The Chicago Department of Housing (DOH) proposes an ordinance to make amendments to the existing Building Neighborhoods and Affordable Homes (BNAH) program. Currently, the BNAH program encourages homebuyers to move into five targeted neighborhood areas: Englewood Square, North Lawndale, South Lawndale, Humboldt Park/Garfield Park and Woodlawn.

The program provides up to $60,000 in purchase assistance to buyers of single-family homes constructed under the City Lots for Working Families program. DOH proposes several amendments to City Council today, under guidance from Mayor Lori E. Lightfoot.

The ordinance includes the following changes to the BNAH program:

• Change from five targeted community areas to a city-wide area.
• Expand eligible properties to include any single-family home for sale (one to four units) in a City Council approved land sale redevelopment agreement; not limited to City Lots for Working Families development program.
• Increase funding authority from $5 million AHOF to $10 million ($5M AHOF and $5M CDBG).
• Increase homebuyers purchase grant assistance limits from $60K to $100K.
• Grants funded with CDBG will be limited to eligible household buyers at or below 80% AMI.
• Grants funded with AHOF will be limited to eligible household buyers at 81% AMI and below 140% AMI.

Grants will be provided to eligible buyers on a scale based on AMI and neighborhood residency:

The ordinance also includes the following changes:

• Changing the grant term to 10 years.
• Allowing grant proceeds to be used for any closing cost in connection to the purchase of the home.
• To Seller: (1) the difference between the sales price and the appraised value of the eligible property (the “property appraisal gap”); (ii) down-payment
• To Others: title Insurance, credit report, recording fees, appraisal costs, points, transfer stamps, water certification settlement fees, third party property inspection fees, first year’s pre-payment of mortgage insurance, pre-paid interest.
• And such other cost as approved by DOH at time of purchase.
• Cash out, or Cash to eligible participant is not permitted.
• Buyer’s equity: minimum of $1,000.00 downpayment.
• The Eligible Participant must be the name borrower on all other loans made in connection with the Eligible property during the term.
• Security: An Affordable Housing Covenant and Agreement, entered by the Eligible Participant and the City, will be recorded as a lien against the Eligible Property at time of sale, to run for the term of the grant.
• Priority of lien: The lien of the Affordable Housing Covenant and Agreement shall be (i) junior to the senior purchase mortgage, and (ii) senior to the second junior mortgage required under the City Lots for Working Families program or City’s land write down.
• Re-subordination: Permitted, only to any replacement senior purchase mortgage undertaken by the Eligible Participant during the term.

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