The U.S. Department of Housing and Urban Development on Wednesday announced $2 million in Chicago area funding for a program aimed at providing assistance and incentives to families struggling to achieve financial independence.
The funding comes from a total of $128 million awarded nationally through the Family Self-Sufficiency Program, the country’s largest asset-building program for low-income families. The money will be spread among 82 new and 752 recurring awardees.
A major goal of the program is to reduce peoples’ dependence on welfare assistance and rental subsidies.
“We have a program that builds wealth, incentivizes folks to lift themselves and continues to provide affordable housing,” Richard Monocchio, principal deputy assistant secretary of HUD’s Office of Public and Indian Housing and former director of the Cook County Housing Authority, said while announcing the funding at the Woodlawn Resource Center, a South Side community hub that was developed with the support of federal dollars.
About $700,000 of the $2 million awarded in the Chicago area represented new grants, with about $116,000 of that going to the Aurora Housing Authority and six multifamily housing providers accounting for the rest.
Families residing in Greenwood Park Apartments and Spring Grove Apartments on the South Side are among those who will soon gain access to an interest-bearing account if they complete the terms of a contract. The escrow account holds the difference between the rent the family pays when entering the program and the increased rent that would be charged as the family’s earned income increased.
Chicago assisted housing resident Talaria Harper said the FSS program helped her improve her credit score and work toward her goal to eventually own property.
“I will say this program doesn’t work unless you’re working,” Harper said. “I had to retrain myself mentally and financially.”
Harper added that her success was supported by a credit coach provided as part of the program. The FSS program will fund at least 1,450 such program coordinators next year, according to HUD.
About 70,000 assisted housing residents enroll in the FSS program each year, Monocchio said, and about 9,000 of them graduate and receive access to the escrow account. While 30% of participants leave the program within the first year, those who finish are 25% more likely to become homeowners, he added.
“Rewards work,” Monocchio said in an interview. “It encourages homeownership and lifts families into self-sufficiency.”
More than a quarter of all renters in Illinois are considered “extremely low income,” according to the National Low Income Housing Coalition. They also reported a shortage of rental homes affordable and available to these renters, whose incomes are at or below 30% of their area median income.
When asked why Illinois received only 1.6% of total funding for the FSS program, Monocchio said applicants are considered based on the quality of the proposal.
“Many, many applicants were qualified that we couldn’t award because of funding,” Monocchio said. “Hopefully, as we show the success of this program, it generates more enthusiasm and we can really provide family self-sufficiency to every family in assisted housing that wants it. That’s the goal.”
ostevens@chicagotribune.com
