A local arm of the congressionally chartered Neighborhood Reinvestment Corp. is opening a homeownership center today in Chicago. The nonprofit group said in a report that more than 53,000 renters there could qualify for low-down-payment mortgages.
The NeighborWorks Homeownership Center will provide a "full cycle" of services, said Bruce Gottschall, executive director for Neighborhood Housing Services of Chicago Inc., a group that trains families to become homeowners.
The center will offer "the education and preparation up front and the avenues to good financing methods," he said. It will also maintain ongoing relationships to help people stay in their homes, he added. The center opens as Fannie Mae and Freddie Mac-the major buyers of loans on the secondary markets-are offering low-down-payment options to broaden homeownership.
Neighborhood Reinvestment Corp. works to improve housing and access to homeownership opportunities for low- and moderate-income homebuyers. Last year Neighborhood Housing Services of Chicago helped almost 350 families buy their first homes, according to the report. The new center is one of 17 that will open nationwide with the assistance of Neighborhood Reinvestment Corp.
The public corporation found that 85,000 Chicago families that rent could in fact afford to buy homes. Sixty-two percent of those families, 53,000 in all, make less than the local median income, the study found.
Though these renters have the credit histories and savings to buy first homes, there are not enough affordable houses for sale in Chicago, the study found. No more than 10% of the 120,000 owner-occupied affordable houses in Chicago are on the market in a given year.
Homeownership rates are less than 25% in the city's urban centers. That contrasts sharply with communities on the Chicago's periphery, where the rate exceeds 70%, the study found. Discrimination, less household wealth, and a lack of quality affordable houses contribute to this disparity, the study said.
Households with below-median incomes are among the fastest-growing demographic groups in the mortgage market, according to the study. It estimated that $4.9 billion in home sales revenue would be generated if the 53,000 Chicago families bought homes.