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PROPOSED RESOLUTION
PROPOSAL FOR ARPA FUNDING- MARKET RATE DOWN PAYMENT ASSISTANCE PROGRAM
WHEREAS, on March 11, 2021, the federal government authorized the American Rescue Plan Act of 2021 (“ARPA”) which includes $1.9 trillion in federal stimulus funds to hasten the United States’ recovery from the economic and health effects caused by the COVID-19 pandemic; and
WHEREAS, specifically, the federal government has authorized and allocated a federal award of approximately $1,000,372,385 of ARPA funding to Cook County to assist the County in its recovery from the economic and health effects of COVID-19; and
WHEREAS, on June 24, 2021, the Cook County American Rescue Plan Act Framework (the “ARPA Framework”) was presented to the Cook County Board of Commissioners; and
WHEREAS, the Cook County Board of Commissioners via Resolution 21-3654 accepted the ARPA federal award allocated to Cook County to assist the County in its recovery from the economic and health effects of COVID-19 in the amount of approximately $1,000,372,385.00; and
WHEREAS, Resolution 21-3654 further authorized the Cook County Budget Director and Comptroller to create and implement a Special Purpose Fund for the ARPA award and other accounting measures to track the acceptance and spending of the federal award; and
WHEREAS, the Cook County Board of Commissioners authorized the Chief Financial Officer, Budget Director, Chief Procurement Officer and applicable using agencies to issue grants, contracts and agreements for ARPA programs approved via Resolutions 22-3657 and 22-0637; and
WHEREAS, to further the Policy Roadmap Goals, the Bureau of Economic Development has developed a menu of programs to support economic recovery, inclusive of the development of affordable and supportive housing in the post COVID era, which have undergone review and approval through the Project Management Office process to utilize ARPA funding for such programs and initiatives pursuant to the issuance of grants, contracts, and loan agreements; and
WHEREAS, Resolutions 22-3657 and 22-0637 provided that any awards issued regarding ARPA programs in an amount over $1M shall require the approval of the Cook County Board of Commissioners; and
WHEREAS, the Board of Commissioners of Cook County (“the Board”) determined it to be advisable and in the best interests of the County, its residents, and its taxpayers that the County continue the promotion of economic development, affordable housing, and home ownership within the County; and
WHEREAS, the Board further determined it to be advisable and in the best interests of the County, its residents, and its taxpayers that the County initiate and administer a program through which qualified buyers of residences in the County might more easily obtain competitive fixed-rate 30-year mortgage loans coupled with assistance for down payments and closing costs, herein referred to as a Market Rate Down Payment Assistance Program (Market Rate DPA Program); and
WHEREAS, the Cook County Board of Commissioners via Resolution 16-1343, as amended, authorized the Market Rate DPA Program that has been in continuous operation, most recently amended via Resolution 24-2513 to create a direct homebuyer subsidy utilizing American Rescue Plan Act (ARPA) Funding in an amount of $3,000,000; and further amended via Resolution 25-2057 utilizing Corporate Funds in the amount of $8,579,599 to advance the Program; and
WHEREAS, the Department of Planning and Development is recommending funding an additional $2,000,000 in American Rescue Plan Act Funds (ARPA) to Stifel, Inc., to further fund Down Payment Assistance to prospective homebuyers; and.
WHEREAS, Stifel, Nicolaus & Company Incorporated (Stifel, Inc.) and Club 720 have been and will continue to be the County’s Program Co-Administrators representing both marketing and underwriting of the Down Payment Assistance program. Stifel, Inc., is a wealth management and investment banking firm providing services to individuals, institutions, corporations and municipalities, while Club 720 provides buyer assistance, training and support in the homebuying process. The Co-Administrators will contract with mortgage service provider(s) and mortgages bankers to provide multiple options of both services and products to homebuyers. The network is projected to continue to have more than twenty lenders in the overall Cook County market, including the City of Chicago; and
WHEREAS, Funds will be used to directly support homebuyers in Disproportionately Impacted Areas (DIA), HUD Qualified Census Tracts (QCT) and the general market with the latter supporting homebuyers with incomes less than 120% of Area Median Income. Buyers purchasing properties within the DIA and QCT will not have income limitations. All homebuyers must reside in the property as their primary residence.
WHEREAS, Homeowners will have two primary benefit options that may be used unilaterally or in combination to maximize benefit to the homeowner:
1. Using Down Payment Assistance to buy down the principal amount of their home mortgage
2. Using Down Payment funds to buy down the interest rate of the permanent mortgage
Down Payment Assistance awards will be evidenced by a subordinate mortgage on the property requiring buyer affordability provisions and primary residency through a five-year period. Subordinate mortgages may be partially satisfied or forgiven pro rata annually during the initial five-year period to allow immediate wealth accumulation and to not limit homebuyer mobility during the residency period; and
WHEREAS, Down Payment Assistance will be the least of five percent (5%) of home purchases or $25,000 to the extent it closes the homeownership gap of projected homeownership costs to 30% of Household Income.
NOW, THEREFORE, BE IT RESOLVED, that the Cook County Board of Commissioners hereby approves the allocation of $2,000,000 in ARPA funds to support homebuyer down payment assistance and authorizes the Director of Planning and Development to further amend the agreement with Co-Administrators Stifel, Inc., and Club 720, to administer the down payment assistance program over an additional two-year period to complete the subject funding and program.
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