The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Chicago MSA | Page 1

Spotlight on the Housing 

Market in Chicago-JolietNaperville, IL-IN-WI 

The Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area (Chicago) is located along the western and southern coastlines of Lake Michigan 

and includes 14 counties in 3 states: Cook (includes City of Chicago), DeKalb, and six other counties in Illinois; Lake (includes City of Gary), and 

three other counties in Indiana; and Kenosha County in Wisconsin. The challenges in the diverse Chicago housing market have been more severe 

than those in most areas of the nation. During the early part of the last decade, local home prices grew at a slower pace than the national average; 

however, prices have since fallen by a greater percentage than in the nation as a whole. Declining property values in Chicago were fueled in part 

by excess housing construction in the years prior to the crisis, but also by rising defaults driven first by unsustainable mortgages then by the economic 

downturn and climbing unemployment. The foreclosure crisis in Chicago also came at the end of a significant uptick in suburban poverty rates. While 

the city’s low-income population remained basically flat during this time, the low-income population in surrounding Cook County increased by 7.4 

percent. Other suburban areas saw increases by more than 50 percent. Economic conditions in Chicago are starting to improve, but the local housing 

market remains fragile - with high concentrations of distressed mortgages (those 90 or more days delinquent or in foreclosure), large numbers of 

vacant homes, and many severely underwater mortgages. Contributing to the high share of distressed mortgages is a longer than average foreclosure 

processing time in Illinois (averaging 575 days) which keeps those homes in the foreclosure pipeline longer. However, the Administration’s broad 

approach to stabilize the housing market has been a real help to homeowners in Chicago and surrounding cities. This addendum to the Obama 

Administration’s Housing Scorecard provides a summary of trends and conditions in the local economy and the impact of the Administration’s efforts to 

stabilize the housing market and help local homeowners.

Population Growth, Employment, and Housing Market: 

With 9.46 million people according to the most recent Census, the Chicago MSA is the third largest in the nation. From 2000 to 2010, population 

growth was slow, increasing at an average rate of just 0.4 percent per year. Natural population growth (births minus deaths) accounted for all of 

that increase, as an average of 36,300 more people moved out of the Chicago MSA each year than moved in. In Cook County, the population 

declined by an average of 18,200 people, or 0.3 percent, annually. During the decade spanned by the Census, new housing production exceeded 

household growth in the Chicago MSA; net annual housing unit growth at 1.0 percent was approximately twice the corresponding population and 

household growth rates. This excess construction contributed to an oversupply of housing and led to steeper price declines after the housing bubble 

burst. According to the Census Bureau, the number of vacant units in Chicago increased by an average of 13,900 units, or 7.7 percent annually 

during the 2000s, almost twice the national rate during the same period. Unlike in other parts of the nation where investor speculation was a major 

cause of overbuilding prior to the crisis, investor home purchases in Chicago represented a relatively small share of total purchases. Specifically, from 

the first half of 2000 to the first half of 2006, home sales to investors in the Chicago-Joliet-Naperville Metropolitan Division rose from 5 to 10 percent 

of all sales, while the corresponding increase for the nation was 7 to 16 percent. Speculative construction of inner city condominium units occurred in 

Chicago, and these units did not sell to owner occupants or to investors, contributing to the overbuilding.

Chicago Housing Unit Growth Outpaced Population and Household Growth During the Past Decade

Date of Census 4/1/2000 4/1/2010

Chicago Population 9,098,970 9,461,105 

Annual Growth Rate - 0.4%

Chicago Households 3,280,055 3,475,726 

Annual Growth Rate - 0.6%

Chicago Housing Units 3,462,197 3,797,247 

Annual Growth Rate - 1.0%

Source: Census Bureau (2000 and 2010 Decennial)
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Chicago MSA | Page 2

Economic conditions in Chicago are showing strong signs 

of improvement. Although the local economy expanded 

by an average of 42,700 jobs per year, representing a 

1 percent pace of growth during the 4 year period from 

the second quarter of 2004 through the first quarter of 

2008, job losses were significant as a result of the recent 

recession. During the two year period from the second 

quarter of 2008 through the first quarter of 2010, the 

region averaged 165,500 jobs lost, or 3.6 percent- per 

year. A modest recovery has been underway since, with 

annual job gains averaging 26,700, or 0.6 percent. 

The professional and business services, construction, and 

wholesale trade sectors have been the major contributors 

to job growth during 2010 and 2011, increasing jobs by 

a combined total of 40,700 per year. Offsetting job gains 

during this same period were declines in the government 

and information sectors, with average annual losses of 

6,500 and 3,400 jobs, respectively. Compared to the 

national unemployment rate -- which peaked in October 

2009 at 10.0 and fell to 8.5 by December 2011 -- the 

unemployment rate for the Chicago MSA remains high, but 

has improved from a high of 11.1 in January 2010 to 10.0 

percent in December 2011. 

Home sales in the Chicago MSA remain at low levels. 

Existing home sales began a steep decline in 2006, 

but have leveled off since 2008. New home sales have 

been falling since 2005 but leveled off by 2009. Sales 

of bank-owned properties and short sales remain high at 

35 percent of existing home sales in the Chicago market 

compared to 29 percent nationally, which contributes to 

continued weakness in Chicago home prices. During the 

bubble years, a relatively sluggish economy and slow 

population growth kept Chicago home price increases 

lower than national rates. The CoreLogic repeat-sales house 

price index (HPI) shows that the rise in home prices in the 

Chicago-Joliet-Naperville, IL Metropolitan Division was 

less than two-thirds the national pace between 2000 and 

mid-2006. From their peak in 2006 to the end of the house 

price bubble in April 2009, home prices fell by 23 percent 

in Chicago, about three-quarters of the national average 

peak-to-low decline of 31 percent. However, Chicago home 

prices have continued to fall - an additional 14 percent 

from their peak in 2006 - compared to an additional 3 

percent decline for national sales prices. 

The Chicago rental housing market remains strong. Rental 

vacancy rates in Chicago have historically been lower than 

the national average, but according to Reis Inc., the overall 

apartment vacancy rate in Chicago was just 4.6 percent in 

the fourth quarter of 2011, down from 5.6 percent a year 

earlier and well below the current national average of 5.2 

percent. During the fourth quarter of 2011, average rents 

in Chicago increased by 2 percent from a year ago to 

$1,086. The average rent nationwide also increased by 2 

percent to $1,064 during the same period. 

**Zip code areas used for neighborhoods

Spotlight on the Housing Market in Chicago-Joliet-Naperville, Illinois-Indiana-Wisconsin

n	
  the	
  Chicago	
  MSA	
  remain	
  at	
  low	
  levels.	
  	
  ExisSng	
  home	
  sales	
  began	
  a	
  steep	
  decline	
  in	
  2006,	
  but	
  

off	
  since	
  2008.	
  	
  New	
  home	
  sales	
  have	
  been	
  falling	
  since	
  2005,	
  with	
  sales	
  leveling	
  off	
  since	
  2009.	
  

-­‐owned	
  properSes	
  and	
  short	
  sales	
  remain	
  high	
  at	
  35	
  percent	
  of	
  exisSng	
  home	
  sales	
  in	
  the	
  

ket	
  compared	
  to	
  a	
  naSonal	
  rate	
  of	
  29	
  percent.	
  This	
  high	
  level	
  of	
  distressed	
  sales	
  contributes	
  to	
  

eakness	
  in	
  Chicago	
  home	
  prices.	
  	
