October 15, 2008

MacArthur Dedicates $68-Million for Foreclosure Crisis

The John D. and Catherine T. MacArthur Foundation announced Wednesday that it plans to spend $68-million in grants and low-interest loans through 2009 to help prevent Chicago neighborhoods from being devastated by the national foreclosure crisis.

The Chicago grant maker, saying its project would help 10,000 households, called it the largest effort in the United States by a private foundation to reduce the impact of the mortgage problems that are forcing many people from their homes.

“The scale of the foreclosure crisis threatens to disrupt hard-won gains in many of Chicago’s lowest-income neighborhoods,” MacArthur’s president, Jonathan Fanton, said in a statement.

The foundation said the bulk of the money, about $60-million, would be in the form of “program-related investments,” or contributions to business-like operations. These would help provide new mortgage products to struggling homeowners and help the city acquire properties that it could sell or rent to low-income families.

MacArthur will also provide more than $5.3-million in grants to help local groups offer counseling for homeowners and legal assistance for victims of fraud and for renters who are facing eviction from foreclosed properties. It said nearly 35 percent of foreclosure filings in 2007 involved multi-family properties, thus depriving renters of low-cost homes.

Loans and Grants

The spending includes:

Up to $36-million in program-related investments and $750,000 in grants for Self-Help Ventures Fund, in Durham, N.C., which offers a rent-to-own mortgage program; the National Community Stabilization Trust, an organization that acquires vacant properties and makes them available to low- and moderate-income families; and a neighborhood-redevelopment project involving the city of Chicago and Mercy Housing Inc. A $15-million low-interest deposit at ShoreBank Corporation, in Chicago, for its “rescue loan and prevention program” and a $9-million program-related investment for a mortgage program operated by Neighborhood Housing Services of Chicago. More than $4.5-million in grants to local groups offering counseling to homeowners including Neighborhood Housing Services of Chicago, the Chicago office of the Local Initiatives Support Corporation, the Spanish Coalition for Housing, and the Greater Southwest Development Corporation. About $800,000 in grants to the Legal Assistance Foundation of Metropolitan Chicago and Lawyers’ Committee for Better Housing, in Chicago, to provide legal advice to mortgage borrowers and renters affected by foreclosures. More than $2-million in grants for research and advice to the Woodstock Institute, in Chicago; the Center for Responsible Lending, in Durham, N.C.; and the MB Financial Charitable Foundation, in Chicago.