Your 2nd Chance – Modular Homes
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Federal Housing Grant Programs
Block Grant Programs
HUD administers block grant programs, which provide flexible resources that help fund affordable
rental and homeownership activities as well as economic development and neighborhood revitalization.
HUD uses a formula to allocate funds for each program to large cities and urban counties, as well as to
states, which can distribute the federal grant funds to jurisdictions that do not receive money directly. To
be eligible for these and other grant programs, jurisdictions are required to submit a “Consolidated
Plan” that details the local housing needs of low- and moderate-income residents, as well as proposed
strategies and local resources that may be brought to bear to meet those needs.
Home Grant Programs
The HOME Investment Partnerships Program, commonly referred to as HOME, is a federal block grant
program administered by HUD that distributes approximately $1 billion each year to states and
participating localities. In 2010, HOME received $2 billion in funding, the highest amount ever received
by the program. Since then, the program’s funding has been cut by 50 percent. HOME funds may only be
used for activities that provide affordable housing for low-income households. While HOME funds are
limited to affordable housing activities, the range of eligible uses that meet this requirement includes a
variety of strategies.
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HOME funds flow directly from HUD to larger cities and counties and to states. Smaller localities are
eligible to receive HOME funds indirectly by applying to their state. The program comes with a
matching requirement under which communities receiving HOME funds must match every dollar of
HOME funds with 25 cents of local resources. This matching requirement may be met either with cash
or in-kind contributions.
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How can HOME funds be used?
The eligible uses of HOME funds encompass a broad range of activities, including but not limited to:
1. Home purchase or rehabilitation financing assistance.
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2. Construction or rehabilitation of housing for rent or ownership and related expenses, including
site acquisition, demolition of dilapidated homes to make way for a HOME-assisted development
and relocation assistance.
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3. Tenant-based rental assistance (assistance expires after two years, unless renewed).
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4. Program planning and administration.
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In all cases, affordability of a home must be maintained for at least 20 years for new construction and
5 to 15 years for acquisition and/or rehabilitation, depending on the award amount.
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While the possible applications of funds are numerous, limits apply to the incomes of families receiving
assistance. In general, rental projects that receive HOME funds must benefit households with incomes
below 60 percent of the area median income (AMI), while assistance related to homeownership must be
used for households with incomes below 80 percent of AMI. Additional income restrictions apply
depending on specific project details. This is a general summary of complex income eligibility and
targeting rules.
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Who administers the HOME program?
The HOME program was authorized by Congress in 1990 under Title II of the Cranston-Gonzalez
National Affordable Housing Act, and is administered by HUD’s Office of Community Planning and
Development. Local eligibility for direct assistance as a participating jurisdiction (PJ) is determined
by a formula that incorporates measures of poverty and housing conditions.
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Overall, 60 percent of funds go directly to localities, and 40 percent of HOME dollars go to states. A
formula is used to determine individual allocations to PJs and states, with certain minimums. (States
receive a minimum of $3 million annually, while local PJs are normally guaranteed at least $500,000 per
year.) In addition, 15 percent of a PJ’s funds must be used for homes that are developed, sponsored or
owned by a nonprofit designated as a “community-based housing development organization.”
Community Development Block Grant (CDBG)
The Community Development Block Grant (CDBG) program provides annual grants on a formula basis
to be used for a wide range of community development activities directed toward neighborhood
revitalization, economic development, affordable housing and improved community facilities and
services. Local and state governments choose how to deploy CDBG funds based on their communities’
needs. According to HUD, in fiscal year 2014, CDBG was used to help meet the housing needs of more
than 85,800 households nationwide through initiatives offering home rehabilitation assistance and
other housing programs.
Housing Opportunities for People with AIDS (HOPWA) grants
Like CDBG, Housing Opportunities for People with AIDS (HOPWA) is not strictly a housing program.
Funds may be used for health care, case management and other supportive services for people with
HIV/AIDS, in addition to covering the costs associated with the acquisition and rehabilitation or
development of housing. Funds may also be used to provide rental assistance and, on a short- term basis,
prevent homelessness among individuals diagnosed with HIV or AIDS. HOPWA also sets aside a limited
amount of funding to be awarded on a competitive basis to jurisdictions in addition to the formula
allocations.
National Housing Trust Fund
The National Housing Trust Fund (NHTF) was authorized by Congress in 2008, and is intended to
provide a dedicated source of funding for the preservation and production of new homes for extremely
low-income families. (Ten percent of funds may be used for activities that support first-time
homebuyers, including down payment and closing cost assistance.) The NHTF was initially slated to be
funded with a share of Freddie Mac and Fannie Mae’s new business; in 2015, the Federal Housing
Finance Agency decided to begin funding NHTF, and states will receive funds for the first time in 2016.