  ReflecSng	
  a	
  relaSvely	
  sluggish	
  economy	
  and	
  slow	
  populaSon	
  

ago	
  home	
  price	
  increases	
  during	
  the	
  house	
  price	
  bubble	
  were	
  lower	
  than	
  naSonal	
  rates.	
  The	
  

peat-­‐sales	
  house	
  price	
  index	
  (HPI)	
  shows	
  that	
  the	
  rise	
  in	
  home	
  prices	
  in	
  the	
  Chicago-­‐Joliet-­‐

	
  Metropolitan	
  Division	
  was	
  less	
  than	
  two-­‐thirds	
  the	
  naSonal	
  pace	
  between	
  2000	
  and	
  mid-­‐2006.	
  

eak	
  in	
  2006	
  to	
  the	
  end	
  of	
  the	
  house	
  price	
  bubble	
  in	
  April	
  2009,	
  home	
  prices	
  fell	
  by	
  23	
  percent	
  in	
  

ut	
  three-­‐quarters	
  of	
  the	
  naSonal	
  average	
  peak-­‐to-­‐low	
  decline	
  of	
  31	
  percent.	
  	
  However,	
  Chicago	
  

have	
  conSnued	
  to	
  fall	
  -­‐	
  an	
  addiSonal	
  14	
  percent	
  from	
  their	
  peak	
  in	
  2006	
  -­‐	
  compared	
  to	
  an	
  

percent	
  decline	
  for	
  naSonal	
  sales	
  prices.	
  	
  

rental	
  housing	
  market	
  remains	
  strong.	
  Rental	
  vacancy	
  rates	
  in	
  Chicago	
  have	
  historically	
  been	
  

he	
  naSonal	
  average.	
  According	
  to	
  Reis	
  Inc.,	
  the	
  overall	
  apartment	
  vacancy	
  rate	
  in	
  Chicago	
  was	
  4.6	
  

e	
  fourth	
  quarter	
  of	
  2011,	
  down	
  from	
  5.6	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  current	
  naSonal	
  

2	
  percent.	
  	
  During	
  the	
  fourth	
  quarter	
  of	
  2011,	
  average	
  rents	
  in	
  Chicago	
  increased	
  by	
  2	
  percent	
  

go	
  to	
  $1,086.	
  The	
  average	
  rent	
  naSonwide	
  also	
  increased	
  by	
  2	
  percent	
  to	
  $1,064	
  during	
  the	
  same	
  

220	
  

Home Price Rise Smaller an for Nation 

Post Bubble Decline Continues 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

0	
  

50	
  

100	
  

150	
  

200	
  

250	
  

300	
  

350	
  

400	
  

2003	
   2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
   2011	
  

New and Existing Home Sales: Chicago Compared to the Nation 

Annual	
  Home	
  Sales	
  (thousands)	
  	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
   Chicago	
  MSA:	
  New	
  Sales	
  

Sources:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Date	
  of	
  Census # 4/1/10

Chicago	
  Population # 9,461,105

	
  	
  	
  Annual	
  Growth	
  Rate	
   -­‐ 0.4%

Chicago	
  Households # 3,475,726

	
  	
  	
  Annual	
  Growth	
  Rate	
   -­‐ 0.6%

Chicago	
  Housing	
  Units # 3,797,247

	
  	
  	
  Annual	
  Growth	
  Rate	
   -­‐ 1.0%

Chicago	
  Housing	
  Unit	
  Growth	
  Outpaced	
  Population	
  and	
  

Household	
  Growth	
  During	
  the	
  Past	
  Decade

Source: Census Bureau (2000 and 2010 Decennial)

	
  people	
  in	
  Cook	
  County	
  increased	
  by	
  7.4	
  percent.	
  Although	
  the	
  city’s	
  low-­‐income	
  populaGon	
  remained	
  basically	
  flat	
  during	
  this	
  Gme,	
  the	
  low-­‐income	
  

	
  suburbs	
  increased	
  by	
  more	
  than	
  50	
  percent.	
  	
  Economic	
  condiGons	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago,	
  but	
  the	
  local	
  housing	
  market	
  remains	
  fragile	
  -­‐	
  with	
  

	
  of	
  distressed	
  mortgages,	
  large	
  numbers	
  of	
  vacant	
  homes,	
  and	
  many	
  severely	
  underwater	
  mortgages.	
  	
  ContribuGng	
  to	
  the	
  high	
  share	
  of	
  distressed	
  

0	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  foreclosure)	
  is	
  a	
  long	
  foreclosure	
  processing	
  Gme	
  in	
  Illinois	
  (averaging	
  575	
  days)	
  which	
  keeps	
  distressed	
  mortgages	
  in	
  the	
  

e	
  longer.	
  However,	
  the	
  AdministraGon’s	
  broad	
  approach	
  to	
  stabilize	
  the	
  housing	
  market	
  has	
  been	
  a	
  real	
  help	
  to	
  homeowners	
  in	
  Chicago	
  and	
  surrounding	
  

m	
  to	
  the	
  Obama	
  AdministraGon’s	
  Housing	
  Scorecard	
  provides	
  a	
  summary	
  of	
  trends	
  and	
  condiGons	
  in	
  the	
  local	
  economy	
  and	
  the	
  impact	
  of	
  the	
  

orts	
  to	
  stabilize	
  the	
  housing	
  market	
  and	
  help	
  local	
  homeowners.	
  

owth, Employment, and Housing Market: 

f	
  9.46	
  million	
  people,	
  the	
  Chicago	
  MSA	
  is	
  the	
  third	
  largest	
  in	
  the	
  

the	
  most	
  recent	
  Census.	
  From	
  2000	
  to	
  2010,	
  populaGon	
  growth	
  was	
  

n	
  average	
  rate	
  of	
  0.4	
  percent	
  per	
  year.	
  During	
  this	
  period,	
  natural	
  

births	
  minus	
  deaths)	
  accounted	
  for	
  all	
  of	
  the	
  increase,	
  as	
  an	
  average	
  

ple	
  moved	
  out	
  of	
  the	
  Chicago	
  MSA	
  each	
  year	
  than	
  moved	
  in.	
  	
  In	
  

	
  the	
  City	
  of	
  Chicago	
  is	
  located,	
  the	
  populaGon	
  declined	
  by	
  an	
  

eople,	
  or	
  0.3	
  percent,	
  annually.	
  	
