Democratic candidate for Illinois State Treasurer Justin Oberman today announced his plans to use the State Treasurer’s office to make it easier for Illinoisans to buy homes.
Even with home loan insurance from the Federal Housing Administration (FHA), the Department of Veteran Affairs, Fannie Mae, or Freddie Mac, many banks are requiring buyers to make a down payment of 10-20% of the purchase price. This is keeping most buyers out of the market, even if they have the ability to make mortgage payments.
Furthermore, many first-time homebuyers who have signed contracts to purchase homes or condominiums during pre-construction are forfeiting earnest money deposits to developers. “The Treasurer can work with banks to lower the down payment threshold and get the housing market working again,” said Oberman.
“The Illinois State Treasurer, as the chief investment officer of the State of Illinois, can and should work with banks to issue second-lien loans to those who have the ability to repay, and if elected, I intend to utilize this power to benefit all Illinoisans,” Oberman said.
The Illinois State Treasurer manages more than $17 billion and many banks operating in Illinois vie for the privilege of holding the State’s deposits and providing financial services. “If elected, I will favor banks and other lending institutions that develop and implement second-lien loan programs that will bridge the gap between what is guaranteed by federal insurance or guarantee, and 97% percent of fair market value of an individual’s primary residence. This program must, however, be financially responsible, and, therefore, will only be available to those individuals who have the ability to repay all of their existing financial obligations.”
Coupled with his efforts to encourage banks to provide second-lien loans, Oberman is also committed to working with banks and educating homeowners to make sure that prospective buyers are not taking on too much debt. Banks should make sure that any such loans they issue, when combined with the primary loan, do not result in the borrower exceeding industry-standard debt to income ratios.
“This is yet another example of how the State Treasurer can help improve our economy and help taxpayers across the state create better lives for themselves. I look forward to working with homebuyers on this when I am State Treasurer.”
Oberman’s candidacy has been endorsed by former Congressman and Judge Abner Mikva and former U.S. Senator and State Treasurer Adlai Stevenson. Sen. Stevenson recorded a radio ad for the campaign that is running now; it can also be heard on the campaign web site at www.obermanforillinois.com.