Illinois Governor Creates Mortgage Program Benefitting Illegal Aliens

Published February 1, 2006

Illinois Gov. Rod Blagojevich (D) has used his executive powers to create a state-backed low-interest mortgage loan program for persons with little or no credit history, including illegal aliens.

The Opportunity I-Loans, as they are called, have a below-market interest rate (currently 5.95 percent) for a 30-year fixed-rate mortgage. The interest rate will vary but will always be at least half a point below market interest rates. A slightly higher interest rate is also available for homebuyers who receive $1,000 in downpayment assistance through the program.

The move generated praise from some groups and criticism from others, including denunciations from all four candidates for the Republican nomination for governor.

“People who are working hard, paying their taxes, are of good moral character … regardless of their immigration status, they, too, should be able to share in the American dream,” U.S. Rep. Luis Gutierrez (D-IL) told reporters at a December 11 service at New Zion Baptist Church in Chicago, where Blagojevich announced the program.

“Buying a home is a key first step for many working families to start realizing the American Dream,” Blagojevich said in a statement. “But when you are paid in cash, or you can’t open a checking account or establish a credit history, applying for a mortgage loan is a lot more difficult. That’s why we created the Opportunity I-Loan program to help Latino families, African-American families, Asian-American families, and so many other families qualify for a loan and buy a home.”

Republicans Angered

Candidates for the Republican nomination for governor, who would challenge Blagojevich in 2006, slammed what they characterized as Blagojevich’s penchant for committing the state to major initiatives with little or no discussion with state lawmakers. These include a state program to fund embryonic stem cell research, another to purchase hundreds of thousands of flu shots (that were never used), and a third to help residents obtain prescription drugs from overseas in violation of federal regulations.

One of those candidates, state Sen. Bill Brady (R-Bloomington), said he intends to introduce a bill to prohibit state-backed loans to anybody but legal Illinois residents. He said people he has met on the campaign trail are outraged over the idea of the state backing loans for illegal aliens.

“The general public is furious, to say the least,” Brady said. “I’m a state senator, and I heard about this Saturday and he announced it on Sunday.” The program went into effect the next day.

“The fiscal irresponsibility of this administration is horrendous,” said Brady. “This is another example of the state government running rampant and irresponsibly. I have never seen a governor abuse his powers as blatantly and as broadly as Rod Blagojevich has.”

Treated Better than Veterans

Jim Oberweis, a private businessman also seeking the Republican nomination for governor, was equally blunt.

“Our governor is sending a message: Break our laws and we’ll reward you with a new home,” Oberweis said. “It’s absolutely insane. We are going to reward people who are here illegally with more attractive interest rates than we give to our veterans, people who have risked their lives for our country.

“This is an individual who is out of control. He is driving business out of our state, he does these things that cost us more money, and then we don’t have enough money to fund our teachers’ pensions,” Oberweis said.

Deliberately Skirted Legislature

Gerardo Cardenas, a spokesman for Blagojevich, said the governor decided not to go to lawmakers with the program partly because of problems in neighboring Wisconsin, which launched a similar program about a year ago.

“In Wisconsin they went through the legislators to do this, and it has been back and forth with the governor and legislators,” Cardenas said. A bill that would end Wisconsin’s program is under consideration.

Cardenas said Blagojevich did not have to get the approval of lawmakers because the Illinois Housing Development Authority already has low-interest loan programs in place. This is merely an extension of existing programs, he said.

“The fact is, this doesn’t involve any general revenue funds,” Cardenas said. “It is funded through state bonds issued by the housing authority, which doesn’t require separate appropriation.”

Cardenas said it is wrong of people to focus on the fact that illegal immigrants could qualify for a state-backed loan.

“Research shows 10 percent of families don’t have a credit history, checking accounts, things like that,” Cardenas said. “They also seem to be ignoring the fact the state cannot determine who is documented or undocumented. That is for the federal government to determine.”

Employers Must Check

Ron Gidwitz, another businessman seeking the Republican nomination for governor, scoffed at the claim the state has no way to determine who is a legal or illegal immigrant. He noted he and other employers “have a responsibility to check for appropriate documentation before [we] hire. Secondly, I wonder what other limitations the governor is relaxing on other programs while adding to the risk to taxpayers. Suppose one of these illegal aliens is picked up by the government after securing a mortgage. If no one is there to pay the mortgage, who is going to pay it?”

David Loveday, spokesman for State Treasurer Judy Baar Topinka, another challenger for the Republican nomination for governor, said she also opposes the program.

“I think most people would oppose this kind of program,” Loveday said. “How would we document them? How would we keep track of them? I don’t think the governor thought this through. A lot of issues are unclear.

“Time and time again we are seeing this kind of thing from the Blagojevich administration,” Loveday said.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.