  

s	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago.	
  Although	
  the	
  local	
  economy	
  expanded	
  by	
  an	
  average	
  of	
  42,700	
  jobs	
  per	
  year,	
  represenGng	
  a	
  1.0	
  percent	
  pace	
  of	
  growth	
  during	
  

om	
  the	
  second	
  quarter	
  of	
  2004	
  through	
  the	
  first	
  quarter	
  of	
  2008,	
  job	
  losses	
  were	
  significant	
  as	
  a	
  result	
  of	
  the	
  recent	
  recession.	
  During	
  the	
  two	
  year	
  period	
  from	
  the	
  

008	
  through	
  the	
  first	
  quarter	
  of	
  2010,	
  job	
  losses	
  averaged	
  165,500	
  jobs,	
  or	
  3.6	
  percent	
  per	
  year.	
  A	
  modest	
  recovery	
  has	
  been	
  underway	
  since,	
  with	
  annual	
  job	
  gains	
  

r	
  0.6	
  percent.	
  The	
  professional	
  and	
  business	
  services,	
  construcGon,	
  and	
  wholesale	
  trade	
  sectors	
  have	
  been	
  the	
  major	
  contributors	
  to	
  job	
  growth	
  during	
  2010	
  and	
  

bs	
  by	
  a	
  combined	
  total	
  of	
  40,700	
  per	
  year.	
  Offsegng	
  job	
  gains	
  during	
  this	
  same	
  period	
  were	
  declines	
  in	
  the	
  government	
  and	
  informaGon	
  sectors,	
  with	
  average	
  annual	
  

3,400	
  jobs,	
  respecGvely.	
  The	
  unemployment	
  rate	
  for	
  the	
  Chicago	
  MSA	
  remains	
  high,	
  but	
  has	
  improved	
  from	
  a	
  high	
  of	
  11.1	
  in	
  January	
  2010	
  to	
  10.0	
  percent	
  in	
  

he	
  naGonal	
  unemployment	
  rate	
  reached	
  a	
  high	
  of	
  10.0	
  in	
  October	
  2009	
  and	
  fell	
  to	
  8.5	
  by	
  December	
  2011.	
  

126	
  

128	
  

130	
  

132	
  

134	
  

136	
  

138	
  

Year	
  and	
  Quarter	
  

Job Market Conditions Improving for Chicago and the Nation 

Quarterly	
  Nonfarm	
  Employment	
  

Chicago	
  MSA	
   NaGon	
  (right	
  axis)	
  

Adjusted	
  Data	
  	
  

eau	
  of	
  Labor	
  	
  StaGsGcs	
  

Millions	
  

0	
  

2	
  

4	
  

6	
  

8	
  

10	
  

12	
  

Unemployment Rate Remains High 

Monthly	
  Unemployment	
  Rate	
  (Percent)	
  

Chicago	
  MSA	
   NaGon	
  

Seasonally	
  Adjusted	
  Data	
  

Source:	
  Bureau	
  of	
  Labor	
  StaGsGcs	
  

panned	
  by	
  the	
  Census,	
  new	
  housing	
  producGon	
  exceeded	
  household	
  growth	
  in	
  the	
  Chicago	
  MSA,	
  and	
  this	
  excess	
  construcGon	
  

versupply	
  of	
  housing	
  and	
  led	
  to	
  steeper	
  price	
  declines	
  amer	
  the	
  housing	
  bubble	
  burst.	
  According	
  to	
  the	
  Census,	
  household	
  growth	
  

nt	
  annually	
  between	
  2000	
  and	
  2010,	
  but	
  net	
  annual	
  housing	
  unit	
  growth	
  at	
  1.0	
  percent	
  was	
  approximately	
  twice	
  the	
  corresponding	
  

sehold	
  growth	
  rates.	
  According	
  to	
  the	
  Census	
  Bureau,	
  the	
  number	
  of	
  vacant	
  units	
  in	
  Chicago	
  increased	
  by	
  an	
  average	
  of	
  13,900	
  units,	
  

ally	
  during	
  the	
  2000s,	
  almost	
  twice	
  the	
  naGonal	
  rate	
  during	
  the	
  same	
  period.	
  Unlike	
  other	
  parts	
  of	
  the	
  naGon	
  for	
  which	
  investor	
  

ajor	
  cause	
  of	
  overbuilding	
  prior	
  to	
  the	
  crisis,	
  investor	
  home	
  purchases	
  in	
  Chicago	
  represented	
  a	
  smaller	
  share	
  of	
  total	
  purchases	
  than	
  

fically,	
  from	
  the	
  first	
  half	
  of	
  2000	
  to	
  the	
  first	
  half	
  of	
  2006,	
  home	
  sales	
  to	
  investors	
  in	
  the	
  Chicago-­‐Joliet-­‐Naperville	
  Metropolitan	
  

	
  to	
  10	
  percent	
  of	
  all	
  sales,	
  while	
  the	
  corresponding	
  increase	
  for	
  the	
  naGon	
  was	
  7	
  to	
  16	
  percent.	
  In	
  Chicago,	
  another	
  cause	
  of	
  the	
  

o	
  the	
  crisis	
  was	
  speculaGve	
  construcGon	
  of	
  inner	
  city	
  condominium	
  units	
  which	
  did	
  not	
  sell	
  to	
  owner	
  occupants	
  or	
  to	
  investors.	
  

Economic	
  condiGons	
  are	
  starGng	
  to	
  improve	
  in	
  Chicago.	
  Although	
  the	
  local	
  economy	
  expanded	
  by	
  an	
  average	
  of	
  42,700	
  jobs	
  per	
  year,	
  re

the	
  4	
  year	
  period	
  from	
  the	
  second	
  quarter	
  of	
  2004	
  through	
  the	
  first	
  quarter	
  of	
  2008,	
  job	
  losses	
  were	
  significant	
  as	
  a	
  result	
  of	
  the	
  recent	
  

second	
  quarter	
  of	
  2008	
  through	
  the	
  first	
  quarter	
  of	
  2010,	
  job	
  losses	
  averaged	
  165,500	
  jobs,	
  or	
  3.6	
  percent	
  per	
  year.	
  A	
  modest	
  recovery	
  h

averaging	
  26,700,	
  or	
  0.6	
  percent.	
  The	
  professional	
  and	
  business	
  services,	
  construcGon,	
  and	
  wholesale	
  trade	
  sectors	
  have	
  been	
  the	
  major

2011,	
  increasing	
  jobs	
  by	
  a	
  combined	
  total	
  of	
  40,700	
  per	
  year.	
  Offsegng	
  job	
  gains	
  during	
  this	
  same	
  period	
  were	
  declines	
  in	
  the	
  governme

losses	
  of	
  6,500	
  and	
  3,400	
  jobs,	
  respecGvely.	
  The	
  unemployment	
  rate	
  for	
  the	
  Chicago	
  MSA	
  remains	
  high,	
  but	
  has	
  improved	
  from	
  a	
  high	
  of

December	
  2011.	
  	
  The	
  naGonal	
  unemployment	
  rate	
  reached	
  a	
  high	
  of	
  10.0	
  in	
  October	
  2009	
  and	
  fell	
  to	
  8.5	
  by	
  December	
  2011.	
  

