple	
  moved	
  out	
  of	
  the	
  Chicago	
  MSA	
  each	
  year	
  than	
  moved	
  in.	
  	
  In	
  
e	
  the	
  City	
  of	
  Chicago	
  is	
  located,	
  the	
  populaGon	
  declined	
  by	
  an	
  
eople,	
  or	
  0.3	
  percent,	
  annually.	
  	
  

Economic	
  condiGons	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago.	
  Although	
  the	
  local	
  economy	
  expanded	
  by	
  an	
  average	
  of	
  42,700	
  jobs	
  per	
  year,	
  re
the	
  4	
  year	
  period	
  from	
  the	
  second	
  quarter	
  of	
  2004	
  through	
  the	
  first	
  quarter	
  of	
  2008,	
  job	
  losses	
  were	
  significant	
  as	
  a	
  result	
  of	
  the	
  recent	
  r
second	
  quarter	
  of	
  2008	
  through	
  the	
  first	
  quarter	
  of	
  2010,	
  job	
  losses	
  averaged	
  165,500	
  jobs,	
  or	
  3.6	
  percent	
  per	
  year.	
  A	
  modest	
  recovery	
  h
Chicago	
  Housing	
  Unit	
  Growth	
  ODevelopmentao| 0.6	
  percent.	
  The	
  professional	
  and	
  business	
  services,	
  construcGon,	
  and	
  wholesale	
  trade	
  sectors	
  have	
  been	
  the	
  major
utpaced	
  Population	
   nd	
   Office of Policy Development and Research
of Housing and Urban averaging	
  26,700,	
   r	
  
2011,	
  i Decade
Household	
  Growth	
  During	
  the	
  Past	
  ncreasing	
  jobs	
  by	
  a	
  combined	
  total	
  of	
  40,700	
  per	
  year.	
  Offsegng	
  job	
  gains	
  during	
  this	
  same	
  period	
  were	
  declines	
  in	
  the	
  governme
losses	
  of	
  6,500	
  and	
  3,400	
  jobs,	
  respecGvely.	
  The	
  unemployment	
  rate	
  for	
  the	
  Chicago	
  MSA	
  remains	
  high,	
  but	
  has	
  improved	
  from	
  a	
  high	
  of
Date	
  of	
  Census
# December	
  2011.	
  	
  The	
  naGonal	
  unemployment	
  rate	
  reached	
  a	
  high	
  of	
  10.0	
  in	
  October	
  2009	
  and	
  fell	
  to	
  8.5	
  by	
  December	
  2011.	
  
4/1/10
Chicago	
  Population
# 	
  
9,461,105
	
  	
  	
  Annual	
  Growth	
  Rate	
  
-­‐ 	
  
0.4%

The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012
#

3,475,726

138	
  

1

136	
  

1

Thousands	
  

134	
  
Millions	
  

Chicago	
  Households

Economic conditions in Chicago are showing strongRsigns
	
  	
  	
  Annual	
  Growth	
   ate	
  
-­‐
0.6%
Chicago	
  Housing	
  Units
#
3,797,247
of improvement. Although the local economy expanded
Job Market Conditions Improving for Chicago and the Nation
	
  	
  	
  Annual	
  Growth	
  Rate	
  
-­‐
1.0%
Quarterly	
  Nonfarm	
  Employment	
  
by an average of 42,700 jobs per year, Source: Census Bureau a and 2010 Decennial)
representing (2000
1 percent pace of growth during the 4 year period from
panned	
  by	
  the	
  Census,	
  new	
  housing	
  producGon	
  exceeded	
  household	
  growth	
  in	
  the	
  Chicago	
  MSA,	
  and	
  this	
  excess	
  construcGon	
  
4,600	
  
the second quarter of 2004 through the first quarter of
versupply	
  of	
  housing	
  and	
  led	
  to	
  steeper	
  price	
  declines	
  amer	
  the	
  housing	
  bubble	
  burst.	
  According	
  to	
  the	
  Census,	
  household	
  growth	
  
nt	
  annually	
  between	
  2000	
  and	
  2010,	
  but	
  were significant as a resultpercent	
  was	
  approximately	
  twice	
  the	
  corresponding	
  
2008, job losses net	
  annual	
  housing	
  unit	
  growth	
  at	
  1.0	
   of the recent
sehold	
  growth	
  rates.	
  According	
  to	
  the	
  Census	
  Bureau,	
  the	
  number	
  of	
  vacant	
  units	
  in	
  Chicago	
  increased	
  by	
  an	
  average	
  of	
  13,900	
  units,	
  
4,500	
  
recession. During the two year he	
  same	
   eriod.	
   the other	
  parts	
  
ally	
  during	
  the	
  2000s,	
  almost	
  twice	
  the	
  naGonal	
  rate	
  during	
  tperiodpfromUnlike	
  second of	
  the	
  naGon	
  for	
  which	
  investor	
  
major	
  cause	
  of	
  oquarter of 2008 cthrough the first quarterCof 2010, the a	
  smaller	
  share	
  of	
  total	
  purchases	
  than	
  
verbuilding	
  prior	
  to	
  the	
   risis,	
  investor	
  home	
  purchases	
  in	
   hicago	
  represented	
  
fically,	
  from	
  the	
  first	
  half	
  of	
  2000	
  to	
  the	
  first	
  half	
  of	
  2006,	
  home	
  sales	
  to	
  investors	
  in	
  the	
  Chicago-­‐Joliet-­‐Naperville	
  Metropolitan	
  
4,400	
  
region averaged 165,500 jobs lost, or 3.6 percent- per
	
  to	
  10	
  percent	
  of	
  all	
  sales,	
  while	
  the	
  corresponding	
  increase	
  for	
  the	
  naGon	
  was	
  7	
  to	
  16	
  percent.	
  In	
  Chicago,	
  another	
  cause	
  of	
  the	
  
year. A modest recovery has been underway id	
  not	
  sell	
  with occupants	
  or	
  to	
  investors.	
  