While the goal is for NHTF to provide $1 billion in annual affordable housing funding, these first initial
years are expected to be smaller allocations, with $174 million allocated for fiscal year 2016.
Capital Magnet Fund
The Capital Magnet Fund was authorized by Congress in 2008. The Department of Treasury, through
the Community Development Financial Institutions (CDFI) Fund, administers the program, providing
competitively awarded grants to CDFIs and qualified nonprofit housing organizations. The Capital
Magnet Fund can support affordable housing, economic development and community service facilities.
Awardees are required to produce housing and community development investments at least 10 times
the size of the award amount. The program was initially slated to be funded with a share of Freddie Mac
and Fannie Mae’s new business and received a direct appropriation of $80 million from Congress in
2010. In 2016, the Federal Housing Finance Agency decided to begin funding the National Housing Trust
Fund and the Capital Magnet Fund.
Neighborhood Stabilization Program
To help states and localities stabilize neighborhoods impacted by the foreclosure crisis of 2007-2010,
Congress funded the Neighborhood Stabilization Program (NSP). The initial round of NSP funding,
known as NSP1, was authorized by the Housing and Economic Recovery Act (HERA) of 2008. NSP1
provided $3.92 billion in grants to states and selected localities based on a formula that allocated more
funding to communities that had been greatly impacted by foreclosures. Eligible activities included:
* Establishment of financing mechanisms to facilitate the purchase and redevelopment of foreclosed
homes.
* Direct purchase and rehabilitation of abandoned and foreclosed homes for resale, rent or
redevelopment.
* Establishment of land banks for foreclosed homes; and
* Demolition of blighted structures.
In 2009, the American Recovery and Reinvestment Act (ARRA) established two additional rounds of
NSP funding, known as NSP2 and NSP-TA. NSP2 provided $1.93 billion in competitive grants to states,
localities and nonprofit organizations, while NSP-TA provided $50 million on a competitive basis to
organizations that provide technical assistance to NSP grantees. Congress funded a third round of NSP
in 2010 as part of the Dodd-Frank Wall Street Reform Act. Both NSP-1 and NSP-3 were by formula
allocation. The program has not received additional funding since 2010, although some grantees
continue activities by recycling program income on a limited scale.
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Additional resources on HUD programs:
The National Low Income Housing Coalition’s Advocates’ Guide includes a thorough description of HUD
programs and acts as a resource for advocating in support of these programs.
Next SectionFederal Rural Housing Programs
The Chicago Grant Programs
BNAH
BNAH
The Building Neighborhoods and Affordable Homes Program (BNAH) provides grants to qualifying
buyers to assist in their purchase of primary, owner-occupied residences that are newly constructed
single-family residential buildings, containing no more than four dwelling units, built pursuant to a City
of Chicago Land Sale Redevelopment Agreement or a City Lots for Working Families Agreement. The
program provides up to $100,000 in purchase price assistance to qualifying buyers.
See below Numbers:
Neighborhood Residents Income Limit
Grant Amount
Non-Neighborhood Area Residents Income Limits:
Grant Amount
Below 80% of AMI
$100,000
Below 80% of AMI
$90,000
81 – 90% of AMI
$90,000
81 – 90% of AMI
$80,000
91 – 100% of AMI
$80,000
91 – 100% of AMI
$70,000
101 – 120% of AMI
$70,000
101 – 120% of AMI
$60,000
121 – 140% of AMI
$60,000
121 – 140% of AMI
$50,000
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The following documents are required to be uploaded within the online BNAH application:
1. Required Documentation
2. Original City of Chicago Home Buyer Application (original signed and dated)
3. Mortgage pre-approval / Commitment Letter or 1st lender’s assumption approval letter
4. Copy of Driver’s License or State ID for program applicant(s) – front & back
5. Affidavit of Child Support Compliance (original signed, dated & notarized)
6. Economic of Disclosure Statement (original signed, dated & notarized)
7. Proof of Income
Chicago Homegrown Grant
Grant Program Information
What is the HomeGrown Purchase Assistance Grant Program?
The HomeGrown Grant is a financial assistance program funded by the City of Chicago Department
of Housing (DOH) to help eligible homebuyers purchase homes in the City of Chicago by providing
financial assistance for:
1. Down Payment
2. Closing Costs
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Who Administers the Program
The program is administered by two (2) Community Development Financial Institutions (CDFIs):
1. Neighborhood Lending Services, Inc. (NLS)
2.TRP Lending LLC (TRP)
These organizations handle applications, eligibility reviews, and grant disbursement.