126	
  

128	
  

130	
  

132	
  

134	
  

136	
  

138	
  

4,200	
  

4,300	
  

4,400	
  

4,500	
  

4,600	
  

Thousands	
  

Year	
  and	
  Quarter	
  

Job Market Conditions Improving for Chicago and the Nation 

Quarterly	
  Nonfarm	
  Employment	
  

Chicago	
  MSA	
   NaGon	
  (right	
  axis)	
  

Seasonally	
  Adjusted	
  Data	
  	
  

Source:	
  Bureau	
  of	
  Labor	
  	
  StaGsGcs	
  

Millions	
  

or	
  7.7	
  percent	
  annually	
  during	
  the	
  2000s,	
  almost	
  twice	
  the	
  naGonal	
  rate	
  during	
  the	
  same	
  period.	
  Unlike	
  other	
  parts	
  of	
  the	
  naGon	
  for	
  whi

speculaGon	
  was	
  a	
  major	
  cause	
  of	
  overbuilding	
  prior	
  to	
  the	
  crisis,	
  investor	
  home	
  purchases	
  in	
  Chicago	
  represented	
  a	
  smaller	
  share	
  of	
  tota

in	
  the	
  naGon.	
  Specifically,	
  from	
  the	
  first	
  half	
  of	
  2000	
  to	
  the	
  first	
  half	
  of	
  2006,	
  home	
  sales	
  to	
  investors	
  in	
  the	
  Chicago-­‐Joliet-­‐Naperville	
  Met

Division	
  rose	
  from	
  5	
  to	
  10	
  percent	
  of	
  all	
  sales,	
  while	
  the	
  corresponding	
  increase	
  for	
  the	
  naGon	
  was	
  7	
  to	
  16	
  percent.	
  In	
  Chicago,	
  another	
  c

overbuilding	
  prior	
  to	
  the	
  crisis	
  was	
  speculaGve	
  construcGon	
  of	
  inner	
  city	
  condominium	
  units	
  which	
  did	
  not	
  sell	
  to	
  owner	
  occupants	
  or	
  to	
  
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Chicago MSA | Page 3

Trends in Mortgage 

Delinquencies and Foreclosures: 

Chicago homeowners continue to struggle with some of the highest 

levels of mortgage delinquencies and foreclosures in the nation. As 

of January 2012, Chicago placed 28th out of 366 metropolitan 

areas ranked by share of mortgages at risk of foreclosure (90 or 

more days delinquent or in the foreclosure process) according 

to LPS Applied Analytics. LPS data also show that Chicago area 

mortgages at risk of foreclosure increased by 1.5 percent during 

the past year, from 125,400 in January 2011 to 127,300 in 

January 2012, compared with a national decline of 10.4 percent 

during the same period. CoreLogic data show that the rate of 

mortgages at risk of foreclosure in Chicago since 2006 has been 

consistently higher than in the nation, with a sharp spike upward in 

2009. Realty Trac data also show that foreclosure starts increased 

abruptly (47 percent) in the Chicago MSA in 2007 and 2008, 

when single-family foreclosures were largely driven by unaffordable 

loan products. Beginning in 2009, foreclosures were increasingly 

triggered by loss of income, unemployment, and strategic defaults, 

according to the Federal Reserve Bank of Chicago. 

Although the foreclosure rate in Chicago remains higher than 

in the nation overall, it has improved. According to Realty Trac, 

foreclosure completions in Chicago declined from 45,555 during 

2010 to 36,043 for 2011, although lender process reviews 

continue to affect foreclosure completions locally and nationally. A 

major issue of concern, however, is the relatively high concentration 

of distressed mortgages in many of Chicago’s neighborhoods. 

CoreLogic data show that almost one-fourth of mortgage loans 

in Chicago are in neighborhoods where the share of distressed 

mortgages is more than twice the national rate. These hardest hit 

areas are also experiencing high levels of residential vacancies, 

underwater mortgages, and home price declines. In an effort to 

stabilize these neighborhoods, numerous programs sponsored by 

state and local entities in partnership with the federal government 

are currently underway. CoreLogic reports that 25 percent of 

mortgages in the Chicago MSA are currently underwater – 

compared to 23 percent nationally - representing additional 

homeowners and loans potentially at risk. 

The share of distressed mortgages in Chicago is currently at 9.6 

percent, matching its February 2010 peak level; in contrast, 

national rates have declined from a high of 7.9 percent in February 

2010 to 6.7 percent currently. A partial explanation for Chicago’s 

higher share of mortgages at risk of foreclosure is the time it takes 

to complete a foreclosure in Illinois. According to Realty Trac, the 

average foreclosure processing time in Illinois, which uses the 

judicial foreclosure process, was 575 days in the fourth quarter of 

2011 (fourth longest among states) while the national rate was

348 days. 

d for neighborhoods

ana-Wisconsin

Home Price Rise Smaller an for Nation 

Post Bubble Decline Continues 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Chicago	
  Metropolitan	
  Division	
   NaSon	
  

ic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  Chicago-­‐Joliet-­‐Naperville,	
  IL	
  Metropolitan	
  Division.	
  

4	
  

5	
  

6	
  

7	
  

8	
  

9	
  

Year	
  and	
  Quarter	
  

Rental Vacancy Rates Consistently Lower an Nation 

Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

Chicago	
  Metro	
  Area	
   NaSon	
  

Source:	
  Reis	
  Inc.	
  

0	
  

2	
  

4	
  

6	
  

8	
  

10	
  

12	
  

Chicago	
  MSA	
   NaSon	
  

Source:	
  CoreLogic	
  

Share of Distressed Mortgages Substantially Higher an the Nation 

Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  All	
  AcSve	
  Mortgages)	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
   2011	
  

ew and Existing Home Sales: Chicago Compared to the Nation 

Annual	
  Home	
  Sales	
  (thousands)	
  	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
   Chicago	
  MSA:	
  New	
  Sales	
  

c,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

d for neighborhoods

iana-Wisconsin

Home Price Rise Smaller an for Nation 

Post Bubble Decline Continues 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Chicago	
  Metropolitan	
  Division	
   NaSon	
  

ic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  Chicago-­‐Joliet-­‐Naperville,	
  IL	
  Metropolitan	
  Division.	
  

4	
  

5	
  

6	
  

7	
  

8	
  

9	
  

Year	
  and	
  Quarter	
  

Rental Vacancy Rates Consistently Lower an Nation 

Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

Chicago	
  Metro	
  Area	
   NaSon	
  

Source:	
  Reis	
  Inc.	
  

0	
  

2	
  

4	
  

6	
  

8	
  

10	
  

12	
  

Chicago	
  MSA	
   NaSon	
  

Source:	
  CoreLogic	
  

Share of Distressed Mortgages Substantially Higher an the Nation 

Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  All	
  AcSve	
  Mortgages)	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
   2011	
  

ew and Existing Home Sales: Chicago Compared to the Nation 

Annual	
  Home	
  Sales	
  (thousands)	
  	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
   Chicago	
  MSA:	
  New	
  Sales	
  

c,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Foreclosure	
  

Completions

Foreclosure	
  

Rate

Foreclosure	
  

Completions

Foreclosure	
  

Rate

Chicago	
  MSA	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  9,400	
   0.2% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  111,900	
   2.9%

Nation	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  175,800	
   0.1% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  2,574,400	
   2.0%

Note:	
  	
  Foreclosure	
  Rates	
  as	
  Percent	
  of	
  All	
  Housing	
  Units;

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Data	
  through	
  January	
  2012	
  for	
  Foreclosures	
  since	
  April	
  2009

Source:	
  Realty	
  Trac	
  and	
  Census	
  Bureau

Foreclosure	
  Completion	
  Rates	
  in	
  the	
  Chicago	
  MSA

Fourth	
  Quarter	
  2011 Since	
  April	
  1,	
  2009

Area

eak	
  in	
  2006	
  to	
  the	
  end	
  of	
  the	
  house	
  price	
  bubble	
  in	
  April	
  2009,	
  home	
  prices	
  fell	
  by	
  23	
  percent	
  in	
  

ut	
  three-­‐quarters	
  of	
  the	
  naSonal	
  average	
  peak-­‐to-­‐low	
  decline	
  of	
  31	
  percent.	
  	
