MacArthur Commits $68 Million to Foreclosure Prevention and Mitigation in Chicago
October 15, 2008 | Press release | Community & Economic Development, Impact Investments

To help combat the growing lending crisis and the rise of foreclosures in Chicago, MacArthur is investing $68 million in grants and low-interest loans in foreclosure prevention and mitigation efforts in local neighborhoods. The Foundation expects its investment to leverage more than $500 million in capital and to assist 10,000 households, including counseling to 6,000 borrowers and prevention of 2,700 foreclosures by 2010. MacArthur’s initiative represents the largest effort in the United States by a private foundation to address the foreclosure crisis.

“The scale of the foreclosure crisis threatens to disrupt hard-won gains in many of Chicago’s lowest-income neighborhoods,” said MacArthur President Jonathan Fanton. “Since MacArthur’s inception 30 years ago, we have supported efforts to make cities better places and to help low-income neighborhoods build their assets and their potential. No where is this work more urgent and no where is it more important to us than in the city we call home.”

MacArthur grants are supporting prevention efforts, including extensive outreach and counseling for homeowners and legal assistance for victims of fraud or other valid claims. Program-related investments, which are typically low-cost loans, will help make new mortgage refinancing products available to help owners keep their homes. Legal assistance will help renters facing eviction to keep their homes or gain more time to find alternate rental housing.

The Foundation’s investment also will help stabilize neighborhoods hard hit by vacancy and foreclosure. The City of Chicago expects to collaborate with Mercy Housing Inc., to develop the capacity to acquire for resale, rental, rent-to-own, and redevelopment as many as 3,500 properties in Chicago’s hardest hit communities. The redevelopment work will be done in collaboration with numerous developers and community partners.

Recent analyses by the Woodstock Institute indicate that nearly 35 percent of foreclosure filings in 2007 occurred in two-to-six unit, multi-family properties. Therefore, many renters are losing their homes as a result of foreclosures. With the time it takes for properties to go through the foreclosure process, rental units are lost from the affordable inventory, at least for a time. MacArthur’s project funds outreach to and legal advocacy and representation for renters in foreclosed buildings to help them stay in their homes and limit the loss of affordable housing in the city.

MacArthur’s Board and staff began planning this initiative in 2007 and the Foundation started awarding grants earlier this year. Approximately two-thirds of the funding will be provided in 2008 with the rest to come in 2009.

MacArthur’s foreclosure prevention and mitigation project brings together numerous partner organizations and, at this time, includes the following elements:

Outreach and Counseling

Financial Products

  • A $15 million program-related investment in the form of a low-interest deposit at ShoreBank for the bank’s $100 million Rescue Loan and Prevention Program;
  • A $9 million program-related investment for the $150-million mortgage program operated by Neighborhood Housing Services of Chicago, in partnership with Park National Bank, MB Financial, the City of Chicago, and other financial institutions;
  • Up to $36 million in additional program-related investments and $750,000 in grants for a mortgage program by Self-Help Ventures of North Carolina that offers a rent-to-own option; the National Community Stabilization Trust, a collaboration of the Housing Partnership Network, NeighborWorks America, Enterprise Community Partners, and the Local Initiatives Support Corporation; and other efforts to help strengthen Chicago neighborhoods by speeding the purchase, repair, and disposition of foreclosed properties;

Research and Technical Assistance

  • $1.5 million in grants to the Woodstock Institute and other organizations to collect and analyze data on foreclosures in Chicago neighborhoods;
  • $500,000 in grant funding to the Center for Responsible Lending for national and state policy advocacy and technical assistance for local entities; and
  • $250,000 to the MB Financial Charitable Foundation for technical assistance to financial institutions engaged in creating new mortgage products and strategies.

MacArthur supports creative people and effective institutions committed to building a more just, verdant, and peaceful world. In addition to selecting the MacArthur Fellows, the Foundation works to defend human rights, advance global conservation and security, make cities better places, and understand how technology is affecting children and society. MacArthur has deep roots in Chicago, where it has its headquarters, and where John D. and Catherine T. MacArthur lived. Over the past 30 years, the Chicago region has received the largest share of MacArthur’s philanthropy: nearly $720 million to 860 organizations and individuals.

Stay Informed
Sign up for periodic news updates and event invitations. Check out our social media content in one place, or connect with us on Twitter, Facebook, YouTube, and LinkedIn.