since, to	
  owner	
  
o	
  the	
  crisis	
  was	
  speculaGve	
  construcGon	
  of	
  inner	
  city	
  condominium	
  units	
  which	
  d
4,300	
  
annual job gains averaging 26,700, or 0.6 percent.
The professional and business services, construction, and
4,200	
  
wholesale trade sectors have been the major contributors
s	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago.	
  Although	
  the	
  local	
  and 2011, increasing jobs 2,700	
  jobs	
  per	
  year,	
  represenGng	
  a	
  1.0	
  percent	
  pace	
  of	
  growth	
  during	
  
to job growth during 2010 economy	
  expanded	
  by	
  an	
  average	
  of	
  4 by
om	
  the	
  second	
  quarter	
  of	
  2004	
  through	
  the	
  first	
  quarter	
  of	
  2008,	
  job	
  losses	
  were	
  significant	
  as	
  a	
  result	
  of	
  the	
  recent	
  recession.	
  During	
  the	
  two	
  year	
  period	
  from	
  the	
  
a combined total of 40,700 per year. Offsetting job gains
008	
  through	
  the	
  first	
  quarter	
  of	
  2010,	
  job	
  losses	
  averaged	
  165,500	
  jobs,	
  or	
  3.6	
  percent	
  per	
  year.	
  A	
  modest	
  recovery	
  has	
  been	
  underway	
  since,	
  with	
  annual	
  job	
  gains	
  
r	
  0.6	
  percent.	
  Tduring this same period were declines inholesale	
  trade	
  sectors	
  have	
  been	
  the	
  major	
  contributors	
  to	
  job	
  growth	
  during	
  2010	
  and	
   Year	
  and	
  Quarter	
  
he	
  professional	
  and	
  business	
  services,	
  construcGon,	
  and	
  w the government
bs	
  by	
  a	
  combined	
  total	
  of	
  40,700	
  per	
  year.	
  Offsegng	
  job	
  gains	
  during	
  this	
  same	
  period	
  were	
  declines	
  in	
  the	
  government	
  and	
  informaGon	
  sectors,	
  with	
  average	
  annual	
  
Chicago	
  MSA	
  
NaGon	
  (right	
  axis)	
  
and information sectors, with average annual losses of
3,400	
  jobs,	
  respecGvely.	
  The	
  unemployment	
  rate	
  for	
  the	
  Chicago	
  MSA	
  remains	
  high,	
  but	
  has	
  improved	
  from	
  a	
  high	
  of	
  11.1	
  in	
  January	
  2010	
  to	
  10.0	
  percent	
  in	
  
6,500 and 3,400 jobs, respectively. Compared by	
   the
Seasonally	
  Adjusted	
  Data	
  	
  
he	
  naGonal	
  unemployment	
  rate	
  reached	
  a	
  high	
  of	
  10.0	
  in	
  October	
  2009	
  and	
  fell	
  to	
  8.5	
  to December	
  2011.	
  
Source:	
  Bureau	
  of	
  Labor	
  	
  StaGsGcs	
  
national unemployment rate -- which peaked in October
	
  
2009 at 10.0 and fell to 8.5 by December 2011 -- the
unemployment rate for the Chicago MSA remains high, but
Unemployment Rate Remains High
has improved from a high of 11.1 in January 2010 to 10.0
Job Market Conditions Improving for Chicago and the Nation
Monthly	
  Unemployment	
  Rate	
  (Percent)	
  
percentQuarterly	
  Nonfarm	
  Employment	
  
in December 2011.

132	
  
130	
  
128	
  
126	
  

	
  

Millions	
  

12	
  
Home sales in the Chicago MSA remain at low levels.138	
  
Existing home sales began a steep decline in 2006,
10	
  
136	
  
but have leveled off since 2008. New home sales have
8	
  
134	
  
been falling since 2005 but leveled off by 2009. Sales
of bank-owned properties and short sales remain high132	
  
at
6	
  
35 percent of existing home sales in the Chicago market
4	
  
compared to 29 percent nationally, which contributes 130	
  
to
2	
  
128	
  
continued weakness in Chicago home prices. During the
bubble years, a relatively sluggish economy and slow126	
  
0	
  
population growth kept Chicago home price increases
lower than national rates. The CoreLogic repeat-sales house
price index (HPI) shows that the rise in home prices in the
Year	
  and	
  Quarter	
  
Chicago	
  MSA	
  
NaGon	
  
Chicago-Joliet-Naperville, IL Metropolitanxis)	
  
Division was
	
  
Chicago	
  MSA	
  
NaGon	
  (right	
  a
Seasonally	
  Adjusted	
  Data	
  
less than two-thirds the national pace between 2000 and
Adjusted	
  Data	
  	
  
Spotlight on the Housing Market in Chicago-Joliet-Naperville, Illinois-Indiana-Wisconsin
Source:	
  Bureau	
  of	
  Labor	
  StaGsGcs	
  
mid-2006. From their peak in 2006 to the end of the house
eau	
  of	
  Labor	
  	
  StaGsGcs	
  
price bubble in April 2009, home prices fell by 23 percent
**Zip code areas used for neighborhoods
n	
  the	
  Chicago	
  MSA	
  remain	
  at	
  low	
  levels.	
  	
  ExisSng	
  home	
  sales	
  began	
  a	
  steep	
  decline	
  in	
  2006,	
  but	
  
off	
  since	
  2008.	
  inew	
  home	
  sales	
  have	
  been	
  falling	
  since	
  2005,	
  with	
  the national saverage
	
  N Chicago, about three-quarters of sales	
  leveling	
  off	
   ince	
  2009.	
  
-­‐owned	
  properSes	
  and	
  short	
  sales	
  remain	
  high	
  at	
  35	
  percent. xisSng	
  home	
  sales	
  in	
  the	
  
peak-to-low decline of 31 percent	
  of	
  e However, Chicago home
New and Existing Home Sales: Chicago Compared to the Nation
ket	
  compared	
  to	
  a	
  naSonal	
  rate	
  of	
  29	
  percent.	
  This	
  high	
  level	
  of	
  distressed	
  sales	
  contributes	
  to	
  
prices have ReflecSng	
  a	
  relaSvely	
  s - an additional 14 percent
Annual	
  Home	
  Sales	
  (thousands)	
  	
  
eakness	
  in	
  Chicago	
  home	
  prices.	
  	
  continued to fallluggish	
  economy	
  and	
  slow	
  populaSon	
  
from their peak in 2006 - compared han	
  naSonal	
  rates.	
  The	
  
ago	
  home	
  price	
  increases	
  during	
  the	
  house	
  price	
  bubble	
  were	
  lower	
  tto an additional 3
400	
  
peat-­‐sales	
  house	
  price	
  index	
  (HPI)	
  shows	
  that	
  the	
  rise	
  in	
  home	
  prices	
  in	
  the	
  Chicago-­‐Joliet-­‐
percent decline for national sales prices.

	
  Metropolitan	
  Division	
  was	
  less	
  than	
  two-­‐thirds	
  the	
  naSonal	
  pace	
  between	
  2000	
  and	
  mid-­‐2006.	
  
eak	
  in	
  2006	
  to	
  the	
  end	
  of	
  the	
  house	
  price	
  bubble	
  in	
  April	
  2009,	
  home	
  prices	
  fell	
  by	
  23	
  percent	
  in	
  
The he	
  naSonal	
  a rental housing market remains strong. Rental
ut	
  three-­‐quarters	
  of	
  tChicago verage	
  peak-­‐to-­‐low	
  decline	
  of	
  31	
  percent.	
  	