  However,	
  Chicago	
  

have	
  conSnued	
  to	
  fall	
  -­‐	
  an	
  addiSonal	
  14	
  percent	
  from	
  their	
  peak	
  in	
  2006	
  -­‐	
  compared	
  to	
  an	
  

percent	
  decline	
  for	
  naSonal	
  sales	
  prices.	
  	
  

rental	
  housing	
  market	
  remains	
  strong.	
  Rental	
  vacancy	
  rates	
  in	
  Chicago	
  have	
  historically	
  been	
  

e	
  naSonal	
  average.	
  According	
  to	
  Reis	
  Inc.,	
  the	
  overall	
  apartment	
  vacancy	
  rate	
  in	
  Chicago	
  was	
  4.6	
  

e	
  fourth	
  quarter	
  of	
  2011,	
  down	
  from	
  5.6	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  current	
  naSonal	
  

2	
  percent.	
  	
  During	
  the	
  fourth	
  quarter	
  of	
  2011,	
  average	
  rents	
  in	
  Chicago	
  increased	
  by	
  2	
  percent	
  

go	
  to	
  $1,086.	
  The	
  average	
  rent	
  naSonwide	
  also	
  increased	
  by	
  2	
  percent	
  to	
  $1,064	
  during	
  the	
  same	
  

100	
  

120	
  

140	
  

160	
  

180	
  

200	
  

220	
  

Home Price Rise Smaller an for Nation 

Post Bubble Decline Continues 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Chicago	
  Metropolitan	
  Division	
   NaSon	
  

Source:	
  CoreLogic.	
  Metro	
  area	
  HPI	
  is	
  	
  reported	
  for	
  the	
  Chicago-­‐Joliet-­‐Naperville,	
  IL	
  Metropolitan	
  Division.	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

0	
  

50	
  

100	
  

150	
  

200	
  

250	
  

300	
  

2003	
   2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
   2011	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Chicago	
  MSA:	
  ExisSng	
  	
  Sales	
   Chicago	
  MSA:	
  New	
  Sales	
  

Sources:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Mortgage Delinquencies and Foreclosures: 

wners	
  conSnue	
  to	
  struggle	
  with	
  some	
  of	
  the	
  highest	
  levels	
  of	
  mortgage	
  delinquencies	
  and	
  

the	
  naSon.	
  As	
  of	
  January	
  2012,	
  Chicago	
  ranked	
  28th	
  out	
  of	
  366	
  metropolitan	
  areas	
  for	
  the	
  share	
  of	
  

sk	
  of	
  foreclosure	
  (90	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  the	
  foreclosure	
  process)	
  according	
  to	
  LPS	
  

cs.	
  	
  LPS	
  data	
  show	
  that	
  Chicago	
  area	
  mortgages	
  at	
  risk	
  of	
  foreclosure	
  increased	
  by	
  1.5	
  percent	
  

year,	
  from	
  125,400	
  in	
  January	
  2011	
  to	
  127,300	
  in	
  January	
  2012,	
  compared	
  with	
  a	
  naSonal	
  decline	
  of	
  

ring	
  the	
  same	
  period.	
  CoreLogic	
  data	
  show	
  that	
  the	
  rate	
  of	
  mortgages	
  at	
  risk	
  of	
  foreclosure	
  in	
  

en	
  consistently	
  higher	
  than	
  in	
  the	
  naSon	
  since	
  2006,	
  with	
  a	
  sharp	
  spike	
  upward	
  in	
  2009.	
  Realty	
  Trac	
  

that	
  newly	
  iniSated	
  foreclosures	
  increased	
  abruptly	
  (47	
  percent)	
  in	
  the	
  Chicago	
  MSA	
  in	
  2007	
  and	
  

gle-­‐family	
  foreclosures	
  were	
  largely	
  driven	
  by	
  unaffordable	
  loan	
  products.	
  Beginning	
  in	
  2009,	
  

re	
  increasingly	
  triggered	
  by	
  loss	
  of	
  income,	
  unemployment,	
  and	
  strategic	
  defaults,	
  according	
  to	
  the	
  

	
  Bank	
  of	
  Chicago.	
  	
  	
  

tressed	
  mortgages	
  in	
  Chicago	
  is	
  currently	
  at	
  9.6	
  percent,	
  matching	
  its	
  February	
  2010	
  peak	
  level;	
  in	
  

al	
  rates	
  have	
  declined	
  from	
  a	
  high	
  of	
  7.9	
  percent	
  in	
  February	
  2010	
  to	
  6.7	
  percent	
  currently.	
  A	
  parSal	
  

the	
  high	
  level	
  of	
  mortgages	
  at	
  risk	
  of	
  foreclosure	
  in	
  Chicago	
  is	
  the	
  Sme	
  it	
  takes	
  to	
  complete	
  a	
  

inois.	
  According	
  to	
  Realty	
  Trac,	
  the	
  average	
  foreclosure	
  processing	
  Sme	
  in	
  Illinois,	
  which	
  employs	
  

closure	
  process,	
  was	
  575	
  days	
  in	
  the	
  fourth	
  quarter	
  of	
  2011	
  (fourth	
  longest	
  among	
  states)	
  

the	
  naSonal	
  rate	
  of	
  348	
  days.	
  	
  

reclosure	
  rate	
  in	
  Chicago	
  remains	
  higher	
  than	
  in	
  the	
  naSon	
  overall,	
  it	
  has	
  improved.	
  According	
  to	
  

eclosure	
  compleSons	
  in	
  Chicago	
  declined	
  from	
  45,555	
  during	
  2010	
  to	
  36,043	
  for	
  2011,	
  although	
  

reviews	
  conSnue	
  to	
  affect	
  foreclosure	
  compleSons	
  locally	
  and	
  naSonally. A	
  major	
  issue	
  of	
  concern,	
  

relaSvely	
  high	
  concentraSon	
  of	
  distressed	
  mortgages	
  in	
  many	
  of	
  Chicago's	
  neighborhoods.	
  

show	
  that	
  almost	
  one-­‐fourth	
  of	
  mortgage	
  loans	
  in	
  Chicago	
  are	
  in	
  neighborhoods	
  where	
  the	
  share	
  of	
  

gages	
  is	
  more	
  than	
  twice	
  the	
  naSonal	
  rate.	
  These	
  hardest	
  hit	
  areas	
  are	
  also	
  experiencing	
  high	
  levels	
  

cancies,	
  underwater	
  mortgages,	
  and	
  home	
  price	
  declines.	
  In	
  an	
  effort	
  to	
  stabilize	
  these	
  

	
  numerous	
  programs	
  sponsored	
  by	
  state	
  and	
  local	
  enSSes	
  in	
  partnership	
  with	
  the	
  federal	
  

	
  currently	
  underway.	
  CoreLogic	
  reports	
  that	
  25	
  percent	
  of	
  mortgages	
  in	
  the	
  Chicago	
  MSA	
  are	
  

water	
  –	
  compared	
  to	
  23	
  percent	
  naSonally	
  -­‐	
  represenSng	
  addiSonal	
  homeowners	
  and	
  loans	
  

sk.	
  	
