EAST CHICAGO | A local lender has joined the city's popular homeowner assistance program, promising even lower mortgage payments for potential buyers.
The Redevelopment Commission has approved a Centier Bank plan for financing owner-occupied housing as part of the city's Homeowner Incentive Program.
For the past five years, buyers have been eligible for up to $25,000 toward the purchase of a newly built house, with $10,000 available for existing residences in the form of a forgivable no-interest second mortgage.
The Centier "emerging markets" plan provides for lower upfront costs as well as reduced monthly payments compared to the previous federal funding for the mortgages, said Kristine Clark, mortgage loan officer with Centier.
Buyers would need to borrow $1,000 less and can expect to pay $30 less per month through the Centier plan than with the Federal Housing Authority financing of a $70,000 home, Clark said, a savings of nearly $11,000 over the life of the loan.
"It really does have a great benefit for the client," she said.
Under terms of the plan, Centier would hold the first and second mortgages on the property, said Nicholas Smith, city Redevelopment Department compliance administrator, and the city would hold a third mortgage.
That incentive program mortgage would be forgiven if buyers stay in their new home for 10 years, or in an existing home for five years.
Centier was the only lender to approach the city looking to partner in the program, Smith said.
The purchase assistance plan was expanded this year to include buyers of all income levels and properties everywhere in the city.
Previously, the federal program provided incentives only to lower-income buyers of homes in the North Harbor area.
About two dozen potential homebuyers are in the process of applying for participation in the program.