  However,	
  Chicago	
  
have	
  conSnued	
  to	
  fall	
  -­‐	
  an	
  addiSonal	
  14	
  Chicago have eak	
  in	
  2006	
  -­‐	
  compared	
  to	
  an	
  
vacancy rates in percent	
  from	
  their	
  p historically been lower than
percent	
  decline	
  for	
  naSonal	
  sales	
  prices.	
  	
  

the national average, but according to Reis Inc., the overall

rental	
  housing	
  market	
  remains	
  vacancy rate in rates	
  in	
  Chicago	
  have	
  historically	
  been	
  
apartment strong.	
  Rental	
  vacancy	
  Chicago was just 4.6 percent in
he	
  naSonal	
  average.	
  According	
  to	
  Reis	
  Inc.,	
  the	
  overall	
  apartment	
  vacancy	
  rate	
  in	
  Chicago	
  was	
  4.6	
  
the fourth quarter of 2011, down from 5.6 percent a year
e	
  fourth	
  quarter	
  of	
  2011,	
  down	
  from	
  5.6	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  current	
  naSonal	
  
earlier and well below the current national average of
2	
  percent.	
  	
  During	
  the	
  fourth	
  quarter	
  of	
  2011,	
  average	
  rents	
  in	
  Chicago	
  increased	
  by	
  2	
  percent	
  5.2
go	
  to	
  $1,086.	
  Tpercent. rent	
  naSonwide	
  also	
  increased	
  by	
  2	
  percent	
  to	
  $1,064	
  during	
  the	
  rents
he	
  average	
   During the fourth quarter of 2011, average same	
  

in Chicago increased by 2 percent from a year ago to
$1,086. The average rent nationwide also increased by 2
percent to $1,064 during the same period.

8,000	
  

350	
  

7,000	
  

300	
  

6,000	
  

250	
  

5,000	
  

200	
  

4,000	
  

150	
  

3,000	
  

100	
  

2,000	
  

50	
  

1,000	
  

0	
  

2003	
  

2004	
  

2005	
  

2006	
  

2007	
  

2008	
  

2009	
  

2010	
  

2011	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
  

NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
  

Chicago	
  MSA:	
  New	
  Sales	
  

Sources:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Home Price Rise Smaller Than for Nation
Post Bubble Decline Continues

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Spotlight on 220	
  
Chicago MSA | Page 2

0	
  

eak	
  in	
  2006	
  to	
  the	
  end	
  of	
  the	
  house	
  price	
  bubble	
  in	
  April	
  2009,	
  home	
  prices	
  fell	
  by	
  23	
  percent	
  in	
  
ut	
  three-­‐quarters	
  of	
  the	
  naSonal	
  average	
  peak-­‐to-­‐low	
  decline	
  of	
  31	
  percent.	
  	
  However,	
  Chicago	
  
have	
  conSnued	
  to	
  fall	
  -­‐	
  an	
  addiSonal	
  14	
  percent	
  from	
  their	
  peak	
  in	
  2006	
  -­‐	
  compared	
  to	
  an	
  
percent	
  decline	
  for	
  naSonal	
  sales	
  prices.	
  	
  
U.S Department of Housing and Urban Development

300	
  
250	
  

5,000	
  

200	
  

4,000	
  

150	
  

3,000	
  

100	
  

2,000	
  

50	
  

U.S. Department of the Treasury
rental	
  housing	
  market	
  remains	
  strong.	
  Rental	
  vacancy	
  rates	
  in	
  Chicago	
  have	
  historically	
  been	
  
he	
  naSonal	
  average.	
  According	
  to	
  Reis	
  Inc.,	
  the	
  overall	
  apartment	
  vacancy	
  rate	
  in	
  Chicago	
  was	
  4.6	
  
e	
  fourth	
  quarter	
  of	
  2011,	
  down	
  from	
  5.6	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  current	
  naSonal	
  
2	
  percent.	
  	
  During	
  the	
  fourth	
  quarter	
  of	
  2011,	
  average	
  rents	
  in	
  Chicago	
  increased	
  by	
  2	
  percent	
  
go	
  to	
  $1,086.	
  The	
  average	
  rent	
  naSonwide	
  also	
  increased	
  by	
  2	
  percent	
  to	
  $1,064	
  during	
  the	
  same	
  

6,000	
  

1,000	
  

0	
  

2003	
  

2004	
  

2005	
  

2006	
  

2007	
  

2008	
  

2009	
  

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts to Stabilize the Housing Market andPolicy Development and Research

2010	
  

2011	
  

| March 2012

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
  

NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
  

Chicago	
  MSA:	
  New	
  Sales	
  

Sources:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Trends in Mortgage
Delinquencies and Foreclosures:

Chicago homeowners continue to struggle with some of the highest
levels of mortgage delinquencies and foreclosures in the nation. As
of January 2012, Chicago placed 28th out of 366 metropolitan
areas ranked by share of mortgages at risk of foreclosure (90 or
more days delinquent or in the foreclosure process) according
to LPS Applied Analytics. LPS data also show that Chicago area
mortgages at risk of foreclosure increased by 1.5 percent during
the past year, from 125,400 in January 2011 to 127,300 in
January 2012, compared with a national decline of 10.4 percent
during the same period. CoreLogic data show that the rate of
mortgages at risk of foreclosure in Chicago since 2006 has been
Mortgage Delinquencies and Foreclosures:
consistently higher than in the nation, with a sharp spike upward in
wners	
  conSnue	
  to	
  struggle	
  with	
  sTracodata also showothat foreclosure starts nd	
  
2009. Realty ome	
   f	
  the	
  highest	
  levels	
   f	
  mortgage	
  delinquencies	
  a increased
the	
  naSon.	
  As	
  of	
  January	
  2012,	
  Chicago	
  ranked	
  28th	
  out	
  of	
  366	
  metropolitan	
  areas	
  for	
  the	
  share	
  of	
  
abruptly (47 percent) in the Chicago MSA in 2007 and 2008,
sk	
  of	
  foreclosure	
  (90	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  the	
  foreclosure	
  process)	
  according	
  to	
  LPS	
  
when single-family foreclosures were largely driven 1.5	
  unaffordable
iana-Wisconsin
cs.	
  	
