December 29, 2020 – To help overcome obstacles like saving enough money for a down payment and qualifying for a mortgage, the Illinois Housing Development Authority developed the SmartBuy and Opening Doors programs. Housing Action Illinois Policy Director Bob Palmer said that IHDA is making a targeted effort to market these programs in disinvested communities like communities of color.
“They can’t get a loan on their own because they find out they don’t have the down payment saved or maybe based on the underlying criteria that the bank is using they can’t qualify for enough of a loan to buy a house in a community that they want to live in,” Palmer said.
When announcing these programs in a press release from the Housing Development Authority (HDA), the governor pointed out that financial disparities have historically prevented certain communities from owning a home. Palmer said these programs will help them build generational wealth.
“There are huge gaps particularly for Black households in household wealth, and one of the factors in that is lower homeownership,” Palmer said.
The programs are a new approach to addressing affordable housing in Illinois, said Palmer.
“One really innovative component of these programs is that it can assist people with student loan debt,” he said.
The press release stated that 17% of Illinois residents carry student loan debt averaging at nearly $30,000 per person. This can become increasingly burdensome when trying to save for a down payment.
For people with at least $1000 in student debt, the Smart Buy program will provide 15% of the purchase price up to $40,000 in assistance, according to the HDA’s press release. Both programs provide 30-year fixed interest rate mortgages and help with down payments. Between the two programs, approximately 7,000 people will be helped to buy a house with a 60 million dollar state allocation. Palmer says the programs are intended to demonstrate their effectiveness if the state had more resources and could scale them up.