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Who administers the program?
The program is administered by two (2) Community Development Financial Institutions (CDFIs):
1. Neighborhood Lending Services, Inc. (NLS)
2.TRP Lending LLC (TRP)
These organizations handle applications, eligibility reviews, and grant disbursement.
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What is the goal of the program?
The program aims to:
1. Help families build equity through homeownership
2. Expand access to affordable housing
3. Support long-term and generational wealth creation Grant Details
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Is this a purchase price assistance program? If so, how much financial
assistance is available?
Yes. The HomeGrown grant is to provide a subsidy for the purchase of an eligible property
in the City of Chicago.
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Grant amounts depend on gross household income and property location:
1. Zone A: Up to $70,000
2. Zone B: Up to $50,000
The grant cannot exceed 25% of the home’s purchase price.
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What are Zone A and Zone B?
1. Zone A: Higher-cost areas with rising home prices
2. Zone B: Lower-income census tracts
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How do I determine a property’s zone?
To determine a property’s zone, applicants should work with their CDFI administrator (NLS or TRP) to
confirm the eligibility location. You can visit Chicago.gov/HomeGrown – enter the property address into
the Zone Lookup Tool and the tool will identify whether the property is located in Zone A or Zone B. You
can also use the FFIEC Geocoding System to identify the property’s census tract and compare it to the
official list.
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What can the HomeGrown grant be used for?
1. Down payment assistance
2. Closing cost.
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What is NOT allowed?
Grant funds cannot be used for:
1. Furnishings or appliances
2. Interest rate buy-downs (temporary or permanent)
3. Appraisal gap coverage
4. Private Mortgage Insurance (PMI)
5. New construction homes tied to City programs → If the home is part of programs like City Lots for
Working Families or new construction homes built pursuant to a City of Chicago Land Sale
Redevelopment Agreement
6. Ground-up new construction – develop or construct a newly built home.
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Eligibility Requirements
Who is eligible?
1. Applicants must meet all of the following criteria:
2. Household Income: Household gross income must be within program limits.
3. Location: Purchase a home located in the City of Chicago.
4. Primary Residence: The home must be used as the applicant’s primary residence.
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What are the income limit restrictions?
1. Zone A: Up to 120% of Area Median Income (AMI)
2. Zone B: Up to 150% of Area Median Income (AMI)
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What are the mortgage requirements?
You must:
1. Obtain a fixed-rate mortgage
2. Meet a maximum (back-end) debt-to-income ratio of 38%
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Mortgage transactions not allowed:
1. Adjustable-rate mortgages (ARMs)
2. Interest-only loans
3. Cash only purchase transactions
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Does the HomeGrown grant accept co-signers?
No. The program does not allow co-signers. The individual obtaining the mortgage must
apply for the HomeGrown grant and reside in the home as their primary residence for five (5) years.
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Are there participating lenders that I must work with to obtain the HomeGrown grant?
No, there is no official list of participating or preferred lenders. Buyers should work with a credible
lender of their choice to secure the primary mortgage loan required to purchase the property .
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Can I apply if I am not a Chicago resident?
Yes, you may apply if you are relocating to Chicago and will occupy the home as your primary residence.
The unit must be your primary residence; non-resident or investment properties are not eligible .
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Is a down payment required?
Yes. Buyers must contribute at least 1% of the purchase price from personal funds.
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Can additional down payment assistance programs be layered with the HomeGrown grant?
Yes. The HomeGrown grant can be combined with other down payment assistance programs, as long
as the HomeGrown Recapture Agreement remains in a permitted lien position on the property. In
most cases, the Recapture Agreement must be recorded in second lien position. However, if the
transaction includes both a first and second mortgage, the Recapture Agreement may be recorded
in third lien position and still remain eligible. The Recapture Agreement cannot be recorded in fourth
lien position or lower.
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Please note: BOND-funded programs cannot be layered with the HomeGrown grant. This includes, but is
not limited to, IHDA subsidy programs and the TaxSmart Mortgage Credit Certificate (MCC) Program.
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Will I have to provide my household income each year?
No. After closing, you will not need to provide income information. However, you will be monitored
for the five (5) year term of the grant to ensure that the home remains your primary residence .
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Do I need homebuyer education?
Yes. You must complete 6–8 hours of training through a HUD-approved counseling agency (no self-
paced online courses).
