Housing Bubble
Rural Guarantee housing initiative launched in Illinois
March 11, 2003
The Partnership for HomeOwnership (PFHO), a non-profit foundation of the Illinois Association of REALTORS (IAR), announces the 2003 funding for the award winning Rural Guarantee Housing Initiative (RGHI). RGHI is for qualified first-time homebuyers or those who have not owned a home in the past three years. Qualified buyers can purchase affordable single-family homes in rural counties at below market interest rates with a minimum down payment and closing costs.
Toni Sherman, President of the IAR, comments, "We are pleased that our Foundation has once again received funding for it's innovative rural program. Affordable housing continues to be a primary focus of our organization. With this funding, the Foundation will continue to assist an often overlooked segment of potential home buyers in Illinois and helps many achieve the American dream of home ownership."
Financing for this state-wide program includes more than $15,000,000 from tax-exempt mortgage revenue bonds issued by the Illinois Housing Development Authority. Loans are insured by USDA Rural Development and are originated by participating approved local lenders. Rural Development State Director, Doug Wilson states, "We're pleased to be a component of this federal, state and non-profit program. This program is a great opportunity for rural families to buy their first home. Home ownership strengthens families, communities and our rural economy."
Donna Thomas, President of the PFHO said, "This loan program has been extremely successful for several reasons. The buyers are counseled on credit issues, including restructuring debt and correcting credit file errors. We put them in the best possible position to purchase and maintain a home. Our smaller rural communities are effectively strengthened by building 'safety and soundness' repairs into the loans, particularly important in rural areas with aging housing stock and little-to-no affordable new construction under $100,000. Loans that require a small down payment are generally viewed as carrying a higher risk, especially now. We can show that pre-purchase education and debt counseling can reduce default rates."
Eligible buyers, with annual income up to $43,000 (1-2 persons) or $49,000 (3+ persons), may qualify for a 30 year fixed rate loan currently at only 5.25% with no points. Income limits are higher in selected counties. All buyers must have a 1% or $1,000 down payment (whichever is greater). Grants up to $1,500 towards closing costs are awarded to qualifying buyers who participate in the program.
Prospective buyers interested in the RGHI should contact a "certified" REALTOR, real estate agent or lender in their area to apply for the program. All qualified buyers must attend a homebuyer education course prior to writing a contract to purchase. Homebuyer education sessions will be available in many areas of the state. More information can be found at www.pfho.org or by contacting the USDA Rural Development office nearest you.
Source: The Partnership for HomeOwnership