  LPS	
  data	
  show	
  that	
  Chicago	
  area	
  mortgages	
  at	
  risk	
  of	
  foreclosure	
  increased	
  by	
  by percent	
  
year,	
  from	
  125,400	
  in	
  January	
  2011	
  to	
  127,300	
  in	
  January	
  2012,	
  compared	
  with	
  a	
  naSonal	
  decline	
  of	
  
loan products. Beginning in 2009, foreclosures were increasingly
d forthe	
  same	
  period.	
  CoreLogic	
  data	
  show	
  that	
  the	
  rate	
  of	
  mortgages	
  at	
  risk	
  of	
  foreclosure	
  in	
  
ring	
   neighborhoods
ana-Wisconsin
triggered by loss of income, unemployment, and strategic defaults,
en	
  consistently	
  higher	
  than	
  in	
  the	
  naSon	
  since	
  2006,	
  with	
  a	
  sharp	
  spike	
  upward	
  in	
  2009.	
  Realty	
  Trac	
  
according to the Federal Reserve Bank of Chicago.
that	
  newly	
  iniSated	
  foreclosures	
  increased	
  abruptly	
  (47	
  percent)	
  in	
  the	
  Chicago	
  MSA	
  in	
  2007	
  and	
  
d for neighborhoods

Home Price Rise Smaller Than for Nation
Post Bubble Decline Continues

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

220	
  
200	
  
180	
  
160	
  
140	
  
120	
  
100	
  

Chicago	
  Metropolitan	
  Division	
  

ew and Existing Home Sales: Chicago Compared to the Nation Realty Trac,
in the nation overall, it has improved. According to
Annual	
  Home	
  Sales	
  (thousands)	
  	
  

Rental Vacancy Rates Consistently Lower Than Nation
Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

8,000	
  

tressed	
  mortgages	
  in	
  Chicago	
  completions .6	
  pChicago declined from 2010	
  peak	
  level;	
  in	
  
foreclosure is	
  currently	
  at	
  9 in ercent,	
  matching	
  its	
  February	
   45,555 during
al	
  rates	
  have	
  declined	
  from	
  a	
  high	
  of	
  7.9	
  percent	
  in	
  February	
  2010	
  to	
  6.7	
  percent	
  currently.	
  A	
  parSal	
  
7,000	
  
8,000	
  
the	
  high	
  level	
  o2010 to 36,043ffor 2011, althoughhe	
  Sme	
  it	
  takes	
  to	
  complete	
  a	
  
f	
  mortgages	
  at	
  risk	
  of	
   oreclosure	
  in	
  Chicago	
  is	
  t lender process reviews
linois.	
  According	
  to	
  Realty	
  Trac,	
  the	
  average	
  foreclosure	
  processing	
  Slocally and nationally. 6,000	
  
continue to affect foreclosure completions me	
  in	
  Illinois,	
  which	
  employs	
  A
7,000	
  
closure	
  process,	
  was	
  575	
  days	
  ofthe	
  fourth	
  quarter	
  of	
  2011	
  (fourth	
  longest	
  among	
  states)	
  
major issue in	
   concern, however, is the relatively high concentration
5,000	
  
the	
  naSonal	
  rate	
  of	
  348	
  days.	
  	
  
6,000	
  

of distressed mortgages in many of Chicago’s neighborhoods. 4,000	
  
reclosure	
  rate	
  iCoreLogic data igher	
  than	
  in	
  talmost one-fourth of mortgage loanso	
  5,000	
  
n	
  Chicago	
  remains	
  h show that he	
  naSon	
  overall,	
  it	
  has	
  improved.	
  According	
  t
eclosure	
  compleSons	
  in	
  Chicago	
  declined	
  from	
  45,555	
  during	
  2010	
  to	
  36,043	
  for	
  2011,	
  although	
   3,000	
  
into	
  affect	
  foreclosure	
  cneighborhoodsand	
  naSonally.	
  share of distressed 4,000	
  
Chicago are in ompleSons	
  locally	
   where the A	
  major	
  issue	
  of	
  concern,	
  
reviews	
  conSnue	
  
2,000	
  
mortgages is more than twice in	
  m national rate. These hardest hit
relaSvely	
  high	
  concentraSon	
  of	
  distressed	
  mortgages	
  the any	
  of	
  Chicago's	
  neighborhoods.	
  
3,000	
  
show	
  that	
  almost	
  one-­‐fourth	
  of	
  mortgage	
  loans	
  in	
  Chicago	
  levels eighborhoods	
  where	
  the	
  share	
  1,000	
  
areas are also experiencing high are	
  in	
  n of residential vacancies,of	
  
gages	
  is	
  more	
  than	
  twice	
  the	
  naSonal	
  rate.	
  These	
  hardest	
  hit	
  areas	
  are	
  also	
  experiencing	
  high	
  levels	
  
underwater mortgages, and home price declines. In an effort to2,000	
  
cancies,	
  underwater	
  mortgages,	
  and	
  home	
  price	
  declines.	
  In	
  an	
  effort	
  to	
  stabilize	
  these	
  
0	
  
1,000	
  
	
  numerous	
  programs	
  sponsored	
  bneighborhoods, numerous programs sponsored by
and	
  
2004	
  
2005	
  
2006	
  
2008	
  
2009	
  
2010	
  
2011	
  
stabilize these y	
  state	
  2007	
  local	
  enSSes	
  in	
  partnership	
  with	
  the	
  federal	
  
e	
  currently	
  underway.	
  CoreLogic	
  reports	
  that	
  25	
  percent	
  of	
  mortgages	
  in	
  the	
  Chicago	
  MSA	
  are	
  
state and local entities in partnership withNtheSfederal government
0	
  
NaSon:	
  Ecompared	
  t(right	
  aercent	
  naSonally	
  -­‐	
  represenSng	
  addiSonal	
  homeowners	
  aaxis)	
  
NaSon:	
   ew	
   ales	
  (right	
   nd	
  loans	
  
water	
  –	
   xisSng	
  Sales	
  o	
  23	
  p xis)	
  
2005	
  
2006	
  
2007	
  
2008	
  
2009	
  
2011	
  
are currently underway. CoreLogic reports that 2010	
   percent of
25
sk.	
  	
  	
   2004	
  
Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
  
Chicago	
  MSA:	
  New	
  Sales	
  
mortgages
NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
  in the Chicago MSA are currently ales	
  (right	
  axis)	
   –
NaSon:	
  New	
  S underwater
c,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  
compared to 23 percent nationally Chicago	
  MSA:	
  New	
  Sadditional
- representing ales	
  
Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
  
homeowners and loans f	
  Realtors	
   at risk.
potentially
c,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  o
Home Price Rise Smaller Than for Nation
The share of distressed mortgages in Chicago is currently at 9.6
Post Bubble Decline Continues
percent, matching rice	
  Index	
  	
  (Jan	
  2010 	
  peak level; in contrast,
Repeat-­‐Sales	
   ouse	
  P its February 2000	
  = 100)	
  
Home PriceHRise Smaller Than for Nation
national rates have declined from a high of 7.9 percent in February
Post Bubble Decline Continues

2010 to 6.7 percent currently. 2 partial explanation for Chicago’s
Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  A000	
  =	
  100)	
  
higher share of mortgages at risk of foreclosure is the time it takes
to complete a foreclosure in Illinois. According to Realty Trac, the
average foreclosure processing time in Illinois, which uses the
judicial foreclosure process, was 575 days in the fourth quarter of
2011 (fourth longest among states) while the national rate was
348 days.