  	
  

Foreclosure Completion Rates in the Chicago MSA

Area

Fourth Quarter 2011 Since April 1, 2009

Foreclosure 

Completions

Foreclosure 

Rate

Foreclosure 

Completions

Foreclosure 

Rate

Chicago MSA 9,400 0.2% 111,900 2.9%

Nation 175,800 0.1% 2,574,400 2.0%

Note: Foreclosure Rates as Percent of All Housing Units;

Data through January 2011 for Foreclosures since April 2009

Source: Realty Trac and Census Bureau
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Chicago MSA | Page 4

The Administration’s Efforts

to Stabilize the Chicago 

Housing Market: 

From the launch of the Administration’s assistance 

programs in April 2009 through the end of January 

2011, more than 220,500 mortgage assistance 

interventions have been offered to homeowners in 

the Chicago metropolitan area. More than 132,500 

interventions were offered through the Home Affordable 

Modification Program (HAMP) and the Federal Housing 

Administration (FHA) loss mitigation and early delinquency 

intervention programs. An estimated additional 88,000 

proprietary mortgage modifications have been offered 

through HOPE Now Alliance servicers. While some 

homeowners may have received help from more than 

one program, the number of times assistance has been 

offered in the Chicago MSA is nearly double the number 

of foreclosures completed during this period (111,900). 

In addition to offers of mortgage aid to homeowners, the 

Administration’s Neighborhood Stabilization Program 

(NSP) and Hardest Hit Fund have helped to stabilize the 

Chicago housing market.

Given over three rounds, the Neighborhood 

Stabilization Program has invested $7 billion 

nationwide to help localities work with non-profits and 

community development corporations to turn tens of 

thousands of abandoned and foreclosed homes that lower 

property values into homeownership opportunities and the 

affordable rental housing that communities need. 

NSP1 funds were granted to all states and selected local 

governments on a formula basis under Division B, Title 

III of the Housing and Economic Recovery Act (HERA) 

of 2008; NSP2 funds authorized under the American 

Recovery and Reinvestment Act (the Recovery Act) of 2009 

provided grants to states, local governments, nonprofits 

and a consortium of nonprofit entities on a competitive 

basis; and NSP3 funds authorized under the Dodd–Frank Wall Street Reform and 

Consumer Protection Act of 2010 provided neighborhood stabilization grants to all 

states and select governments on a formula basis.

In addition to stabilizing neighborhoods and providing affordable housing, NSP 

funds have helped save jobs. Each home purchased, rehabilitated and sold through 

the NSP program is the result of the efforts of 35 to 50 local employees.

Overall, a total of $264.9 million has been awarded to twelve grantees in the 

Chicago MSA: the cities of Chicago, Elgin, Gary, and Evanston; the counties of 

Cook, DuPage, Kane, McHenry, Will, Lake County, IL, and Lake County, IN. Eleven 

government jurisdictions received a total of $119.3 million in NSP1 funds, two 

received $116.1 million in total NSP2 funds, and five received $29.5 million in total 

NSP3 funds. Approximately 248 households have already benefited from NSP, and 

activities funded by the program are expected to provide assistance to an additional 

1,823 owner and renter households. Examples of how these funds have been put to 

use are provided below.

• The City of Chicago’s NSP strategy has been to invest in strategically chosen 

neighborhoods with additional investment support from local and national 

partners. The city has formed a unique partnership with Mercy Portfolio 

Services (MPS), a major non-profit housing agency, to invest its NSP1 funds 

of $55.2 million through an extensive network of more than 50 competitively 

selected developers and non-profit neighborhood entities. MPS has experienced 

management staff and protocols established for quickly purchasing and 

rehabilitating units to halt neighborhood deterioration. Mercy has been 

successful at acquiring and renovating both single-family and multifamily units in 

the city’s NSP1 target areas. 

• With NSP2 funds of $98.0 million, the City of Chicago has tailored programs 

to the local conditions of three neighborhood types to reverse the decline 

caused by foreclosed and abandoned homes: a) communities prone to growth 

and quick recovery, b) communities that can be stabilized around targeted 

investment areas, and c) communities requiring consolidation to reduce the 

negative impacts of blighted structures. The city’s goal is to reverse the decline 

in home sales, lock in housing affordability for buyers and renters, and support 

local economic development and job growth. The City of Chicago is a national 

innovator in both the scale and intensity of this type of targeting.

Chicago MSA NSP Activity (Housing Units) Projected Completed

NSP1 Total 865 248

Construction of new housing 2 1

Homeownership assistance to low- and 

moderate-income 33 56

Rehabilitation/reconstruction of 

residential structures 830 191

NSP2 Total 864 0

Construction of new housing 30 0

Rehabilitation/reconstruction of

residential structures 834 0

NSP3 Total 94 0

Rehabilitation/reconstruction of

residential structures 94 0

1.636935

pa	
  MSA	
  NSP	
  Activity	
  (Housing	
  Units) Projected Completed

	
  Total 865 248

struction	
  of	
  new	
  housing 2 1

meownership	
  assistance	
  to	
  low-­‐	
  and	
  moderate-­‐income 33 56

abilitation/reconstruction	
  of	
  residential	
  structures 830 191

	
  Total 864 0

30 0

abilitation/reconstruction	
  of	
  residential	
  structures 834 0

94 0

abilitation/reconstruction	
  of	
  residential	
  structures 94 0

Spotlight on the Housing Market in Chicago-Joliet-Naperville, Illinois-Indiana-Wisconsin MSA

struction	
  of	
  new	
  housing

	
  Total

he Administration’s Efforts to Stabilize the Chicago Housing Market: 

om	
  the	
  launch	
  of	
  the	
  AdministraEon’s	
  assistance	
  programs	
  in	
  April	
  2009	
  through	
  the	
  end	
  of	
  January	
  

11,	
  more	
  than	
  220,500	
  mortgage	
  assistance	
  intervenEons	
  have	
  been	
  offered	
  to	
  homeowners	
  in	
  the	
  

icago	
  metropolitan	
  area.	
  	
  More	
  than	
  132,500	
  intervenEons	
  were	
  offered	
  through	
  the	
  Home	
  

ffordable	
  ModificaEon	
  Program	
  (HAMP)	
  and	
  the	
  Federal	
  Housing	
  AdministraEon	
  (FHA)	
  loss	
  miEgaEon	
  

d	
  early	
  delinquency	
  intervenEon	
  programs.	
  	
  An	
  esEmated	
  addiEonal	
  88,000	
  proprietary	
  mortgage	
  

odificaEons	
  have	
  been	
  offered	
  through	
  HOPE	
  Now	
  Alliance	
  servicers.	
  While	
  some	
  homeowners	
  may	
  

ve	
  received	
  help	
  from	
  more	
  than	
  one	
  program,	
  the	
  number	
  of	
  Emes	
  assistance	
  has	
  been	
  offered	
  in	
  

e	
  Chicago	
  MSA	
  is	
  nearly	
  double	
  the	
  number	
  of	
  foreclosures	
  completed	
  during	
  this	
  period	
  (111,900).	
  	
