ORDINANCE

WHEREAS, the City of Chicago (the "City") is a home rule municipality as described in Section 6(a), Article VII of the 1970 Constitution of the State of Illinois, and as such may exercise any power and perform any function pertaining to its government and affairs; and

WHEREAS, the lending practices of certain entities have been identified as causing problems in the City, as these entities have made loans to home owners which the owners do not have the ability to repay, and the home owners are often unable to maintain ownership of their property because of foreclosure or other remedies pursued by lenders; and

WHEREAS, Neighborhood Housing Services of Chicago, Inc., an Illinois not-for-profit corporation ("NHS"), and Neighborhood Lending Services, Inc., an Illinois not-for-profit corporation ("NLS"), have developed a program, known as the Neighborhood Ownership Recovery Mortgage Assistance Loan Program (the "Program") under which home owners will have access to loan funds to repay such loans, so that the loss of home ownership and property abandonment that often follows foreclosure can be prevented; and

WHEREAS, the Program also provides that Program loan funds will be available for these home owners who have obtained such loans to repair and rehabilitate their homes, in order to preserve the property and stability of the neighborhood, and to encourage home owners' commitment to their neighborhoods; and

WHEREAS, NHS and NLS have identified several lending institutions who will participate in the Program ("Participating Lenders") by providing funds for a pool of loan funds, to be administered by NHS and NLS; and

WHEREAS, as of the date hereof, the Participating Lenders are Bank One, Marquette National Bank, LaSalle Bank National Association, Household Bank FSB, Harris Trust and Savings Bank, Harris Bank - Argo, Private Bank and Trust Company, Manufacturers Bank, TCF National Bank Illinois, Bank of America, Citibank FSB, Community Savings Bank, Pullman Bank and The Northern Trust Company; and

WHEREAS, the City proposes to enter into an agreement (the "Agreement") with NHS and NLS pursuant to which NLS and NHS shall originate, approve and service loans under the Program and the City will assist in the implementation of the Program; and

WHEREAS, the City, through DOH, desires to participate in the Program by providing funds for the following purposes, on terms and conditions set forth in the Agreement: (i) provide funds for the interim financing of loans under the Program until the Participating Lenders have provided funds; (ii) provide funds to be used as a loan loss reserve fund for the benefit of the Participating Lenders; and (iii) provide funds to pay NHS and NLS for their administrative costs incurred in administering the Program; and

WHEREAS, the City and NHS entered into an Agreement regarding the City's Energy Loan Fund Program (the "ELF Program"), dated as of January 1, 1991, and thereafter extended to December 31, 1997, under which NHS would use funds provided by the City to make loans to homeowners to provide funds for home improvements resulting in energy conservation, and would collect loan repayments on behalf of the City (any such funds referred to herein as the "ELF Repayment Funds"); and

WHEREAS, the City funds provided under the ELF Program consisted of corporate funds in the amount of $1,300,000 (the "Corporate ELF Funds"), and $650,000 from Community Development Block Grant Funds, Program Years XVI and XVII; and

WHEREAS, the City proposes to hereby authorize the use of up to $1,200,000 for the Program (all such funds, along with the interest earned described below, so authorized referred to herein as "Program Funds"), with the source of $1,200,000 of Program Funds to be (i) all current and future ELF Repayment Funds derived from the repayment of loans made under the ELF Program from Corporate ELF Funds ("Corporate ELF Loan Repayment Funds"), and (ii) other funds of the City as may be appropriated from time to time; and

WHEREAS, the City proposes to hereby authorize the use of any interest earned on funds held in the Program Funds Account (as defined in the Agreement), to be used for the Program; and

WHEREAS, in connection with the Program, the City proposes to hereby appropriate the amount of $550,000, as and when received by the City as Corporate ELF Loan Repayment Funds, for use in the Program pursuant to the Agreement; now, therefore,

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:

SECTION 1. The above recitals are expressly incorporated in and made a part of this ordinance as though fully set forth herein.

SECTION 2. Corporate ELF Loan Repayment Funds in the amount of $550,000, as and when received by the City, are hereby appropriated for use by the City for the Program pursuant to the Agreement.

SECTION 3. Subject to the approval of the Corporation Counsel, the Commissioner of DOH (the "Commissioner") is hereby authorized to execute and deliver the Agreement, in substantially the form attached hereto as Exhibit A, with such changes therein as the Commissioner shall approve, without changing any essential terms of the Agreement (execution of the Agreement by the Commissioner constituting conclusive evidence of such approval), and to enter into and execute all such other agreements and instruments, and to perform any and all acts as shall be necessary or advisable in connection with implementation of the Agreement and the terms and program objectives of the Program.

SECTION 4. To the extent that any ordinance, resolution, rule, order or provision of the Municipal Code of Chicago, or part thereof, is in conflict with the provisions of this ordinance, the provisions of this ordinance shall control. If any section, paragraph, clause or provision of this ordinance shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this ordinance.

SECTION 5. This ordinance shall be in full force and effect from and after the date of its passage.