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Study Session on Homeownership Programs Part 2
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Introduction
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Staff worked in 2025 to develop recommendations on a potential homeownership program for the Village. Staff will present a recommended program and seek feedback from the Board on that recommendation.
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Recommended Action
Staff requests that the Board discuss and provide feedback on the recommended homeownership program.
Prior Board Action
The Board has taken the following prior action(s):
• ID 25-185: Study Session on Homeownership Programs.
• RES 24-167: A Resolution Adopting the Strategic Vision for Housing Plan Prepared by the Metropolitan Mayors Caucus.
• RES 24-115: A Resolution Adopting the 2024-2025 Village Board Goals as Reviewed at the July 10, 2023, July 11, 2023, July 17, 2023 and September 14, 2023 Board Meetings.
Background
Through the 2024-25 Board Goals, the Village Board outlined two initiatives to support homeownership and thereby implement goals for Racial Equity and Vibrant, Diverse, Connected Neighborhoods.
• Explore paths to homeownership with the creation of a Renter to Homeowner Program and utilizing a non-profit organization to develop the means to address the lack of equity in homeownership, including first-time home-buying counseling and potential down payment assistance.
• Implement single-family homeownership strategies to increase affordable options through the use of resources from the Village’s Housing Trust Fund.
The Strategic Vision for Housing, adopted in spring 2024, also outlines the Village's two goals related to homeownership and recommends a strategy for achieving those goals.
• GOAL: Expand the variety of homeownership opportunities
• GOAL: Respond to racial disparities in Access to homeownership
• STRATEGY: If homeownership assistance is pursued, design any program to address racial homeownership disparities
In preparation for a deeper dive by staff and discussion by the Housing Programs Advisory Committee about potential programs, the Village Board held a study session on homeownership programs on February 18, 2025. In that program, they heard from multiple speakers on different topics and aspects of homeownership. From that conversation, staff worked to develop a potential program that meets the community’s goals.
Staff proposes a homeownership program that includes five key parts.
• Hire a provider to conduct a mix of homebuyer marketing, education, and counseling activities in the Village to support households earning between 70 and 100% of AMI in purchasing in Oak Park.
• Enter into an agreement with the Town of Normal to authorize a Mortgage Credit Certificate program for eligible homebuyers in Oak Park.
• Provide forgivable down payment assistance to first-time and first-generation homebuyers with incomes at or below 120% of AMI in the amount of $6,000 for the purchase of condominiums in Oak Park.
• Opportunistically acquire properties/ units that can then be used to increase density and provide long-term affordable ownership opportunities, including through changes in the Inclusionary Housing Ordinance.
• Create lending programs for those adding density.
Staff proposes to use the following measures to assess whether these efforts are successful.
• Supporting approximately 250 homeowners earning less than 120% of AMI to access homeownership over the next 5 years.
• Increase homeownership rates by race and ethnicity to meet regional levels for Black, Asian, Latino, and multiracial households over the next 5 years.
Timing Considerations
There is no specific timing consideration associated with this item. Staff are recommending that the Village commit to the programs proposed for 5 years and then to revisit the programs at that time.
Budget Impact
Staff anticipates that the impact of the recommended program would be primarily focused on the General Fund (fund 1001) and the Housing Trust Fund (fund 2077).
The proposed downpayment assistance program would cost $96,000 per year, for a total of $480,000 over five years. Staff propose that this funding come from the Housing Trust Fund (fund 2077). The Housing Trust Fund receives approximately $200,000 in revenue each year from the short-term rental surcharge. This funding will support the ongoing cost of the downpayment assistance program.
Staff estimates that the cost to run the homebuyer education program is approximately $125,000 per year ($625,000 over five years) with funding coming from the General Fund (fund 1001). The 2026 budget (1001.46211.101.530667.0000) included funding for the cost of the first year of this program.
The proposed Mortgage Credit Certificate program does not require direct funding from the Village. MCCs are created by converting private activity bond (PAB) volume cap authority to MCC authority on a four‐to‐one basis. Only authorized state and/or local housing finance authorities are authorized to issue MCCs. The Village would enter into an intergovernmental agreement with the Town of Normal to contribute a portion of its PAB to have MCCs issued to households purchasing in Oak Park. In 2025, Oak Park’s PAB cap is approximately $6.77 million. The Village has not used its PAB allocation for several years. When the Village does not use its allocation each year, that authority automatically goes back to the state for its use.
Operating Impact
The operation of a homeownership program would have operational impacts for the Neighborhood Services team. Staff have attempted to minimize those impacts by heavily relying on contractors to carryout critical work, leaving staff to monitor contracts and process payments. Staff propose that homebuyer education be done by a contractor. The Mortgage Credit Certificate program requires little involvement from Village staff beyond the processing of the resolution each year.
The greatest potential impact is from a downpayment program. While we would seek a contractor to manage it, if we were unable to find one the Village would need to look more closely at the staff capacity in the Neighborhood Programs Division and assess whether an additional staff person is needed.
DEI Impact
The Board’s adopted frameworks call out that any potential homeownership program must:
• Respond to racial disparities in access to homeownership.
• Expand the variety of homeownership opportunities.
Staff have designed the proposed homeownership program to address both points based on research showing that racial/ethnic barriers to homeownership include process, finances, and availability. The proposed program includes measuring the outcomes using two success measures:
• Supporting approximately 250 homeowners earning less than 120% of AMI to access homeownership over the next 5 years.
• Increasing homeownership rates by race and ethnicity to meet regional levels for Black, Asian, Latino, and multiracial households over the next 5 years.
Community Input
The initial planning document from which these recommendations came, the Strategic Vision for Housing, was developed with community input. Community was involved in the February 2025 Boad study session on this topic. The recommendation program was reviewed and discussed with the Housing Programs Advisory Committee at its August, September, and October 2025 meetings.
Staff Recommendation
Staff recommends that the Board support the proposed program.
Advantages:
• This action provides a range of homeownership interventions to support potential buyers who respond to identified barriers in the home purchase process and exacerbate racial/ethnic homeownership disparities.
• This action includes success measures to determine whether the interventions are meeting the Village’s goals of running such a program.
Disadvantages:
• The program will require an ongoing financial commitment from both the General Fund and Housing Trust Fund.
• The program will not create permanently affordable ownership opportunities.
Alternatives
Provide an alternative direction to staff’s recommendations on homeownership program elements.
Advantages:
• This action can customize next steps based on Board direction.
Disadvantages:
• This action may require additional research by staff prior to coming back with a recommended program.
Anticipated Future Actions
Following the Board’s discussion, staff will bring back a motion to adopt the proposed homeownership program and staff will being working on procurement/ contracting needed to move the recommendation forward.
Prepared By: Jonathan Burch, Assistant Village Manager/ Neighborhood Services Director
Reviewed By: Jack Malec, Assistant to the Village Manager
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Presentation
2. Homeownership recommendation memo
3. Illinois Realtors policy brief on real estate transfer tax refund policy