  In	
  

diEon	
  to	
  offers	
  of	
  mortgage	
  aid	
  to	
  homeowners,	
  the	
  AdministraEon’s	
  Neighborhood	
  StabilizaEon	
  

ogram	
  (NSP)	
  and	
  Hardest	
  Hit	
  Fund	
  have	
  helped	
  to	
  stabilize	
  the	
  Chicago	
  housing	
  market.	
  

ven	
  over	
  three	
  rounds,	
  the	
  Neighborhood	
  StabilizaKon	
  Program	
  has	
  invested	
  $7	
  billion	
  naEonwide	
  to	
  

lp	
  localiEes	
  work	
  with	
  non-­‐profits	
  and	
  community	
  development	
  corporaEons	
  to	
  turn	
  tens	
  of	
  

ousands	
  of	
  abandoned	
  and	
  foreclosed	
  homes	
  that	
  lower	
  property	
  values	
  into	
  homeownership	
  

portuniEes	
  and	
  	
  the	
  affordable	
  rental	
  housing	
  that	
  communiEes	
  need.	
  In	
  addiEon	
  to	
  stabilizing	
  

ighborhoods	
  and	
  providing	
  affordable	
  housing,	
  NSP	
  funds	
  have	
  helped	
  save	
  jobs.	
  Each	
  home	
  

rchased,	
  rehabilitated	
  and	
  sold	
  through	
  the	
  NSP	
  program	
  is	
  the	
  result	
  of	
  the	
  efforts	
  of	
  35	
  to	
  50	
  local	
  

mployees.	
  

erall,	
  a	
  total	
  of	
  $264.9	
  million	
  has	
  been	
  awarded	
  to	
  twelve	
  grantees	
  in	
  the	
  Chicago	
  MSA:	
  	
  the	
  ciEes	
  of	
  

icago,	
  Elgin,	
  Gary,	
  and	
  Evanston;	
  the	
  counEes	
  of	
  Cook,	
  DuPage,	
  Kane,	
  McHenry,	
  Will,	
  Lake	
  County,	
  IL,	
  

d	
  Lake	
  County,	
  IN.	
  	
  Eleven	
  government	
  jurisdicEons	
  received	
  $119.3	
  million	
  in	
  NSP1	
  funds,	
  two	
  

ceived	
  $116.1	
  million	
  in	
  NSP2	
  funds,	
  and	
  five	
  received	
  $29.5	
  million	
  in	
  NSP3	
  funds.	
  Approximately	
  248	
  

useholds	
  have	
  already	
  benefited	
  from	
  NSP,	
  and	
  acEviEes	
  funded	
  by	
  the	
  program	
  are	
  expected	
  to	
  

ovide	
  assistance	
  to	
  an	
  addiEonal	
  1,823	
  owner	
  and	
  renter	
  households.	
  	
  Examples	
  of	
  how	
  these	
  funds	
  

ve	
  been	
  put	
  to	
  use	
  are	
  provided	
  below.	
  

0	
  

50	
  

100	
  

150	
  

200	
  

250	
  

Mortgage Aid Extended More an 220,500 Times 

to Mitigate Rising Foreclosures 

Chicago	
  MSA:	
  CumulaEve	
  Offers	
  of	
  Aid	
  by	
  Source	
  Compared	
  with	
  Foreclosures	
  Since	
  April	
  1,	
  2009	
  	
  (Thousands)	
  

FHA	
  Loss	
  MiEgaEon	
   Hamp	
  ModificaEons	
   EsEmated	
  Hope	
  Now	
  ModificaEons	
   Foreclosure	
  CompleEons	
  

Note:	
  Data	
  on	
  HOPE	
  Now	
  proprietary	
  mortgage	
  modificaEons	
  are	
  not	
  available	
  at	
  metropolitan	
  area	
  level.	
  However,	
  HOPE	
  

Now	
  Alliance	
  reports	
  164,600	
  non-­‐HAMP	
  modificaEons	
  since	
  April	
  1,	
  2009	
  in	
  the	
  states	
  of	
  	
  IL,	
  IN,	
  and	
  WI	
  of	
  which	
  54	
  percent	
  

are	
  esEmated	
  by	
  HUD	
  to	
  have	
  occurred	
  in	
  the	
  Chicago	
  MSA.	
  

Sources:	
  Departments	
  of	
  HUD	
  and	
  Treasury,	
  HOPE	
  Now	
  Alliance,	
  and	
  Realty	
  Trac.	
  

Mortgage	
  Aid	
  Offers	
  in	
  Chicago	
  MSA	
  from	
  April	
  2009	
  through	
  January	
  2012:	
  220,500	
  	
  	
  	
  

	
  Foreclosure	
  CompleEons	
  Over	
  Same	
  Period:	
  111,900	
  

negaEve	
  impacts	
  of	
  blighted	
  structures.	
  The	
  city’s	
  goal	
  is	
  to	
  reverse	
  the	
  decline	
  in	
  home	
  sales,	
  lock	
  in	
  housing	
  

affordability	
  for	
  buyers	
  and	
  renters,	
  and	
  support	
  local	
  economic	
  development	
  and	
  job	
  growth.	
  The	
  City	
  of	
  Chicago	
  is	
  

a	
  naEonal	
  innovator	
  in	
  both	
  the	
  scale	
  and	
  intensity	
  of	
  this	
  type	
  of	
  targeEng.	
  

•	
  Under	
  NSP3,	
  the	
  City	
  of	
  Chicago	
  has	
  targeted	
  areas	
  where	
  a	
  modest	
  investment	
  can	
  have	
  a	
  significant	
  impact	
  and	
  

act	
  as	
  a	
  market	
  sEmulus.	
  The	
  program	
  has	
  invested	
  in	
  such	
  areas	
  throughout	
  the	
  city,	
  focusing	
  on	
  communiEes	
  that	
  

have	
  high	
  shares	
  of	
  REO	
  properEes	
  (foreclosed	
  properEes	
  sEll	
  owned	
  by	
  banks).	
  With	
  an	
  NSP3	
  grant	
  of	
  $16.0	
  million,	
  

the	
  program	
  is	
  turning	
  vacant	
  mulEfamily	
  properEes	
  into	
  very-­‐low	
  income	
  rental	
  housing	
  and	
  acquiring	
  and	
  

demolishing	
  homes	
  that	
  impose	
  safety	
  and	
  health	
  hazards.	
  These	
  laher	
  properEes	
  have	
  been	
  land	
  banked	
  for	
  future	
  

redevelopment.	
  All	
  of	
  the	
  NSP3	
  acEviEes	
  will	
  provide	
  much-­‐needed	
  affordable	
  housing,	
  eliminate	
  blight,	
  and	
  put	
  

neighborhoods	
  on	
  a	
  path	
  to	
  stabilizaEon.	
  	
  

•	
  The	
  City	
  of	
  Elgin	
  was	
  awarded	
  $2.2	
  million	
  in	
  NSP1	
  funds.	
  A	
  porEon	
  of	
  these	
  funds	
  has	
  been	
  used	
  to	
  rehabilitate	
  5	
  

single-­‐family	
  homes	
  and	
  the	
  city	
  is	
  working	
  with	
  Habitat	
  for	
  Humanity	
  of	
  the	
  Northern	
  Fox	
  Valley	
  to	
  complete	
  four	
  

addiEonal	
  homes.	
  	
  These	
  homes	
  are	
  both	
  affordable	
  and	
  in	
  close	
  proximity	
  to	
  such	
  resources	
  as	
  the	
  Hemmens	
  

Cultural	
  Center,	
  Gail	
  Borden	
  Public	
  Library,	
  and	
  commuter	
  rail	
  lines.	
  	
  

•	
  Lake	
  County,	
  IL	
  was	
  awarded	
  $4.6	
  million	
  under	
  NSP1	
  and	
  $1.4	
  million	
  under	
  NSP3.	
  	
