MURPHYSBORO — Illinois Treasurer Michael Frerichs made a stop in Murphysboro on Tuesday to announce an investment of $500 million for a new loan program he says will help boost the rural community.
At the Murphysboro Farm Bureau Office, Frerichs said the comprehensive loan program will flow through local banks to help individuals obtain loans at below-market rates.
Local bank partners include Peoples National Bank, Anna-Jonesboro, and Banterra Bank. He encouraged other local banking institutions to reach out to the state to get involved with the program.
“I was born and raised in the small community of Gifford, and know first-hand the importance of providing a financial opportunity for rural Illinois to sustain, grow, and spur economic development,” Frerichs said.
During the news conference Tuesday, the treasurer announced three programs — the Community Uplift Program, Finally Home and Ag Invest.
Community Uplift enables qualified financial institutions that operate in economically depressed areas to access state capital at a lower rate in the form of a time deposit, which can't be withdrawn before a set date. Frerichs says this gives banks, credits, unions, and savings and loan institutions in those areas additional financial resources, which allows those institutions to increase lending activities and fund more local developments.
“I am chief banker for Illinois, but I do not run a state bank,” he said. “We have a great system of community banks in Illinois, and it is our job to partner with them to give them what they need to do their job.”
Ag Invest is a linked deposit program aiming to lower the overall costs for farmers by reducing the interest rate for financial institutions to lend to them. Frerichs said the loans through the program can be used for farm equipment, construction expenses, or costs related to crop production.
“Our rural neighbors know the honor that comes with helping families who want to help themselves,” he said. “Encouraging local banks and lending institutions to participate in these lending programs will help strengthen rural Illinois.”
Finally Home is a program to help individuals purchase a home or help refinance in cases of hardship, Frerichs said. The program works by having Frerichs’ office guarantee 10 percent of the purchase price for a five-year period on a home loan. It is intended for those who are trying to buy or refinance a loan, but can’t without the 10 percent guarantee to the financial institution.
“We think this has the potential to fill a very important gap, because buyers or would-be buyers in the rural parts of the state face a handful of unique challenges,” Matt Difanis, president of Illinois Realtors, said.
Frerichs said this program gives the lending institutions the power to be flexible when approving loans to those individuals attempting to invest in themselves.
“We need to help people invest in themselves, invest in their businesses and invest in their communities,” he said. “When we do that, this state will realize its great potential.”