How does the Our Own Home guarantee work?
Upon approval of an Our Own Home application, the guaranteed amount is earmarked in the State of Illinois’s Our Own Home Loan Loss Reserve Fund. Should you realize a loss on the loan during the five-year period, the Treasurer’s Office will reimburse your financial institution for your losses for up to the amount guaranteed. Should you see the possibility of a potential foreclosure process taking place, please notify us by letter, fax or email. In this fashion we can work with you to see if we can help prevent it. Our ultimate goal is to prevent the foreclosure. Should the foreclosure ultimately take place, then the reimbursement can be used for any losses realized, including those associated with the foreclosure process, such as legal, administrative, resale, etc.

Is there any cost to my financial institution or to my customer?
No. Our Own Home is a free service provided to participating Illinois financial institutions and Illinois homebuyers and homeowners.

Will I be obligated to use the program or close a certain number of loans?
No. Whether or not you use the program is entirely up to you. We will never require you to approve a loan or a certain volume of loans – we simply provide you with an additional tool that you can use to approve mortgages.

Does the applicant need to be a first-time homebuyer?
No.

How can I incorporate Our Own Home into my institution’s mortgage lending?
If your institution currently only offers 80/20 loans, you can use the program’s 10 percent pledge and to offer 90/10 loans without compromising the 20 percent you previously needed to have to approve a mortgage application.

If you have a prospective borrower who is close to meeting your institution’s lending requirements but is not quite there due to credit score, debt-to-income ratio, or some other factor, you can use the Our Own Home program pledge to overcome the obstacle and approve the mortgage .

Can the program be used in conjunction with PMI?
Lenders that offer primary mortgage insurance (PMI) must utilize PMI in qualifying instances. The Our Own Home pledge cannot be used merely to reduce PMI cost, unless the cost of PMI would prevent the applicant from qualifying for the mortgage. Lenders that offer PMI may use the Our Own Home pledge where PMI would normally be used, if the borrower fails to qualify for PMI.

Can I also use the program to refinance an existing mortgage?
Yes. The homeowner must meet the same criteria as homebuyers. In addition, the homeowner must have missed at least one mortgage payment due to circumstances beyond his or her control (job loss, medical bills, etc.), and must be able to demonstrate that he or she can resume making mortgage payments.

Can I use the program to perform a loan modification?
Yes. The homeowner must meet the same criteria as those who refinance loans.

Can you give me a practical example, including what happens if I realize a loss?
Let’s say you have a customer looking to purchase a home for $100,000, and you are asking for a 10 percent down payment. The loan amount is therefore $90,000. This loan would qualify for a guarantee of $9,000. In the second year, your customer defaults on his or her mortgage. Your institution is only able to recoup $78,000, showing a loss of $12,000. Since you attached an Our Own Home guarantee to the loan, the State Treasurer’s Office will reimburse your institution $9,000, leaving you with a loss of only $3,000. Or, let’s say you recouped $85,000, leaving a loss of $5,000. In this circumstance, you would be reimbursed for the entirety of your loss.

Does the value of the guarantee depreciate as mortgage payments are made by the borrower?
No. The value of the guarantee remains the same throughout the five-year pledge.

Can our institution use the Our Own Home guarantee more then once for the same individual?
As long as the borrower can independently qualify each time, your institution may use the guarantee more then once. For example, a borrower who used the program to purchase a home may re-apply within the initial five-year pledge period and use the program to refinance or do a loan modification, provided that all normal requirements for refinance or loan modification are met. Note that you will not receive an additional five year guarantee in this scenario. If a borrower initially used the program to purchase a home and is deciding to move to another residence, he or she can re-apply provided that the eligibility requirements are met.  In this scenario, the old guarantee would no longer be in effect.  Your institution would receive a new five-year guarantee based on the conditions of the new loan if approved.

If I realize a loss on an Our Own Home guaranteed mortgage, what is the process for reimbursement?
Simply mail or fax proof of the loss to the attention of: Our Own Home Program, Bank Administrator, First Midwest Bank, at fax (815) 773-2696, for verification. Within the first five business days of the following calendar month, a check will be issued to your institution for reimbursement of your losses. The Bank Administrator does not have access to your portfolio, only loans processed through the Our Own Home.