Faced with the rising cost of rent, many Americans recognize that homeownership brings financial stability and can be a major driver for long-term wealth building. However, as home prices continue to rise and interest rates remain persistently high, many are finding it increasingly difficult to fathom their future as homeowners. Especially across the Chicagoland area, underserved communities face increased challenges in today’s housing market, with limited access to mortgage funding, down payment assistance, and financial literacy posing significant barriers to potential homebuyers.
As a housing and community development leader, the Federal Home Loan Bank of Chicago (FHLBank Chicago) recognizes the importance of a holistic approach to community health and homeownership. While increasing the number of affordable owner-occupied units is an important factor, providing additional resources to underserved communities is also critical to the success of communities.
One component of FHLBank Chicago’s holistic approach is its Community First® Housing Counseling Resource Program (HCRP), which provides grants to HUD-certified housing counseling agencies across Illinois in partnership with the Illinois Housing Development Authority (IHDA). With this funding, counseling agencies provide support and resources to underserved individuals as they navigate the complex homebuying process. Housing counseling is especially crucial for individuals and households who are first-generation homebuyers. This type of knowledge is often taken for granted but is essential to help individuals become and remain homeowners.
“Homebuyer education and counseling is a critical component in the home buying process,” says Katie Naftzger, Senior Vice President and Community Investment Officer at FHLBank Chicago. “Education empowers individuals to navigate the complexities of homeownership. Our approach is not just about immediate results; it’s about ensuring sustainable homeownership for generations to come.”
For example, Angela and Luis, a couple who arrived in the United States from Colombia in 2020, were discouraged by increasing rental costs and dreamed of owning a home. To make their dream a reality, Angela and Luis enrolled in a homebuyer education online class and sought guidance from the Consumer Credit Counseling Services (CCCS), a beneficiary organization of the HCRP.
Through learning skills like credit management, debt handling, and establishing savings, Angela and Luis were better equipped to navigate buying their first home. After these courses, the couple was paired with a counseling agent who guided them through the entire process.
“It was a little intimidating since this is something that we were not very familiar with, so we were very attentive,” said Angela on the challenges of previously not having a credit history. “We were able to take the course, review the information, and understand the importance and level of responsibility required to have credit here in the United States. In the end, we were successful and approved!”
Then, to assist in the next step of the process, FHLBank Chicago member Midland States Bank provided Angela and Luis with downpayment assistance through the Downpayment Plus® (DPP®) program. This $10,000 grant, coupled with the educational and counseling support from CCCS, enabled Angela and Luis to secure their dream home in Elgin, Illinois, in September 2023.
The impact of the HCRP extends far beyond Angela and Luis. In 2023 alone, FHLBank Chicago’s funding supported housing counseling agencies across Illinois in providing nearly 19,000 individuals and families with homeownership education and counseling and served more than 1,250 in purchasing a home.
Making homeownership accessible for more people like Angela and Luis requires dedicated community collaboration from financial institutions, housing counseling agencies, and other supportive organizations. FHLBank Chicago is proud to take part in this mission through various programs like HCRP and DPP. This holistic strategy underscores their commitment to fostering community growth through financial literacy and sustainable homeownership, thereby transforming dreams into reality for generations to come.
To learn more about the impact of FHLBank Chicago’s programs and their impact, read the 2023 Impact Report at fhlbc.com/impact.