Area

Foreclosure
Completions

Chicago	
  Metropolitan	
  Division	
  

Chicago MSA

9,400

0.2%

Foreclosure
Completions

NaSon	
  

111,900

ic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  Chicago-­‐Joliet-­‐Naperville,	
  IL	
  Metropolitan	
  Division.	
  
Chicago	
  Metropolitan	
  Division	
  
Nation
175,800
0.1% NaSon	
  
2,574,400

ic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  CRates as Percent of AllIL	
  Metropolitan	
  Division.	
  
Note: Foreclosure hicago-­‐Joliet-­‐Naperville,	
   Housing Units;

Data through January 2011 for Foreclosures since April 2009
Source: Realty Trac and Census Bureau

Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

9	
  
8	
  
9	
  
7	
  
8	
  
6	
  
7	
  
5	
  
6	
  

Foreclosure	
  Completion	
  Rates	
  in	
  the	
  Chicago	
  MSA
Fourth	
  Quarter	
  2011
Since	
  April	
  1,	
  2009
Foreclosure	
  
Foreclosure	
  
Foreclosure	
  
Foreclosure	
  
Completions
Rate
Completions
Rate
Chicago	
  MSA	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  9,400	
  
0.2%
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  111,900	
  
2.9%
4	
  
Nation	
  
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  175,800	
  
0.1%
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Year	
  and	
  Quarter	
  2.0%
	
  2,574,400	
  
Note:	
  	
  Foreclosure	
  Rates	
  as	
  Percent	
  of	
  All	
  Housing	
  Units;
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Data	
  through	
  January	
  2012	
  for	
  Foreclosures	
  since	
  April	
  2009
Year	
  
Chicago	
  Metro	
  Area	
   and	
  Quarter	
  
NaSon	
  
Source:	
  Realty	
  Trac	
  and	
  Census	
  Bureau
Source:	
  Reis	
  Inc.	
  
4	
  
Area5	
  

Chicago	
  Metro	
  Area	
  

NaSon	
  

Source:	
  Reis	
  Inc.	
  

Share of Distressed Mortgages Substantially Higher Than the Nation
Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  All	
  AcSve	
  Mortgages)	
  

12	
  

Share of Distressed Mortgages Substantially Higher Than the Nation
Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  All	
  AcSve	
  Mortgages)	
  

10	
  
12	
  
8	
  
10	
  
6	
  
8	
  
4	
  
6	
  

0	
  
2	
  

Since April 1, 2009

Foreclosure
Rate

Rental Vacancy Rates Consistently Lower Than Nation

2	
  
4	
  

Foreclosure Completion Rates in the Chicago MSA
Fourth Quarter 2011

NaSon	
  

Source:	
  CoreLogic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  Chicago-­‐Joliet-­‐Naperville,	
  IL	
  Metropolitan	
  Division.	
  

gle-­‐family	
  Existing Homeargely	
  driven	
  by	
  unaffordable	
  loan	
  to the Nation
ew and foreclosures	
  were	
  l Sales: Chicago Compared products.	
  Beginning	
  in	
  2009,	
  
re	
  increasingly	
  triggered	
  by	
  loss	
  of	
  income,	
  (thousands)	
  	
   and	
  strategic	
  defaults,	
  according	
  to	
  the	
  
unemployment,	
  
Annual	
  H
Although the ome	
  Sales	
   rate in Chicago remains higher than
foreclosure
	
  Bank	
  of	
  Chicago.	
  	
  	
  

Foreclosure
Rate

2.9%
2.0%

0	
  
Chicago	
  MSA	
  
Source:	
  CoreLogic	
  

NaSon	
  

Chicago	
  MSA	
  

NaSon	
  

Source:	
  CoreLogic	
  

Spotlight on Chicago MSA | Page 3

0	
  

U.S Department of Housing and Urban Development
U.S. Department of the Treasury

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts to Stabilize the Housing Market andPolicy Development and Research | March 2012
Spotlight on the Housing Market in Chicago-Joliet-Naperville, Illinois-Indiana-Wisconsin MSA

he Administration’s Efforts to Stabilize the Chicago Housing Market:

The Administration’s Efforts
to Stabilize the Chicago
Housing Market:

om	
  the	
  launch	
  of	
  the	
  AdministraEon’s	
  assistance	
  programs	
  in	
  April	
  2009	
  through	
  the	
  end	
  of	
  January	
  
11,	
  more	
  than	
  220,500	
  mortgage	
  assistance	
  intervenEons	
  have	
  been	
  offered	
  to	
  homeowners	
  in	
  the	
  
icago	
  metropolitan	
  area.	
  	
  More	
  than	
  132,500	
  intervenEons	
  were	
  offered	
  through	
  the	
  Home	
  
ffordable	
  ModificaEon	
  Program	
  (HAMP)	
  and	
  the	
  Federal	
  Housing	
  AdministraEon	
  (FHA)	
  loss	
  miEgaEon	
  
d	
  early	
  delinquency	
  intervenEon	
  programs.	
  	
  An	
  esEmated	
  addiEonal	
  88,000	
  proprietary	
  mortgage	
  
odificaEons	
  have	
  been	
  offered	
  through	
  HOPE	
  Now	
  Alliance	
  servicers.	
  While	
  some	
  homeowners	
  may	
  
ve	
  received	
  help	
  from	
  more	
  than	
  one	
  program,	
  the	
  number	
  of	
  Emes	
  assistance	
  has	
  been	
  offered	
  in	
  
e	
  Chicago	
  MSA	
  From the launch of theoreclosures	
  completed	
  during	
  this	
  period	
  (111,900).	
  	
  In	
  
is	
  nearly	
  double	
  the	
  number	
  of	
  f Administration’s assistance
diEon	
  to	
  offers	
  programs id	
  to	
  homeowners,	
  the	
  AdministraEon’s	
  Neighborhood	
  StabilizaEon	
  
of	
  mortgage	
  a in April 2009 through the end of January
ogram	
  (NSP)	
  and	
  Hardest	
  Hit	
  Fund	
  have	
  helped	
  to	
  stabilize	
  the	
  Chicago	
  housing	
  market.	
  

