New program helps Illinois families get home loans
In an effort to help Illinois families avoid falling victim to predatory lenders, Illinois State Treasurer Judy Baar Topinka has announced a new statewide program to help people buy a home or keep their home from being foreclosed.
Our new program titled, Our Own Home, will help many middle to lower-income families achieve the American dream of home ownership without the nightmares caused by predatory lenders, said Topinka. Through Our Own Home, were working with financial institutions across the state to help people overcome their credit problems, get the financial help they need and settle into their own homes, she added.
The program acts like a buying partner, said Topinka. We tell lenders that well back up your investment with funds from our program. Our goal is to give lenders the reassurance they need to make the loan, she added.
Our Own Home will pledge up to 10 percent of the value of the loan to the bank as security for the borrowers loan. The money is never actually given to the bank; rather, it stays in the Our Own Home Fund. The bank would only receive the amount pledged if the borrower defaults on the loan.
We know there will always be individuals with less than perfect credit who need access to capital for things like home mortgages, said Topinka. Banks take a greater risk in loaning money in these situations, but this new program provides financial institutions with an incentive to consider offering conventional loans to less conventional borrowers without putting themselves at unnecessary risk, Topinka added.
In addition to helping families purchase a home, the program also helps those individuals who have missed a couple of mortgage payments but have resumed making their payments again.
All too many people have found themselves in a situation where they become easy targets for lenders who loan money under unfair loan terms and at outrageous interest rates, and then when payments are missed, the original loan is refinanced at even higher interest rates. This vicious cycle can often end up leaving you with a shattered credit history and losing your home, said Topinka.
Participating banks would work with the borrower to refinance their loan or extend an additional loan for the amount of the arrearage.
To qualify for the Our Own Home program, you must be a homebuyer who does not qualify for a conventional mortgage, and your annual household income cannot exceed $75,000. Our Own Home may only be used towards loans for single family homes with an appraised value that does not exceed the countys median home value where the home is located or $125,000, whichever is less.
For more information about how to sign up for the program, call 1 (888) 803-HOME or check the website at www.ourownhome.net.