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GATES � <br /> � �CAPITAL <br /> CORPORATION <br /> co�o�a« � March 3,2000 <br /> hfunicipa[ <br /> Financt - <br /> Mr. Cecil A. Collins,Jr. <br /> = Assistant City Manager � <br /> City of Decatur <br /> One Gary K. Anderson Plaza <br /> Decatur, Illinois 62523 <br /> Re: Combined Cities of Illinois <br /> Single Family Mortgage Revenue Bonds, Series 2000 <br /> (Assist First-Time Home Buyer pown Payment Assistance Program) <br /> Dear Cecil: <br /> Attached is a program comparison of the Assist program and IHDA programs prepared by <br /> National City Bank,the state's largest IHDA lender by volume as well as the largest Assist <br /> lender in the state. <br /> The summary points out cleazly the fle�bility of the Assist program relative to the I�IDA <br /> programs. The summary is based on a$120,000 loan size. <br /> 1. Assist allows for both conventional and government loans to be made while IHDA does <br /> not. Approximately 50%+/-of first-time home buyers in Decatur are done as <br /> government loans. It is difficult to justify offering a locally sponsored program that by <br /> definition excludes half of the home buying public and specifically those in the lower <br /> income range than Assist has been so 'successful in working with. The average Assist <br /> family income in 1999 was less than$24,000. Generally,these families do not have the <br /> approximately $3,000 of their own funds necessary to participate in even the IHDA � <br /> 5.00%teaser program. <br /> 2. The IHDA 5.00%teaser program is actually a 5.25%program when they provide closing <br /> cost assistance. <br /> 3. Assist loans (conventional and government combined)have a significantly lower <br /> delinquency/default ratio (50%lower)than the conventional Illinois mazketplace. In <br /> addition, all Assist home buyers aze required to take a home buyer education class. <br /> 4. The IHDA 5.25%teaser program is limited to just the funds a community gives to IHDA <br /> (i.e. Decatur's $3.8 million)whereas the Assist program allows a participating <br /> community to double or more the level of originations in a community by drawing from <br /> the program's pooled funds,the net result being a community can help twice as many <br /> families secure housing at below market rates. Assist has helped more than 120 families <br /> in the 1999 program. In 2000 we hope to serve more than 140 famlies. Based on the <br /> 1999 first-time home buyer loan size of$52,000, IHDA's program could provide a <br /> mortgage for only 351oans based on a city commitrnent of$1.9 million. <br /> 220 West Xuron Srreet <br /> Suite S00 East <br /> ChJcago, /L 60610 <br /> Tel. 3/2-664-5656 <br /> ' Fas 312-664-5650 <br />