2011, more than 220,500 mortgage assistance

ven	
  over	
  three	
  rounds,	
  the	
  Neighborhood	
  StabilizaKon	
  Program	
  hhomeowners innaEonwide	
  to	
  
interventions have been offered to as	
  invested	
  $7	
  billion	
  
lp	
  localiEes	
  work	
  with	
  non-­‐profits	
  and	
  community	
  development	
  corporaEons	
  to	
  turn	
  tens	
  of	
  
the Chicago metropolitan area. More than 132,500
ousands	
  of	
  abandoned	
  and	
  foreclosed	
  homes	
  that	
  lower	
  property	
  values	
  into	
  homeownership	
  
interventions were offered through the Home Affordable
portuniEes	
  and	
  	
  the	
  affordable	
  rental	
  housing	
  that	
  communiEes	
  need.	
  In	
  addiEon	
  to	
  stabilizing	
  
ighborhoods	
  and	
  providing	
  affordable	
  housing,	
  NSP	
  funds	
  have	
  helped	
  save	
  jobs.	
  Each	
  home	
  
Modification Program (HAMP) and the Federal Housing
rchased,	
  rehabilitated	
  and	
  sold	
  through	
  the	
  NSP	
  program	
  is	
  the	
  result	
  of	
  the	
  efforts	
  of	
  35	
  to	
  50	
  local	
  
Administration (FHA) loss mitigation and early delinquency
mployees.	
  

Mortgage Aid Extended More an 220,500 Times
to Mitigate Rising Foreclosures

Chicago	
  MSA:	
  CumulaEve	
  Offers	
  of	
  Aid	
  by	
  Source	
  Compared	
  with	
  Foreclosures	
  Since	
  April	
  1,	
  2009	
  	
  (Thousands)	
  
Mortgage	
  Aid	
  Offers	
  in	
  Chicago	
  MSA	
  from	
  April	
  2009	
  through	
  January	
  2012:	
  220,500	
  	
  	
  	
  
	
  Foreclosure	
  CompleEons	
  Over	
  Same	
  Period:	
  111,900	
  

250	
  
200	
  
150	
  
100	
  
50	
  
0	
  

intervention programs. An estimated additional 88,000

erall,	
  a	
  total	
  of	
  $264.9	
  million	
  has	
  been	
  awarded	
  to	
  twelve	
  grantees	
  in	
  the	
  Chicago	
  MSA:	
  	
  the	
  ciEes	
  of	
  
proprietary mortgage modifications have been offered
icago,	
  Elgin,	
  Gary,	
  and	
  Evanston;	
  the	
  counEes	
  of	
  Cook,	
  DuPage,	
  Kane,	
  McHenry,	
  Will,	
  Lake	
  County,	
  IL,	
  
d	
  Lake	
  County,	
  through gHOPE Now Alliance servicers. While some two	
  
IN.	
  	
  Eleven	
   overnment	
  jurisdicEons	
  received	
  $119.3	
  million	
  in	
  NSP1	
  funds,	
  
ceived	
  $116.1	
  million	
  in	
  NSP2	
  funds,	
  and	
  fihave receivedillion	
  in	
  NSP3	
  funds.	
  Approximately	
  248	
  
homeowners may ve	
  received	
  $29.5	
  m help from more than
useholds	
  have	
  already	
  benefited	
  from	
  NSP,	
  and	
  acEviEes	
  funded	
  by	
  the	
  program	
  are	
  expected	
  to	
  
one program, the number of times assistance f	
  how	
  these	
  f
ovide	
  assistance	
  to	
  an	
  addiEonal	
  1,823	
  owner	
  and	
  renter	
  households.	
  	
  Examples	
  ohas beenunds	
  
ve	
  been	
  put	
  to	
  offered in the Chicago MSA is nearly double the number
use	
  are	
  provided	
  below.	
  

of foreclosures completed during this period (111,900).
In addition to offers of mortgage aid to homeowners, the
Administration’s Neighborhood Stabilization Program
(NSP) and Hardest Hit Fund have helped to stabilize the
Chicago housing market.

864
30

0
0

hborhood	
  enEEes.	
  MPS	
  has	
  experienced	
  management	
  staff	
  and	
  protocols	
  established	
  for	
  quickly	
  
hasing	
  and	
  rehabilitaEng	
  units	
  to	
  halt	
  neighborhood	
  deterioraEon.	
  Mercy	
  has	
  been	
  successful	
  at	
  
iring	
  and	
  renovaEng	
  both	
  single-­‐family	
  and	
  mulEfamily	
  units	
  in	
  the	
  city’s	
  NSP1	
  target	
  areas.	
  	
  

th	
  NSP2	
  funds	
  of	
  $98.0	
  million,	
  tNSPity	
  of	
  Chicago	
  has	
  tailored	
  programs	
  to	
  the	
  local	
  cCompleted
ondiEons	
  of	
  
Chicago MSA he	
  C Activity (Housing Units)
Projected
e	
  neighborhood	
  types	
  to	
  reverse	
  the	
  decline	
  	
  
ed	
  by	
  foreclosed	
  and	
  abandoned	
  homes:	
  	
  a)	
  communiEes	
  prone	
  to	
  growth	
  and	
  quick	
  recovery,	
  b)	
  
NSP1 Total
865
248
muniEes	
  that	
  can	
  be	
  stabilized	
  around	
  targeted	
  	
  
stment	
  areas,	
  and	
  c)	
  communiEes	
  requiring	
  consolidaEon	
  to	
  reduce	
  the	
  	
  
Construction of new housing
2
1

Rehabilitation/reconstruction of
residential structures
NSP2 Total
Construction of new housing
Rehabilitation/reconstruction of
residential structures
NSP3 Total
Rehabilitation/reconstruction of
residential structures

EsEmated	
  Hope	
  Now	
  ModificaEons	
  

Foreclosure	
  CompleEons	
  

	
  

1.636935

NSP1 funds were granted to all states and selected local
834
0
94
governments on a formula basis under Division B, Title 0
94
0
III of the Housing and Economic Recovery Act (HERA)
of 2008; NSP2 funds authorized under the American
e	
  City	
  of	
  Chicago’s	
  NSP	
  strategy	
  has	
  been	
  to	
  invest	
  in	
  strategically	
  chosen	
  neighborhoods	
  of 2009
Recovery and Reinvestment Act (the Recovery Act) with	
  
Eonal	
  investment	
  support	
  from	
  local	
  and	
  naEonal	
  partners.	
  The	
  city	
  has	
  formed	
  a	
  unique	
  partnership	
  
provided grants to states, local gency,	
  to	
  invest	
  its	
   SP1	
  funds	
  of	
  $
	
  Mercy	
  Porkolio	
  Services	
  (MPS),	
  a	
  major	
  non-­‐profit	
  housing	
  agovernments,Nnonprofits 55.2	
  
on	
  through	
  an	
  extensive	
  network	
  of	
  more	
  than	
  50	
  compeEEvely	
  selected	
  developers	
  and	
  non-­‐profit	
  
and a consortium of nonprofit entities on a competitive

Homeownership assistance to low- and
moderate-income

Hamp	
  ModificaEons	
  

basis; and NSP3 funds authorized under the Dodd–Frank Wall Street Reform and
Consumer Protection Act of 2010 provided neighborhood stabilization grants to all
states and select governments on a formula basis.

