Mayor Daley proposed an ordinance that would create a “Vacant Building TIF Purchase and Rehabilitation Program” to provide incentives to first-time homebuyers in the City.  The Program would provide TIF funds to homebuyers with total household incomes of less than 100% of the Primary Metropolitan Statistical Area Median Income (approximately $75,000 for fiscal 2010) to purchase and substantially rehabilitate eligible properties.  To qualify, a property must be vacant, require substantial rehabilitation, be located within one of Chicago’s approximately 150 TIF areas and contain not more than four dwelling units.  TIF funds would be available in amounts up to 25% of the sum of the purchase price plus the substantial rehabilitation costs.  The ordinance was introduced to the City Council on March 9^th, 2011 and has been referred to the Finance Committee.

To take advantage of the incentive, a homebuyer would have to submit an application to demonstrate eligibility, include a copy of an inspection report for the proposed property and any other information deemed necessary by the Commissioner of Housing and Economic Development.  After review of the application, the Commissioner would determine an applicant’s eligibility and the amount of assistance.  Under existing Illinois TIF law, both acquisition and substantial rehabilitation costs are TIF eligible costs.

Questions remain about how the proposed program would be administered.  It is likely that City approvals would need to be streamlined in order to meet the normal home buying time frame so that applicants are able to obtain conventional financing in addition to the TIF incentive.

Additionally, the terms of the ordinance require the homebuyer to occupy the property as a principal residence for a certain period of time (between five and fifteen consecutive years depending on the amount of assistance received).  How this occupancy requirement will be enforced is not addressed in the ordinance, however in commercial developments, the City often requires a TIF recipient to pay back all or a portion of the TIF funds received if the TIF recipient does not meet the occupancy requirement.

This would be the first time that TIF incentives would be targeted at homebuyers in the City of Chicago.

This entry was posted on Thursday, March 17th, 2011 at 9:46 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.