By State Stature, the Village of Arlington Heights must utilize, reserve, or cede its 2024 Home Rule Volume Cap by May 1, 2024, or the authority to allocate this bonding cap will revert to the State of Illinois. The Village is allocated Volume Cap based on $125 per resident of the Municipality for a 2024 total of $9,399,375. At this time, the Village has no uses for the 2024 Volume Cap other than the opportunity described below and has received no other requests for purchase of our 2024 Volume Cap.
The Village has the opportunity to participate in collaboration with other Illinois
municipalities in offering the Assist Homeownership Program. Through the Assist
Homeownership Program, income-eligible, credit-worthy home buyers may receive
assistance with their closing costs and down payments. They may also qualify for the Mortgage Credit Certificate (MCC) program through which program participants may receive an annual federal income tax credit for the life of the mortgage thereby reducing the annualized cost of debt service.
The Village has ceded its Volume Cap for this program many times when there were no other requests. In 2022, the number of Arlington Heights loan originations was 14 with an average mortgage amount of $163,510 and a total in mortgage loans of $2,289,145. In 2021, the number of loan originations in Arlington Heights was 16 with an average mortgage loan of $158,659 and a total in mortgage loans of $2,538,545.
A year ago, the Village ceded 2023 Home Rule Volume Cap for this program. Unfortunately, due to housing market conditions and the elevated mortgage interest rates, there were no loan originations in 2023. It is expected that loan originations will resume in 2024 as the mortgage interest rates level-out. Based on past success of this program, absence of other requests for the bond cap, and the reversion to the State is the bond cap is not used, staff recommends ceding the 2024 Home Rule Volume Cap for the Assist program.
Only the ceding of the 2024 Home Rule Volume Cap is required for Village residents to participate in the Assist Program. There are no costs to the Village, and the program is administered by private home mortgage lenders.
RECOMMENDATION
It is recommended that an Ordinance Approving the Transfer of Volume Cap in Connection with Private Activity Bond Issues, and Related Matters, be approved.