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BOOK ENTRY ONLY Rating:AA-(See"RATING"herein)
<br /> Subject to compliance by the Issuer with certain covenants, in the opinion of Co-Bond Counsel, under present law, interest on the Bonds is not
<br /> includible in gross income of the owners thereof for federal income tax purposes,but such interest is included as an item of tc�preference in computing the
<br /> federa/a[ternative minimum tax for individua[s and corporations. Interest on the Bonds is not exempt from present State of Illinois income taxes. See"TAX
<br /> MATTERS"herein for a more complete discussion.
<br /> Illinois Finance Authority and City of Decatur, Macon County, Illinois
<br /> First Home: Illinois Fixed Rate Single Family Mortgage Revenue Bonds
<br /> Series 2005
<br /> Dated:Date of Delivery Due: [MATURITY DATE]
<br /> The Illinois Finance Authority(the"Authority")and the City of Decatur,Macon Cou�y,Illinios(the"City"and,together with the Authority,the
<br /> "Issuei")have each authorized the issuance,in multiple subseries(eacb,a"Subseries"),of up to$50,000,000 aggregate principal amouirt of its First Home:
<br /> Illinois Fixed Rate Single Family Mortgage Revernie Bonds, Series 2005 (the"Series 2005 Bonds"or the"Bonds")in authorized denominations(wtvle
<br /> bearing interest at an Auction Rate)of$25,000 or any i�egral multiple thereof. The proceeds of the Bonds will be used by the Authority to make available �
<br /> funds to finance the acquisition of mortgage backed certificates, guatantced as to timely paymern of principal and 'urterest by the Govemment National
<br /> Mortgage Association(the"GNMA Certificates"or the"Certificates")and backed by pools of Mortgage Loans made by participating lenders to qualified
<br /> persons or families in order to assist such qualified persons or families in acquiring homes witlrin the State of Illinois.
<br /> 1'he Bonds will be issued,upon satisfaction of cerfain conditions described herein,on each day that a Certificate is prese�ed to[TRUS1'EE](the
<br />, "Tn�stee")for purchase(each such date a"Certificate Purchase Date"). The Bonds are initially issuable only to Cede&Co.,the nominee of The Depository
<br /> Trust Company("DTC")pursuant to the Book-Entry Only System described herein. No physical delivery of the Bonds will be made to the purchasers
<br /> thereof. Interest on each Subseries of Bonds will accrue,as set forth hereiq from their date of delivery,and is payable on the first day of each month
<br /> commencing in the mornh following the month in wlrich the Tiustee first receives a payment of i�erest under the Certificates allocated to such Subseries.
<br /> The principal of,premium,if any,and iuterest on the Bonds will be payable by the Tnistee to Cede&Co. As long as DTC or its nominee
<br /> remains the registered owner of the Bonds,disbursement of such payme�to DTC Participants is the responsibility of DTC and disburseme�of such
<br /> paymerns to the beneficial owners of the Bonds is the responsibility of DTC Participavts and I�irect Participants. No physical delivery of the Bonds will be
<br /> made to the purchasers thereof. See"THE BONDS-Book Entry Only System"herein.
<br /> The Bonds aze subject to redemption prior to maturity on the terms and at the price described herein See"THE BONDS-Redemption Prior to
<br /> Maturity"herein It is expected that a substantial portion of the Bonds will be redeemed at par prior to their stated maturities.
<br /> THE BONDS AND THE OBLIGATION TO PAY INTEREST THEREON AND PREMIUM WITH RESPECT HERETO,ARE SPECIAL,
<br /> LIMITED JOINT OBLIGATIONS OF THE ILLINOIS FINANCE AUTHORITY AND THE CITY OF DECATUR, MACON COUNTY, ILLINOIS
<br /> PAYABLE SOLELY OUT OF THE TRUST ESTATE UNDER THE INDENTURE, AND SHALL NOT BE DEEMED TO CONSTTfUTE AN
<br /> INDEBTEDNESS OR AN OBLIGATION OF THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION("GNMA"),THE AUTHORITY,THE
<br /> CITY, THE STATE OF ILLINOIS, OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE PURVIEW OF ANY CONSTITUTIONAL
<br /> LIMITATION OR STATUTORY PROVISION OR A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS,IF ANY,OF ANY OF
<br /> THEM. THE AUTHORITY HAS NO TAXING POWER NO OWNER OF ANY BOND SHALL HAVE THE RIGHT TO COMPEL ANY EXERCISE
<br /> OF THE TAXING POWER OF THE CITY,THE STATE OF ILLINOIS OR ANY POLTI'ICAL SUBDIVISION THEREOF TO PAY ANY PRINCIPAL
<br /> OF,PREMIUM,IF ANY,OR INTEREST ON THE BONDS. GNMA IS NOT LIABLE FOR PAYMENT OF THE BONDS.
<br /> The Bonds are offered when, as and if issued and subject to the appmval of their validity by Chapman and Cufler LLP, Clucago, Illi�is,
<br /> Kirkpatrick&Pettis,Clricago,Illinois and Pugh,Jones,Johnson&Quandt,P.C.,Clvcago,Illinois,Co-Bond Counsel. Certain legal matters will be passed
<br /> upon for the Authority by Burke,Burns&Pinelli,Ltd,Clricago,Illinois,for the City by ,Clvcago,Illi�is for the Tmstee by its law
<br /> department,for the Servicer by Law Associates,Inc.,Tulsa,Oklahoma and for the Underwrita by Peck,Shaffer&Williams LLP,Clricago,Illinois
<br /> STEPHENS INC.
<br /> Dated: _,2005
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