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Putting a Roof Over Illegal Immigrants
A state program in Illinois helps migrants get mortgages -- often at a discounted rate.
By P.J. Huffstutter, Times Staff Writer
May 11, 2006

MINOOKA, Ill. — The emerald-green lawn was neatly mowed and the garden pansies swayed cheerfully in the wind. Mothers pushing baby strollers along the tree-lined streets waved to Josefina Olvera as they passed by her family's newly constructed two-story home about an hour southwest of downtown Chicago.

The Olveras, illegal immigrants who crossed the Mexico-U.S. border nearly 13 years ago, had longed for this part of the American dream — complete with a basketball hoop in the driveway and a barbecue in the backyard.

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Because of a housing pilot program run by the state of Illinois, as well as a growing interest among banks to tap into the burgeoning market of illegal immigrants, families like the Olveras are able to get a mortgage — sometimes at a discounted interest rate.

"We always wanted a place where the kids could go to a good school," said Olvera, 39, who works busing tables at a nearby restaurant. "We wanted a shorter commute to work…. And now, we can afford to do it."

The program, Opportunity I-Loan, was launched late last year by Gov. Rod Blagojevich, a Democrat, and the state Housing Development Authority. The agency is charged with helping low-income families own homes.

The goal of Opportunity I-Loan is to help make it easier for people who fall under the credit reporting and banking industry's radar to obtain home loans, said Bryan Zises, spokesman for the Housing Development Authority. This type of person tends to be wary of banks and prefers to pay bills in cash. They also, Zises said, are often vulnerable to predatory loan scams.

Unlike a traditional mortgage application, the program allows people to use rent receipts, pay stubs, utility bills and letters of recommendation from landlords to prove their credit reliability. They also need to have proof of paid taxes. For people who don't have a Social Security number — such as illegal immigrants — the program will allow them to use tax returns with federally issued Individual Taxpayer Identification Numbers.

"If they're living here and paying taxes here, why can't they buy a house here?" Zises said. "Our responsibility is to the communities and families that work and live in Illinois, not to patrol who is or is not here legally."

The state's unusual effort to help illegal workers become more rooted in their communities is happening as the role of government in immigration continues to be hotly debated.

"The government is putting a lot of resources at the border. But then, they're subsidizing the people that are already here," said James P. Smith, a senior economist with the Rand Corp., a nonpartisan think tank based in Santa Monica. "It's an inherent contradiction."

Opportunity I-Loan is, by all accounts, a modest effort.

An estimated $15 million in loans, financed through bonds sold by the state, has been set aside to help about 100 families buy homes this fiscal year, Illinois housing officials said. It's a small percentage of the authority's total mortgages: For fiscal 2004-2005, the agency funded about $201 million in loans.

One of the key attractions, housing officials say, is the interest rate. The program is offering fixed-rate, 30-year mortgages with below-market interest rates — as much as 1% less, Zises said.

Interest in the little-known program has been growing: About 40 of the Opportunity I-Loans have been allocated, and dozens of applications are waiting to be reviewed. Many of them are for houses in Chicago and the surrounding area, housing officials said.

"We've had people apply for the program who make less than $20,000 a year. Mostly, it's families where both parents work one or two jobs each and earn $40,000 to $55,000 a year," said Neil Christensen, vice president of lending for Hemlock Federal Bank. The bank, based in Oak Lawn, is one of several financial entities in the Chicago area that are taking part in the program.

The program has drawn fire from critics who consider such aid programs an incentive to immigrate illegally into the U.S.

"It's an outrage that the state is helping people who have no legal right to be in the state," said Ira Mehlman, spokesman for Federation for American Immigration Reform, which supports tougher enforcement of immigration laws. "If you're saying yes to one person, you're saying no to another. I'm sure there are thousands and thousands of families in Illinois who would love to be getting those loans."

Much of the reason behind the program has been the state's steadily growing number of Latino immigrants. In 1990, Hispanics made up 7.9% of Illinois' 11.4 million residents, according to census statistics. By 2000, nearly 1.5 million Hispanics were living in the land of Lincoln — 12.3% of the state's population.

Wisconsin, which also had seen a rise in Latino immigrants, launched a similar program in 2004. Called the Immigrant Lending Program, the Wisconsin Housing and Economic Development Authority teamed up with a private insurer and more than two dozen banks. It handed out 261 loans, worth about $30 million.

But the program triggered such fierce legislative debate that lawmakers killed it last year.

"This is a Wisconsin agency, with programs that are run for the benefit of legal Wisconsin residents," said Republican state Rep. Steve Wieckert, chairman of the Assembly Committee on Housing and author of the bill that quashed the program. "These people are uninvited guests, and the program flew in the face of people obeying the law."