Crisis at affordable housing financer

Crain's Chicago Business reports:

Lenders and local government officials are seizing control of nearly 2,000 Chicago apartments amid a fiscal crisis at the Chicago Equity Fund, the city's largest financer of affordable housing.

About 1,300 apartments run by the non-profit Chicago Equity Fund (CEF) and a sister company, IMC Property Management LLC, are in foreclosure, and another 700 have loans that are being worked out with lenders, estimates Jeff Frankwick, a consultant to the organization and its former chief operating officer. Real estate experts put the total market value of the properties at around $60 million.

The recent troubles raise doubts about the CEF's ability to continue financing tax-credit housing projects. William W. Higginson, a former Presbyterian minister who founded the fund in 1985, resigned as its president and chief executive last October as the group's financial picture darkened.

Look how this sort of artificial financing props up real estate.We expect to hear more of these stories.I guess some real estate markets, like Chicago, aren't built on real fundamentals.