Given over three rounds, the Neighborhood
Stabilization Program has invested $7 billion
nationwide to help localities work with non-profits and
pa	
  MSA	
  NSP	
  Activity	
  (Housing	
  Units) development corporations to turn tens of
Projected
Completed
community
	
  Total
865
248
thousands of abandoned and foreclosed homes that lower
nstruction	
  of	
  new	
  housing
2
1
property values into
the
meownership	
  assistance	
  to	
  low-­‐	
  and	
  moderate-­‐incomehomeownership opportunities and 56
33
habilitation/reconstruction	
  of	
  residential	
  structures
830
191
affordable rental housing that communities need.

	
  Total
nstruction	
  of	
  new	
  housing
habilitation/reconstruction	
  of	
  residential	
  structures
	
  Total
habilitation/reconstruction	
  of	
  residential	
  structures

FHA	
  Loss	
  MiEgaEon	
  

Note:	
  Data	
  on	
  HOPE	
  Now	
  proprietary	
  mortgage	
  modificaEons	
  are	
  not	
  available	
  at	
  metropolitan	
  area	
  level.	
  However,	
  HOPE	
  
Now	
  Alliance	
  reports	
  164,600	
  non-­‐HAMP	
  modificaEons	
  since	
  April	
  1,	
  2009	
  in	
  the	
  states	
  of	
  	
  IL,	
  IN,	
  and	
  WI	
  of	
  which	
  54	
  percent	
  
are	
  esEmated	
  by	
  HUD	
  to	
  have	
  occurred	
  in	
  the	
  Chicago	
  MSA.	
  
Sources:	
  Departments	
  of	
  HUD	
  and	
  Treasury,	
  HOPE	
  Now	
  Alliance,	
  and	
  Realty	
  Trac.	
  

33

56

830

191

864

0

30

0

834

0

94

0

94

0

In addition to stabilizing neighborhoods and providing affordable housing, NSP

	
   funds have helped save jobs. Each home purchased, rehabilitated and sold through
negaEve	
  impacts	
  of	
  blighted	
  is the resultcity’s	
  the iefforts ofthe	
  decline	
  in	
  hlocal employees.
the NSP program structures.	
  The	
   of goal	
   s	
  to	
  reverse	
   35 to 50 ome	
  sales,	
  lock	
  in	
  housing	
  
affordability	
  for	
  buyers	
  and	
  renters,	
  and	
  support	
  local	
  economic	
  development	
  and	
  job	
  growth.	
  The	
  City	
  of	
  Chicago	
  is	
  
a	
  naEonal	
  innovator	
  in	
  both	
  the	
  scale	
  and	
  intensity	
  of	
  this	
  type	
  of	
  targeEng.	
  
	
   Overall, a total of $264.9 million has been awarded to twelve grantees in the
•	
  Under	
  NSP3,	
  the	
  City	
  of	
  Chicago	
  has	
  tof Chicago, Elgin, Gary, and can	
  have	
  a	
  significant	
  impact	
  and	
  of
Chicago MSA: the cities argeted	
  areas	
  where	
  a	
  modest	
  investment	
   Evanston; the counties
act	
  as	
  a	
  market	
  sEmulus.	
  The	
  program	
  has	
  invested	
  in	
  such	
  areas	
  throughout	
  the	
  city,	
  focusing	
  on	
  communiEes	
  that	
  
Cook, DuPage, roperEes	
  (foreclosed	
  properEes	
   Lake County, IL, ith	
  an	
   Lake County, IN. Eleven
have	
  high	
  shares	
  of	
  REO	
  pKane, McHenry, Will, sEll	
  owned	
  by	
  banks).	
  Wand NSP3	
  grant	
  of	
  $16.0	
  million,	
  
the	
  program	
  is	
  turning	
  vacant	
  mulEfamily	
  properEes	
  into	
  very-­‐low	
  income	
  rental	
  housing	
  and	
  acquiring	
  and	
  
government jurisdictions received a total of $119.3 million in NSP1 funds, two
demolishing	
  homes	
  that	
  impose	
  safety	
  and	
  health	
  hazards.	
  These	
  laher	
  properEes	
  have	
  been	
  land	
  banked	
  for	
  future	
  
received $116.1 million in total NSP2 funds, ffordable	
  housing,	
  eliminate	
  blight,	
   nd	
  put	
  
redevelopment.	
  All	
  of	
  the	
  NSP3	
  acEviEes	
  will	
  provide	
  much-­‐needed	
  aand five received $29.5 amillion in total
NSP3 funds. ath	
  to	
  stabilizaEon.	
  	
  
neighborhoods	
  on	
  a	
  pApproximately 248 households have already benefited from NSP, and
	
   activities funded by the program are expected to provide assistance to an additional
•	
  The	
  City	
  of	
  Elgin	
  was	
  awarded	
  $2.2	
  million	
  in	
  NSP1	
  funds.	
  A	
  porEon	
  of	
  these	
  funds	
  has	
  been	
  used	
  to	
  rehabilitate	
  5	
  
1,823 homes	
  a and ity	
  is	
  working	
  with	
  Habitat	
   Examples of how these alley	
  to	
   have been
single-­‐family	
  ownernd	
  the	
  crenter households. for	
  Humanity	
  of	
  the	
  Northern	
  Fox	
  Vfunds complete	
  four	
   put to
addiEonal	
  homes.	
  	
  These	
  homes	
  are	
  both	
  affordable	
  and	
  in	
  close	
  proximity	
  to	
  such	
  resources	
  as	
  the	
  Hemmens	
  
use are provided below.
Cultural	
  Center,	
  Gail	
  Borden	
  Public	
  Library,	
  and	
  commuter	
  rail	
  lines.	
  	
  
	
  
•	
  L• 	 County,	
  ICityawarded	
  $4.6	
  million	
  under	
  NSP1	
  and	
  $1.4	
  million	
  under	
  Nto invest in strategically chosen
ake	
   The L	
  was	
   of Chicago’s NSP strategy has been SP3.	
  	
