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Concur with the Housing Programs Advisory Committee and Approve the Resolution Authorizing Housing Loan Forgiveness
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Introduction
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This item requests Village Board approval and authorization to forgive the remaining $18,804 balance on a loan issued in 2001 through the former Community Development Rehabilitation Loan Program. The original loan amount was $35,804, and the borrower has repaid $17,000 to date.
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Recommended Action
Approve the resolution.
Prior Board Action
The Board has taken the following prior action(s):
• RES 24-298: A Resolution to Approve a Community Development and Housing Loan Forgiveness Policy
Background
Historically, requests to forgive, defer, or modify Village loans were considered on an individual basis without a formal application process or consistent evaluation standards. To create a clearer and more equitable process, staff developed the Community Development and Housing Loan Forgiveness Policy. The Village Board considered and adopted the policy on October 8, 2024, through Resolution 24-298. The policy establishes eligibility requirements, application procedures, evaluation criteria, advisory committee review, and a formal recommendation process while maintaining the Village Board’s final decision-making authority.
This is a request for forgive a Community Development Rehabilitation program loan. Historical program materials indicate that the Community Development Rehabilitation Loan Program provided financial assistance to income-qualified owner-occupants to correct code violations, address property deficiencies, and complete necessary residential improvements. The program later became the Village’s Single-Family Rehabilitation Loan Program and is currently the Residential Rehabilitation Program. This loan was funded with Community Development Block Grant funds.
In 2001, two related family members took out Community Development Rehabilitation loans. One was an amortizing loan in the amount of $17,000 that was paid monthly. The other one was a deferred zero-interest loan in the amount of $18,700 that was due either upon title transfer or in August 2021. Final payment was made on the amortizing loan in December 2021 and the loan was released in June 2024. In May 2021, Neighborhood Services sent notice to the homeowners that their deferred loan was due in August 2021. The deferred zero-interest loan remains outstanding.
In the loan forgiveness application, the applicant reported that payment of the remaining $18,804 balance would create a significant financial hardship. The applicant is a senior homeowner living on a fixed income and stated that the property continues to serve as the household’s primary residence. The applicant is requesting forgiveness of the remaining balance to support continued housing stability.
Timing Considerations
The deferred payment loan due in 2021 remains outstanding and potentially subject to action by the Village to seek repayment.
Financial Impact
Loan payoffs for this program go into the Revolving Loan Fund (Fund 2020). The current balance of this fund is more than $290,000 to support additional rehabilitation loans.
Operations Impact
There is no operating impact associated with this item. The item aligns with the department’s core service delivery.
DEI Impact
The housing and community development loan forgiveness policy was designated to benefit households, indirectly and directly, with low and moderate incomes.
Community Input
On June, 17 2026, the Housing Programs Advisory Committee reviewed the request and voted to recommend that the Village Board approve and authorize forgiveness of this Community Development Rehabilitation Loan.
Staff Recommendation
Approve the resolution.
Advantages:
• The outstanding loan is addressed, clarifying the financial situation for the owner.
Disadvantages:
• There are no disadvantages to this action.
Alternatives
Alternative 1:
The Board can reject the resolution.
Advantages:
• There are no advantages to not approving the resolution.
Disadvantages:
• The loan remains outstanding to the Village, as the borrower is unable to settle it.
• The loan remains unpaid to the Village, and the balance due will increase per the clause noted in the original mortgage.
• The borrower may face additional economic barriers impacted by loan payment.
Anticipated Future Actions
If approved, staff will proceed with recording the loan release.
Prepared By: Nisha St. Louis, Neighborhood Services Programs Manager
Reviewed By: Jonathan Burch, Assistant Village Manager/Neighborhood Services Director
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Resolution
2. Loan Forgiveness Application