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New mortgage loan program to help veterans, military families buy homes
CHICAGO -- State officials are launching a new mortgage loan program to help more veterans and active duty military personnel become homeowners.
Under the G-I Loan for Heroes program, which officials planned to announce today, borrowers who qualify will receive below-market interest rates for a 30-year fixed rate mortgage, money for closing costs, classes on home ownership and other assistance.
The Illinois Housing Development Authority, which is administering G-I Loan, is putting $15 million into the program for the pilot year.
"We need to do something that helps our active duty and veterans," said Deshana Forney, the executive director of IHDA.
The idea behind the program was to supplement federal assistance available to veterans and military personnel, she said. Forney estimated that up to 120 people in Illinois will become homeowners in the program's first year.
The program offers a lower-than-market interest rate for 80 percent of the home's purchase price and it offers an interest-free second mortgage for 20 percent of the purchase price, up to $40,000. G-I Loan would include up to $2,500 for closing costs and counseling on home ownership.
The IHDA offers a similar program, called Opportunity I-Loan, for poor and immigrant families.
To qualify for the G-I Loan program, applicants must not exceed specific income requirements, which vary by county.
For example, in Cook County a family of four can't have a household income exceeding $83,260 and the purchase price of the home can't be more than $325,890.
Active duty military personnel, including federally activated Illinois National Guardsmen and reservists, must be first-time home buyers to qualify. Veterans do not need to be first-time home buyers to qualify.
Applicants must also have good credit and chip in $1,000 of their own money for the down payment.
Illinois Veterans Affairs Director Tammy Duckworth said the challenges military personnel face are unique.
"Deployment is a real financial burden," said Duckworth, an Army helicopter pilot who lost her legs in combat in Iraq.
Duckworth, who took over the Department of Veterans Affairs in January after losing a bid for Congress, said many in the military take pay cuts in order to serve.
"So many of our men and women who serve in uniform are younger and it's more difficult to establish credit," she said. "It's much more difficult for them to get started. This is another way to help them put their lives back on track."