Illinois Hardest Hit Recapture Agreement: What You Need to Know

Illinois is one of the states that was hit the hardest by the Great Recession. Unemployment and foreclosure rates skyrocketed, leaving many homeowners struggling to keep up with their mortgage payments. In response, the federal government created the Hardest Hit Fund (HHF) to assist homeowners in states that were particularly affected by the recession. However, after the recession ended, the HHF was left with unspent funds, prompting the federal government to demand that the states return the unused money. This is where the Illinois Hardest Hit Recapture Agreement comes into play.

What is the Illinois Hardest Hit Recapture Agreement?

The Illinois Hardest Hit Recapture Agreement is a program that was put in place to comply with the federal government`s demand that the state return unused HHF funds. Under the agreement, homeowners who received mortgage assistance under the HHF program are required to repay a portion of the assistance they received. This repayment is called recapture.

How does recapture work?

Recapture is based on a percentage of the initial assistance received, and the percentage varies depending on the amount of assistance received and the number of years the homeowner has remained in the property. The recapture percentage ranges from 0% to 100%. Homeowners who have lived in their homes for less than five years are generally subject to higher recapture percentages than those who have lived in their homes for longer periods.

What are the requirements for recapture?

To be eligible for recapture, homeowners must meet the following requirements:

1. They must have received assistance through the HHF program.

2. They must still be the owner of the property for which they received assistance.

3. They must be able to make payments on their recapture obligation.

4. They must be current on their mortgage payments, property taxes, and homeowners insurance.

What are the consequences of not repaying the recapture obligation?

If a homeowner fails to repay their recapture obligation, the Illinois Housing Development Authority (IHDA) may impose a lien on their property. This lien would give the IHDA the right to demand repayment of the recapture obligation if the property is sold or transferred.

How can homeowners get help with recapture?

Homeowners who are struggling to repay their recapture obligation may be eligible for assistance through the Hardest Hit Fund program`s Mortgage Payment Assistance (MPA) program. The MPA program provides assistance to eligible homeowners to help them become current on their mortgage payments and avoid foreclosure.

Conclusion

The Illinois Hardest Hit Recapture Agreement is a program that was put in place to comply with the federal government`s demand that the state return unused Hardest Hit Fund funds. While it may be a burden for homeowners who have received assistance through the program, it is important to keep in mind that the funds were intended to provide much-needed assistance during an economic crisis. Homeowners who are struggling to repay their recapture obligation should contact the Illinois Housing Development Authority to explore their options for assistance.