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Additional training may be required for:
1. Condos
2. Condominium Training through a HUD-approved counseling agency
3. Two-unit properties
4. Landlord or Property Management Training through a HUD-approved counseling agency
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Can I apply if I am a current homeowner?
No. Current homeowners are not eligible for the HomeGrown program, even if you do not live
in your existing property. At time of purchase, you cannot own:
1. Another home
2. Investment property
3. Vacation property
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Will I be able to refinance in the future?
Yes. Refinancing during the five (5) year term is permitted solely for the purpose of improving
loan terms – such as reducing the interest rate or adjusting the loan structure/terms. Refinances
that provide cash back or take the form of a home equity line of credit (HELOC) are not permitted.
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All refinances, including any subordination requests, must be submitted to your associated CDFI
administrator (NLS or TRP) for review and approval during the term of the grant.
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Do you need to be debt-free with the City?
Yes — but with some flexibility.
To move forward, the City of Chicago requires a Scofflaw check, which looks for unpaid city debts like:
1. Parking tickets
2. Red light or speed camera tickets
3. Other municipal fines or fees
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If you have outstanding debt:
You are not automatically disqualified, but you must fix it before closing:
You have two options:
1. Pay the debt in full, OR
2. Set up a payment plan
What proof you’ll need:
Before you can get a “clear to close,” you must show:
If paid in full:
1. Copy of receipt confirming the balance is paid off
2. If on a payment plan:
3. Copy of receipt showing your first payment
4. A copy of the payment plan agreement
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Property Eligibility
What types of properties are eligible?
1. Single-family homes
2. Condominiums
3. Townhomes
4. Two-unit properties
Not Eligible Property Types
1. 3- or 4-unit buildings
2. Only smaller properties (single-family homes, condominiums, townhomes and 2-units) qualify.
Larger multi-unit buildings are excluded.
3. Certain new construction homes tied to City programs
4. If the home is part of programs like City Lots for Working Families or has been built pursuant to
a City of Chicago Land Sale Redevelopment Agreement
5. Properties purchased through City of Chicago land sale programs
6. Homes or land acquired via special city-run sales programs are excluded, likely due to existing
affordability or resale rules.
7. Ground-up new construction, You can’t use the program to build a brand-new home from scratch —
it’s limited to existing homes or new construction purchases that are move in ready.
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Are purchases with rehab properties allowed?
Yes, if:
1. Total rehab costs cannot exceed $50,000
2. Rehab costs cannot exceed 20% of purchase price
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Application Process
How do I apply?
1. What documents are required? Typical documents include:
2. Application form
3. Household Income verification
4. ID for each applicant
5. Mortgage pre-approval letter
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How long does it take to process an application?
Typically, 5–10 business days after all required documents are submitted.
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What happens after I apply?
1. Approved: Receive a Conditional Commitment Letter
2. Denied: Receive a denial letter with explanation
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What if the program runs out of funds?
1. Applicants may be placed on a waitlist
2. Funding is first-come, first-served
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Closing & Funding
How long do I have to close?
1. 90 days from approval
2. One 30-day extension may be granted
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When are grant funds provided?
Funds are wired to the title company and applied at closing.
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Can I receive cash back at closing?
No. Cash back is not allowed under any circumstances. Any excess funds must be applied toward
the principal balance of the mortgage loan.
Post-Closing Requirements
Do I have to live in the home?
Yes. The home must be your primary residence for 5 years.
Is there ongoing compliance?
Yes. You must submit a Residency Certification Affidavit annually.
Grant Repayment (Recapture)
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Do I have to repay the grant?
No, repayment is not required as long as you meet all program requirements for a period of five (5) years.
This includes maintaining the home as your primary residence and not leasing or renting the property,
transferring ownership, or taking out a cash-out refinance or home equity line of credit (HELOC).
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When is repayment required?
Repayment (recapture) is triggered if you:
Sell the home
Transfer ownership
Refinance with cash-out
Move out or lease the unit
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How is repayment calculated?
The grant is forgiven monthly for over 60 months (5 years).
Each month, 1/60th of the total grant is forgiven.
If repayment is triggered before the 5-year period ends, the remaining balance must be repaid in
full to the City of Chicago.
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Additional Questions
Can City employees apply?
Yes, City of Chicago employees may apply, if they qualify.
Are there conflict-of-interest rules?
Yes. Applicants must disclose relationships with program administrators using a Homebuyer Affidavit
Disclosure Statement (HADS).
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Who can I contact for help?
Contact your assigned CDFI that you are working with or intend to work with. Please note, homebuyers
are only permitted to work with one (1) agency, not both. Neighborhood Lending Services, Inc.
TRP Lending LLC.
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