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Have you been the target of a predatory home loan? Have you tried and failed to refinance your loan so that your payments don't bust your monthly budget? Then the new NORMAL , Neighborhood Ownership Recovery Mortgage Assistance Loan, program might be for you. This pilot program will hit Chicago's neighborhoods this summer but the pool of funds is limited.

Known for their work turning abandoned buildings into family homes in Chicago's low-income neighborhoods, Neighborhood Housing Services created the NORMAL project in partnership with the City of Chicago. Thirteen lenders signed on, from Bank One to TCF National Bank Illinois.

"They all share in the risk," said Jim Wheaton of NHS. Each bank contributes from $100,000 to $400,000 to a loan pool. This reservoir of funds allows NHS to refinance qualified homeowners. The agency administers the loan, and the City of Chicago pays the administrative costs. The borrower gets a fixed-rate, more affordable loan.

After NHS staff negotiate a settlement that deletes predatory fees charged to the borrower, the loan shark gets paid off a percentage of the original loan. And the neighborhood keeps another homeowner from becoming a foreclosure statistic. NHS also provides homeowner counseling and budgeting assistance.

The program came about in part after NHS staff noticed an increase in predatory home loans because of their foreclosure intervention program. Increasing numbers of foreclosure cases since 1996 involved outsized fees, balloon payments and other predatory practices.

"They market very aggressively in our neighborhoods" Wheaton said. "Someone needs $4,000 to fix their porch and ends up losing their home." Wheaton himself received stacks of direct mail advertisements that look like checks or dollar bills.

"This is not a subsidized alternative," Wheaton warns. "We put people in a situation where they can pay off the loan. It still might not be affordable for the family." The refinancing will relieve the worst pressure but the homeowner will still have to pay back the loan. Wheaton also hopes that applicants will find the NORMAL program before they enter foreclosure, because it's much easier to refinance before things are at that point.

At this time $2 million is in the refinancing pot. "That's only enough for about 12 loans," said NHS' Marcy May. They are unsure how to market the program because they expect a high demand already.

The first refinanced loan closed early in June. The recipient declined to speak with DISCLOSURE, but NHS says that everything is going well. If this pilot program proves to be a success $10 million will be added to the loan pool over the next four years through its revolving structure.