  Single-­‐family	
  foreclosed	
  
properEes	
  in	
  the	
  Waukegan,	
  Round	
  Lake,	
  Round	
  Lake	
  Beach,	
  and	
  Mundelein	
  areas	
  of	
  Lake	
  County,	
  have	
  been	
  
neighborhoods with additional investment support from local and national
purchased	
  and	
  rehabilitated	
  with	
  part	
  of	
  these	
  NSP	
  funds.	
  In	
  all	
  of	
  these	
  areas,	
  the	
  foreclosed	
  properEes	
  had	
  
partners. The city has formed a unique partnership with Mercy Portfolio
lowered	
  property	
  values	
  and	
  increased	
  rates	
  of	
  vandalism	
  and	
  crime.	
  	
  
Services (MPS), a major non-profit housing agency, to invest its NSP1 funds
	
  
•	
  In	
  Will	
  Cof $55.2 f	
  a	
  $5.2	
  million	
  grant	
  under	
  NSP1	
  has	
  gone	
  towards	
  a	
  program	
  designed	
  to	
  50 competitively
ounty,	
  part	
  o million through an extensive network of more than minimize	
  risk	
  to	
  
the	
  county	
  by	
  finding	
  a	
  buyer	
  before	
  a	
  foreclosed	
  or	
  abandoned	
  home	
  is	
  purchased	
  and	
  rehabilitated.	
  The	
  success	
  of	
  
selected developersy	
  andartnerships	
  the	
  county	
  has	
  developed	
  with	
  construcEon	
  ahas experienced
this	
  program	
  has	
  been	
  set	
  in	
  moEon	
  b the	
  p non-profit neighborhood entities. MPS nd	
  insurance	
  
management staff and protocols established for quickly purchasing and
companies,	
  realtors,	
  and	
  housing	
  counselors.	
  	
  
	
  
rehabilitating units to halt neighborhood deterioration. Mercy has been
	
  
successful at acquiring and renovating both single-family and multifamily units in
	
  
	
  
the city’s NSP1 target areas.
	
  
	
  
	
   • 	 With NSP2 funds of $98.0 million, the City of Chicago has tailored programs
	
  
to the local conditions of three neighborhood types to reverse the decline

caused by foreclosed and abandoned homes: a) communities prone to growth
and quick recovery, b) communities that can be stabilized around targeted
investment areas, and c) communities requiring consolidation to reduce the
negative impacts of blighted structures. The city’s goal is to reverse the decline
in home sales, lock in housing affordability for buyers and renters, and support
local economic development and job growth. The City of Chicago is a national
innovator in both the scale and intensity of this type of targeting.

Spotlight on Chicago MSA | Page 4

U.S Department of Housing and Urban Development
U.S. Department of the Treasury

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts to Stabilize the Housing Market andPolicy Development and Research | March 2012

• 	 Under NSP3, the City of Chicago has targeted areas where a modest investment can have a significant impact and act as a market stimulus.
The program has invested in such areas throughout the city, focusing on communities that have high shares of REO properties (foreclosed
properties still owned by banks). With an NSP3 grant of $16.0 million, the program is turning vacant multifamily properties into very-low income
rental housing and acquiring and demolishing homes that impose safety and health hazards. These latter properties have been land banked for
future redevelopment. All of the NSP3 activities will provide much-needed affordable housing, eliminate blight, and put neighborhoods on a path
to stabilization.
• 	 The City of Elgin was awarded $2.2 million in NSP1 funds. A portion of these funds have been used to rehabilitate 5 single-family homes and
the city is working with Habitat for Humanity of the Northern Fox Valley to complete four additional homes. These homes are both affordable and
in close proximity to such resources as the Hemmens Cultural Center, Gail Borden Public Library, and commuter rail lines.
• 	 Lake County, IL was awarded $4.6 million under NSP1 and $1.4 million under NSP3. Single-family foreclosed properties in the Waukegan,
Round Lake, Round Lake Beach, and Mundelein areas of Lake County, have been purchased and rehabilitated with part of these NSP funds. In all
of these areas, the foreclosed properties had lowered property values and increased rates of vandalism and crime.
• 	 In Will County, a portion of the county’s $5.2 million NSP1 grant has gone towards a program designed to minimize risk to the county by
finding a buyer before a foreclosed or abandoned home is purchased and rehabilitated. The success of this program has been set in motion by
the partnerships the county has developed with construction and insurance companies, realtors, and housing counselors.
As part of the State of Illinois’ housing recovery efforts, the Illinois Hardest Hit Fund program was launched in July 2011 to help Illinois
homeowners who have experienced a substantial decrease in income due to job loss or underemployment, by providing a mortgage payment
bridge while they seek new or better employment. The Illinois Hardest Hit Fund program is funded by a grant of more than $400 million from the
Administration’s Hardest Hit Fund and administered by the Illinois Housing Development Authority (IHDA).
Assistance is provided primarily through the Homeowner Emergency Loan Program (HELP), which provides up to 18 months of payments
(with a cap of $20,000 to $25,000) to the mortgage lender to assist unemployed and underemployed borrowers with their first mortgage until they
can resume full payments on their own. Homeowners who have recently become reemployed after a stretch of unemployment may also be eligible for
assistance to cure arrearages.
Homeowners must meet all eligibility requirements to be considered for the program. Homeowners experiencing a reduction in household income
must have a documented hardship due to unemployment or underemployment through no fault of their own. The homeowner’s household income
is reviewed to determine the level of assistance needed and the minimum mortgage payment that may be contributed by the borrower. Eligible
homeowners close on a zero percent interest rate subordinate loan similar to a home equity line of credit. The loan term is for ten years, and the loan
will be forgiven at a rate of 20 percent per year over the final five years.
To date, 188 mortgage servicers have agreed to participate in the Illinois Hardest-Hit Fund programs. Illinois homeowners who believe they may be
eligible for these programs should visit www.illinoishardesthit.org. Additionally, homeowners seeking additional assistance with their mortgage
can visit the website of the Illinois Foreclosure Prevention Network at www.keepyourhomeillinois.org.
IHDA is also offering assistance through the Mortgage Resolution Fund (MRF), which uses funds from the Hardest Hit Fund to purchase delinquent
loans in the Chicago area and modify those loans to affordable levels. The MRF is operated by Mercy Portfolio Services, a subsidiary of the national
nonprofit organization Mercy Housing, in partnership with Enterprise Community Partners, the Housing Partnership Network and the National
Community Stabilization Trust. This program does not take applications, and homeowners whose mortgages qualify for MRF will be contacted by
IHDA or the partners listed above.

Spotlight on Chicago MSA | Page 5


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