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PROPOSED RESOLUTION
PROPOSAL FOR ARPA FUNDING-HOMEBUYER 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 Department of Planning and Development within the Bureau of Economic Development was designated the lead for ARPA Initiative NT093: Mortgage Assistance, a $16,000,000.00 initiative geared toward offsetting the inflationary pressures on housing prices, home mortgage interest rates, new home supply deficiencies and further offsetting marginalized appreciation and equity gains of families within Qualified Census Tracts and Disproportionately Impacted Areas under the COVID pandemic.
WHEREAS, the Department of Planning and Development is recommending funding $3,000,000 in American Rescue Plan Act Funds (ARPA) to Stifel, Inc., to fund Down Payment Assistance Funding to prospective homebuyers.
WHEREAS, Stifel, Nicolaus & Company Incorporated (Stifel, Inc.) will be the County’s representative both marketing and underwriting the down payment assistance program. Stifel, Inc., is a wealth management and investment banking firm providing services to individuals, institutions, corporations and municipalities. Stifel, Inc., will contract with a mortgage service provider and subordinate 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 Cook County market, including the City of Chicago.
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.
WHEREAS, Down Payment Assistance will be the lesser of five percent (5%) of home purchases or $25,000 to the extent it closes the homeownership gap of projected homeownership costs at 30% of Household Income.
NOW, THEREFORE, BE IT RESOLVED, that the Cook County Board of Commissioners hereby approves the allocation of ARPA funds to support homebuyer down payment assistance and authorizes the Director of Planning and Development to further negotiate required evidentiary documents to enter into agreement with Stifel, Inc., to administer the down payment assistance program.
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