No, we are not aware of any Illinois law that generally prohibits interest-only residential mortgage loans, although there is a state requirement that operates to sometimes prohibit such loans. If the mortgage loan triggers the definition of “high risk” in the High Risk Home Loan Act, that law prohibits an interest-only feature that results in a balloon payment.

For resources related to our guidance, please see:

• High Risk Home Loan Act, 815 ILCS 137/35.5 (“No high risk home loan may contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This Section does not apply when the payment schedule is adjusted to the seasonal or irregular income of the consumer.”)