The Illinois Hardest Hit Program, which is funded through the Hardest Hit Fund, provides mortgage payment assistance for homeowners who are currently (or were previously) unemployed or underemployed. Keep reading to get an overview of the program, learn how much assistance is available, and find out if you are eligible.
(To learn about foreclosure procedures in Illinois, and programs to assist Illinois homeowners, visit our Illinois Foreclosure Law Center.)
Hardest Hit Fund
In 2010, the U.S. Department of the Treasury created the Hardest Hit Fund to provide targeted aid to homeowners in those states most affected by the housing market crash. As part of this program, $7.6 billion in aid was allocated to the 18 states, along with Washington, D.C., that experienced the most extreme home price declines and high unemployment rates as a result of the economic crisis.
(Learn more about the Hardest Hit Fund.)
Illinois was awarded over $445 million in funds through the Hardest Hit Fund to help eligible homeowners avoid foreclosure. (Learn more about the Illinois foreclosure process.) To do this, the state set up the Illinois Hardest Hit Program.
The Illinois Hardest Hit Program
The Illinois Hardest Hit program is designed to help homeowners who are currently experiencing an income loss or have experienced one in the past that caused them to fall behind on their mortgage payments. The two types of mortgage assistance available under the Illinois Hardest Hit Program are:
- the Reinstatement Assistance program, which is a one-time payment covering past-due mortgage payments, fees, and penalties in full, and
- the Monthly Mortgage Payment Assistance program, which pays monthly mortgage payments while the household makes a 31% monthly contribution payment during the participation period.
Homeowners are eligible to receive up to $35,000 or 18 months of assistance, whichever occurs first.
How the Illinois Hardest Hit Program Works
Assistance is provided in the form of a 10-year forgivable loan secured by a junior lien that is recorded against the property. The loan is forgiven on a monthly basis over the last five years of the loan term. This means that by the end of the 10-year loan term, the entire debt is forgiven.
You only need to repay the loan if you:
- sell your home at a profit
- transfer ownership of the home, or
- refinance during the loan term and take cash out.
To be eligible for the Illinois Hardest Hit Program, you must meet all of the below criteria.
- You have a documented income reduction of 20% due to unemployment or underemployment through no fault of your own. (If you were unemployed but have regained employment, you can still qualify for the program if you can document the required 20% reduction in income and meet all other eligibility requirements.)
- Your household income is no more than 120% of the area median income.
- You don’t have more than $17,500 in liquid assets (excluding retirement accounts).
Home Eligibility Criteria
Additionally, your existing mortgage and the property securing the mortgage must meet the below criteria.
- The property is in Illinois.
- The property is your primary and only residence. (This means you cannot own other investment or vacation properties.)
- The property is a single-family home, condominium, townhome, or one-to-two unit dwelling (so long as you live in one of the units).
- The principal loan balance does not exceed $500,000.
Mobile or manufactured homes are eligible if permanently affixed to real estate owned by the applicant. Learn more about what happens if you are struggling to pay your mobile home loan.
You are not eligible for the Illinois Hardest Hit Program if one of the below conditions applies to you.
- You have been convicted of a mortgage-related felony such as larceny, theft, fraud, forgery, money laundering, or tax evasion, within the last ten years.
- You have an interest-only or negative amortization loan. (Fixed rate and adjustable rate loans are the only eligible loan types.)
- Your county does not have enough Hardest Hit Fund assistance available to bring the mortgage arrearage current and make a minimum of six forward monthly mortgage payments.
Servicer participation in this program is voluntary. (A mortgage servicer is the company that collects monthly mortgage payments from borrowers on behalf of the owner of the loan, as well as tracks account balances, manages the escrow account, handles loss mitigation applications, and pursues foreclosure in the case of defaulted loans.)
After you apply, the Illinois Housing Development Authority (IHDA) will notify you if your lender is unwilling to participate or objects to a request to assist you once you have been approved for assistance.
How to Apply
Go to www.illinoishardesthit.org and click on “Apply Now” to begin the application process. Once you finish setting up your profile, you will need to complete the seven-step online application during which you must provide:
- homeowner information
- contact information
- property information
- lender information
- a financial worksheet
- a hardship letter, and
- various other required documents (such as bank statements, tax returns, pay stubs, etc.)
(To find out the exact documents you need, go to www.illinoishardesthit.org, then click on “About the Program,” and then “Required Documentation Checklist.”)
Once you complete your application, you will be assigned to an IHDA-approved non-profit housing agency (or you can choose one) that will pre-screen your application for eligibility and answer any questions. Your agency counselor will meet with you in-person or by phone to ensure that your application is complete and meets program requirements.
If you meet all program requirements, your counselor will submit your application to IHDA for review and underwriting. The review process can take up to 120 days.
Beware of Scams
The Illinois Hardest Hit program is free of charge and you should not pay for any services associated with applying for assistance. Do not pay any company that promises to expedite your application or guarantees approval.
If you feel you have become a victim of mortgage assistance fraud, send an email to firstname.lastname@example.org.
For More Information
If you would like more information about the Illinois Hardest Hit Program, you can call 855-873-7405 or fill out the contact form at www.illinoishardesthit.org/contact.
If you don't qualify for assistance from the Illinois Hardest Hit Program, you can go to www.keepyourhomeillinois.org or call 855-KEEP-411 (855-533-7411) to learn about other foreclosure avoidance programs that may be available to you.