  Single-­‐family	
  foreclosed	
  

properEes	
  in	
  the	
  Waukegan,	
  Round	
  Lake,	
  Round	
  Lake	
  Beach,	
  and	
  Mundelein	
  areas	
  of	
  Lake	
  County, have	
  been	
  

purchased	
  and	
  rehabilitated	
  with	
  part	
  of	
  these	
  NSP	
  funds.	
  In	
  all	
  of	
  these	
  areas,	
  the	
  foreclosed	
  properEes	
  had	
  

lowered	
  property	
  values	
  and	
  increased	
  rates	
  of	
  vandalism	
  and	
  crime.	
  	
  

•	
  In	
  Will	
  County,	
  part	
  of	
  a	
  $5.2	
  million	
  grant	
  under	
  NSP1	
  has	
  gone	
  towards	
  a	
  program	
  designed	
  to	
  minimize	
  risk	
  to	
  

the	
  county	
  by	
  finding	
  a	
  buyer	
  before	
  a	
  foreclosed	
  or	
  abandoned	
  home	
  is	
  purchased	
  and	
  rehabilitated.	
  The	
  success	
  of	
  

this	
  program	
  has	
  been	
  set	
  in	
  moEon	
  by	
  the	
  partnerships	
  the	
  county	
  has	
  developed	
  with	
  construcEon	
  and	
  insurance	
  

companies,	
  realtors,	
  and	
  housing	
  counselors.	
  	
  

e	
  City	
  of	
  Chicago’s	
  NSP	
  strategy	
  has	
  been	
  to	
  invest	
  in	
  strategically	
  chosen	
  neighborhoods	
  with	
  

Eonal	
  investment	
  support	
  from	
  local	
  and	
  naEonal	
  partners.	
  The	
  city	
  has	
  formed	
  a	
  unique	
  partnership	
  

	
  Mercy	
  Porkolio	
  Services	
  (MPS),	
  a	
  major	
  non-­‐profit	
  housing	
  agency,	
  to	
  invest	
  its	
  NSP1	
  funds	
  of	
  $55.2	
  

on	
  through	
  an	
  extensive	
  network	
  of	
  more	
  than	
  50	
  compeEEvely	
  selected	
  developers	
  and	
  non-­‐profit	
  

hborhood	
  enEEes.	
  MPS	
  has	
  experienced	
  management	
  staff	
  and	
  protocols	
  established	
  for	
  quickly	
  

hasing	
  and	
  rehabilitaEng	
  units	
  to	
  halt	
  neighborhood	
  deterioraEon.	
  Mercy	
  has	
  been	
  successful	
  at	
  

iring	
  and	
  renovaEng	
  both	
  single-­‐family	
  and	
  mulEfamily	
  units	
  in	
  the	
  city’s	
  NSP1	
  target	
  areas.	
  	
  

th	
  NSP2	
  funds	
  of	
  $98.0	
  million,	
  the	
  City	
  of	
  Chicago	
  has	
  tailored	
  programs	
  to	
  the	
  local	
  condiEons	
  of	
  

e	
  neighborhood	
  types	
  to	
  reverse	
  the	
  decline	
  	
  

ed	
  by	
  foreclosed	
  and	
  abandoned	
  homes:	
  	
  a)	
  communiEes	
  prone	
  to	
  growth	
  and	
  quick	
  recovery,	
  b)	
  

muniEes	
  that	
  can	
  be	
  stabilized	
  around	
  targeted	
  	
  

stment	
  areas,	
  and	
  c)	
  communiEes	
  requiring	
  consolidaEon	
  to	
  reduce	
  the	
  	
  
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | March 2012 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Chicago MSA | Page 5

• Under NSP3, the City of Chicago has targeted areas where a modest investment can have a significant impact and act as a market stimulus. 

The program has invested in such areas throughout the city, focusing on communities that have high shares of REO properties (foreclosed 

properties still owned by banks). With an NSP3 grant of $16.0 million, the program is turning vacant multifamily properties into very-low income 

rental housing and acquiring and demolishing homes that impose safety and health hazards. These latter properties have been land banked for 

future redevelopment. All of the NSP3 activities will provide much-needed affordable housing, eliminate blight, and put neighborhoods on a path 

to stabilization. 

• The City of Elgin was awarded $2.2 million in NSP1 funds. A portion of these funds have been used to rehabilitate 5 single-family homes and 

the city is working with Habitat for Humanity of the Northern Fox Valley to complete four additional homes. These homes are both affordable and 

in close proximity to such resources as the Hemmens Cultural Center, Gail Borden Public Library, and commuter rail lines. 

• Lake County, IL was awarded $4.6 million under NSP1 and $1.4 million under NSP3. Single-family foreclosed properties in the Waukegan, 

Round Lake, Round Lake Beach, and Mundelein areas of Lake County, have been purchased and rehabilitated with part of these NSP funds. In all 

of these areas, the foreclosed properties had lowered property values and increased rates of vandalism and crime. 

• In Will County, a portion of the county’s $5.2 million NSP1 grant has gone towards a program designed to minimize risk to the county by 

finding a buyer before a foreclosed or abandoned home is purchased and rehabilitated. The success of this program has been set in motion by 

the partnerships the county has developed with construction and insurance companies, realtors, and housing counselors. 

As part of the State of Illinois’ housing recovery efforts, the Illinois Hardest Hit Fund program was launched in July 2011 to help Illinois 

homeowners who have experienced a substantial decrease in income due to job loss or underemployment, by providing a mortgage payment 

bridge while they seek new or better employment. The Illinois Hardest Hit Fund program is funded by a grant of more than $400 million from the 

Administration’s Hardest Hit Fund and administered by the Illinois Housing Development Authority (IHDA).

Assistance is provided primarily through the Homeowner Emergency Loan Program (HELP), which provides up to 18 months of payments 

(with a cap of $20,000 to $25,000) to the mortgage lender to assist unemployed and underemployed borrowers with their first mortgage until they 

can resume full payments on their own. Homeowners who have recently become reemployed after a stretch of unemployment may also be eligible for 

assistance to cure arrearages.

Homeowners must meet all eligibility requirements to be considered for the program. Homeowners experiencing a reduction in household income 

must have a documented hardship due to unemployment or underemployment through no fault of their own. The homeowner’s household income 

is reviewed to determine the level of assistance needed and the minimum mortgage payment that may be contributed by the borrower. Eligible 

homeowners close on a zero percent interest rate subordinate loan similar to a home equity line of credit. The loan term is for ten years, and the loan 

will be forgiven at a rate of 20 percent per year over the final five years.

To date, 188 mortgage servicers have agreed to participate in the Illinois Hardest-Hit Fund programs. Illinois homeowners who believe they may be 

eligible for these programs should visit www.illinoishardesthit.org. Additionally, homeowners seeking additional assistance with their mortgage 

can visit the website of the Illinois Foreclosure Prevention Network at www.keepyourhomeillinois.org. 

IHDA is also offering assistance through the Mortgage Resolution Fund (MRF), which uses funds from the Hardest Hit Fund to purchase delinquent 

loans in the Chicago area and modify those loans to affordable levels. The MRF is operated by Mercy Portfolio Services, a subsidiary of the national 

nonprofit organization Mercy Housing, in partnership with Enterprise Community Partners, the Housing Partnership Network and the National 

Community Stabilization Trust. This program does not take applications, and homeowners whose mortgages qualify for MRF will be contacted by 

IHDA or the partners listed above.