PEORIA — A measure creating some new consumer protections for people who enter into a contract-for-deed arrangement to buy their homes could soon be law.

The two Peoria lawmakers who sponsored it say that it could make a real difference in preventing people — particularly in low-income areas — from being taken advantage of by unscrupulous sellers.

Senate Bill 885 is designed to combat situations in which in some instances "folks were being treated like renters, never built any equity," even though their payments were supposed to gradually build up equity in the home, said state Rep. Jehan Gordon-Booth, D-Peoria.

In a contract-for-deed sale, rather than using a bank, the seller finances the sale of the home to the buyer, who makes payments in regular monthly installments until they've covered the cost of the home and interest on the purchase. More of them tend to take place in low-income areas where buyers have difficulty obtaining traditional financing, and not all such purchase agreements are officially, legally recorded.

"What was happening was, you would go into these homes and they weren't even livable," Gordon-Booth said. "Folks were paying this money under the impression that they were going to become a homeowner one day, and if they were 30 days late on one payment, they were treated like a renter and not a homeowner."

The measure requires that individuals selling three or more homes on a contract-for-deed basis — effectively limiting it to people who are in the business of such sales — provide buyers with an amortization schedule and lays out the process for foreclosure more strictly.

"It protects people who otherwise might be victimized by somebody who is trying to pull a fast one," state Sen. Dave Koehler, D-Peoria, said.

The final legislation passed both houses unanimously. Gov. Bruce Rauner has until the end of the month to decide whether to sign or veto it. His office says it remains under review.

The measure itself is the product of lengthy negotiation, both Koehler and Gordon-Booth said, involving groups representing real estate agents, lending organizations, affordable housing agencies and the state Attorney General's Office, among others. The intent was to craft an "agreed" bill, where all sides can have their concerns addressed in final legislation they find palatable.

Interestingly, even with that effort, Gordon-Booth said she could see during a House committee hearing that some colleagues still had doubts about the concept. But, she said, those evaporated when the only person who offered testimony against the bill was a slumlord from the Metro East.

"His defense of the work of slumlords ended up convincing (doubters) to vote for the bill — so much so that some of my Republican colleagues came up to me after the committee hearing and they said, 'We're going to speak to this on the floor because we want to make sure that anyone who maybe thinks what we were thinking (with our initial doubts) understands who we're dealing with when we talk about this kind of legislation,'" Gordon-Booth said.

Chris Kaergard covers politics and government. He can be reached at or 686-3255. Follow him on Twitter @ChrisKaergard.