Magazine article American Banker

Harris of Chicago to Offer Lower-Income Home Loans

Magazine article American Banker

Harris of Chicago to Offer Lower-Income Home Loans

Article excerpt

CHICAGO -

Harris Bank has launched an initiative to make $12 million in mortgages available to low- and moderate-income borrowers.

Harris, a $26 billion-asset subsidiary of Bank of Montreal, announced this week that it is working with the Illinois Housing Development Authority to lend primarily to borrowers in Chicago's West and South Side neighborhoods and in the suburbs of Maywood and Harvey. The $12 million in loans will be available for individuals to purchase one- to four-family homes at interest rates from 5% to 5.99% -- as much as 3 percentage points below market rates for similar mortgages.

Harris joins a list of Chicago banks offering similar programs. In June, Bank One unveiled an effort to make more Small Business Administration-backed loans for borrowers who have had difficulty qualifying for traditional loans. And seven banks -- including Wheeling, Ill.-based Cole Taylor Bank, Northern Trust Corp., and South Shore Bank of Chicago -- now participate in a recently expanded $219 million mortgage and home equity loan pool administered by the Chicago Department of Housing.

Lending programs for lower-income borrowers have been on the rise in recent years as strong economic growth and low interest rates have prompted more nontraditional borrowers to consider mainstream loans, said Malcolm Bush, the president of the Woodstock Institute, a Chicago-based watchdog group that monitors community reinvestment lending. "Lifelong renters want to jump into houses," he said. …

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