December 11, 2005
Posted online: January 6, 2006
Opportunity I-Loan program to help working
families buy homes
STATE OF ILLINOIS
CHICAGO –Building on his commitment to help working
families realize the American Dream of homeownership, Governor
Rod R. Blagojevich today launched a new mortgage program designed
to help hardworking, taxpaying individuals and families from the
immigrant and minority communities. The program, called
Opportunity I-Loan, will help those individuals and families who
do not have a traditional checking account or have not been able
to establish a credit history, qualify for low-interest mortgage
loans and buy their first home. This program will make Illinois
only the second state in the nation to provide affordable,
30-year fixed rate mortgage loans for qualifying individuals and
families that live and work and pay taxes but have no credit
history or social security numbers. The program will also offer
further protections from predatory home loans.
"Buying a home is a key first step for many working
families to start realizing the American Dream. But when you are
paid in cash, or you can't open a checking account or
establish a credit history, applying for a mortgage loan is a lot
more difficult," said Gov. Blagojevich. "That's
why we created the Opportunity I-Loan program to help Latino
families, African-American families, Asian-American families and
so many other families qualify for a loan and buy a home. Our new
program helps families build equity and security for their
future, it protects them from predatory loans, and it will help
thousands of families across Illinois build better
The Opportunity I-Loan will target populations that live and
work in a cash economy, under the radar of credit reporting
companies. These groups are traditionally wary of banks and
prefer to cash their paychecks at the local grocery store and pay
their bills in cash. Because mainstream financial institutions
cannot qualify them for mortgages, they are at the highest risk
for predatory loans, unaffordable ARM and interest-only products,
and other loans that threaten the safety of working families and
the prosperity of the communities where they live and work.
Applicants to this program must show that they have paid
income taxes for the past two years. The Illinois Housing
Development Authority (IHDA) will accept tax returns with social
security numbers or ITIN's.
Opportunity I-Loans have a below market interest rate
(currently 5.95%) for a 30-year fixed rate mortgage. The interest
rate varies depending on market interest rates but is always at
least a half of a percentage point below market interest rates.
Through the program, homebuyers are eligible for $1,000 down
payment assistance for a slightly higher interest rate.
Additional down payment assistance is available through community
organizations including Spanish Coalition for Housing and
Homebuyers using Opportunity I-Loans do not need a bank
account or a social security number to qualify for the loan,
removing major obstacles to homeownership. IHDA expects to help
100 families buy homes with $15 million in Opportunity I-Loans in
Congressmen Danny K. Davis (D-7th) and Luis Gutierrez (D-4th)
today joined with the Governor's Deputy Chief of Staff
Esther Lopez, Illinois Housing Development Authority (IHDA)
Director Kelly King Dibble, housing advocates and hundreds of
residents in Chicago's Lawndale community, to formally
announce the Governor's new mortgage program. Opportunity
I-LOAN will be implemented by IHDA as part of the state
agency's I-Loan Mortgage Program. IHDA will expand its
underwriting guidelines to accept alternative forms of credit and
the Internal Revenue Service's issued ITIN numbers.
According to US Census Bureau's Survey of Income Program
Participation and Chicago's Center for Financial Services
Innovation, 46% of all African American's are
‘unbanked' or don't have bank accounts. 34% of
US born Hispanics are similarly unbanked and a third of all
immigrants, Asian, European, Latino and other are unbanked.
"This program will break down the barriers between
conventional banks and the communities that are underserved by
them," Governor Blagojevich said.
"The Opportunity I-Loan program is the same affordable
30-year fixed rate mortgage we offer under our other mortgage
programs, and it is also at least a half percent below the market
rate," said Kelly King Dibble, IHDA executive director.
"The change we are announcing today is that IHDA will now
accept payroll check stubs, rent receipts, phone bills and other
documents that prove credit-worthiness rather than relying on
scores from credit reporting companies."
"While many people of all ethnicities are fearful of
credit card companies, it is clearly a problem in the African
American community, where check cashing storefronts thrive. But
Governor Blagojevich understands that we can't let that
fear be a barrier from the security of buying a home, or hinder a
neighborhood from growth and stability from homeownership,"
said Danny K. Davis. "This program is necessary to bring
Illinois residents into a safe mortgage before they get robbed by
"Homeownership is a central wealth-building tool and an
essential vehicle for long-term financial security and
stability," said U.S. Congressman Luis V. Gutierrez (D-IL)
"The Opportunity I-Loan program will help immigrant and
minority families tear down barriers that prevent homeownership
and provide opportunities and options for first-time buyers. This
initiative is another example of how Governor Blagojevich is
making Illinois a state where all those who work hard can have
access to the American Dream."
Juanita Irizarry, the executive director of Latino's
United and a prominent member of Governor Blagojevich's
Statewide Housing task force emphasized that "Illinois has
more than 440,000 immigrant households and that they will account
for one quarter of new homebuyers in the Chicago area. With this
program, the Governor has proactively addressed their situation,
helping them become homeowners."
Man-Yee Lee, a 34-year old British-born immigrant in Chicago
who works as a coordinator at the Chinese Mutual Aid Association
believes that the problem is with the banks, not the communities.
"I don't have a credit score because my local banks
wouldn't give me a credit card," she said at the
event today. "Even though I am perfectly legal, with a
social security number and a good job, I was denied a credit
card. I don't have a credit score and I can't get a
mortgage from a bank." Man-Yee and her husband, a US
citizen, hope to qualify for an Opportunity I-Loan.
IHDA does not originate loans directly to consumers. Rather,
to receive a home mortgage through this program, borrowers must
go through an IHDA-approved partner bank that originates
IHDA's loans. Currently seven banks are trained to accept
applications for Opportunity I-Loans. "We will continue to
train all IHDA-approved originators across the state on this
program throughout the next several months as interest grows and
resources permit," said Kelly Dibble.
The Opportunity I-Loan Program joins several other initiatives
as part of Gov. Blagojevich's commitment to affordable
Creating the Illinois Affordable Housing Task Force that put
together the 2005 Illinois' Building for Success: Illinois
Comprehensive Housing Plan that brought increased awareness to
the affordable housing needs of Illinois residents.
Signing into law the Rental Housing Support Program, the
largest of its kind in the nation.
Signing the Affordable Housing Planning and Appeals Act and
the Federally Subsidized Housing Preservation Act into law to
create and preserve more affordable housing.
Extending the Illinois Affordable Housing Tax Credit, and
increasing funding for supportive housing for people who are
homeless or mentally ill.
These actions have brought a new focus on the state's
housing needs and have expanded the resources available to create
and preserve quality, affordable homes.
About the Illinois Housing Development Authority
IHDA (www.ihda.org) is a
self-supporting state agency that finances the creation and the
preservation of affordable housing across Illinois. Since its
creation by an act of the Illinois legislature in 1967, IHDA has
allocated more than $6.4 billion and financed more than 160,000
units of affordable housing across the state. IHDA accomplishes
its mission by selling bonds, based on its own good credit, in
the private bond markets. IHDA also administers a number of
federal and state funding sources, including the Illinois
Affordable Housing Trust Fund, the Illinois Affordable Housing
Tax Credits Fund, the allocation of federal Low Income Housing
Tax Credits, HOME Investment Partnership funds and others to
finance affordable housing throughout Illinois.