Gov. Blagojevich Expands I-Loan Mortgage Program to Offer 40-year Loans for First-time Homebuyers

Press Release

New pilot loan offers safe, below-market rate, fixed mortgages that will help lower monthly payments for Illinois residents

As the nation's foreclosure rate continues to rise, Governor Rod R. Blagojevich today expanded the state's I-Loan Mortgage program to offer 40-year loans to help first-time homebuyers in Illinois achieve the dream of homeownership. The new I-Loan 40 Mortgage pilot program provides one more safe and affordable option for an estimated 150 low- and moderate-income residents who want to purchase their first home. As with the pre-existing 30-year I-Loan Mortgage program, the I-Loan 40 offers first-time homebuyers a below-market interest rate that is fixed.

"In today's climate when the country's foreclosure rate is at its highest, hard-working Illinois families who dream of owning their own home need all the help we can provide. This program is one more way to offer an opportunity for dozens of families to afford a safe and decent home for their children," said Gov. Blagojevich.

"The 30-year I-Loan Mortgage program has already helped thousands of hard-working families realize their dream of buying their first home. The fixed below-market interest rate ensures that families are locked in at an affordable price that helps them gain stability and build equity for the future. The 40-year I-Loan will allow us to help even more first-time homebuyers by reducing monthly costs," said DeShana L. Forney, Executive Director of the Illinois Housing Development Authority (IHDA).

IHDA is a self-supporting state agency responsible for financing the creation and preservation of affordable housing in Illinois through the sale of bonds and investment of various state and federal resources. IHDA raised $15 million through tax-exempt bond financing to support the I-Loan Mortgage program's expansion.

Expanding the I-Loan program provides another affordable option for low- and moderate-income homebuyers. They can chose between the 30-year loan, which offers a low interest rate and will be faster to repay but has a higher monthly payment, or opt for the new 40-year loan with a slightly higher interest rate that will take a little longer to pay off but reduces the monthly payment. It will also allow the homebuyer to consider a higher priced, and often larger, home.

More and more homeowners nationwide are facing foreclosure because they can no longer keep up with the instability of adjustable rate mortgages. Both the 30- and 40-year I-Loan offers fixed interest rates that are significantly lower than the market rate. In comparison, when the conventional market is offering around 6.65 percent, IHDA's 30-year I-Loan is set no higher than 6.25 percent, while the new 40-year I-Loan will be offered at approximately 6.50 percent. For some families, this could mean the difference between affording the house or not.

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