• The Mind­set of Home Buy­ing and Mort­gage Planning
• Mort­gage Instru­ments, Arbi­trage and Lever­ag­ing — The Impact
• Real Estate Taxation
• Eco­nom­ics and Inter­est Rate Movement
• When to Lock or Float
• APR Real­i­ties
• Con­ces­sions — How and When to Use Them
• Munic­i­pal­ity Incen­tives — City of Chicago Pro­gram Aware­ness (tax smart, city bond etc)
• The Approval Process
• Over­com­ing Chal­lenges (i.e.; Credit, Chain of Title, War­rantabil­ity, etc.)
• What You’ll Need to Get Started

2009 FIRST TIME HOME BUYER CREDIT DOWNLOAD

FIRST TIME HOME BUYER MORTGAGE LOAN GUIDELINES

The chal­lenge is sort­ing through the over­lap of “first time home
buyer” pro­grams avail­able.  A first time home buyer is defined as any­one who has not owned a res­i­den­tial pri­mary res­i­dence within the past 3 years.  An indi­vid­ual could have owned 10 homes prior to his or her 3 year stint of renting…or derive cur­rent earned income from invest­ment prop­erty… and still qual­ify for
a first time home buyer sta­tus.  Most pro­grams for first time buy­ers are designed for low to no down pay­ment, have higher than aver­age debt accep­tance and ratio require­ments, have a per­cent­age of median aver­age income restric­tion and require pur­chas­ing a pri­mary res­i­dence (occa­sion­ally FTHB sta­tus is waived if pur­chase is within spe­cific zon­ing or cen­sus tract areas).  Also, the major­ity of 100% financ­ing (no money down) loan pro­grams are avail­able for any­one and not just bor­row­ers defined as “first time home buy­ers”.  The pri­mary dif­fer­ences in first time home buyer pro­grams and oth­ers is the abil­ity to obtain spe­cial mort­gage financ­ing incen­tives i.e., earned income tax cred­its, free grant monies to sub­si­dize costs and reduced rates for stan­dard mort­gage insurance.

See the list of local pro­grams below and visit our City of Chicago Pro­grams page.

ENGAGED / NEWLYWED HOME BUYER INCENTIVES

Con­grat­u­la­tions to both of you!

Being a recently engaged or new­ly­wed cou­ple, your new life is just begin­ning (or begin­ning again) together as a team.  Your first home together is an absolute pri­or­ity and it’s my job to cre­ate a fan­tas­tic home buy­ing expe­ri­ence for both of you — first timers or not.  Being an indus­try expert and being mar­ried,  my team and I have the inside scoop on how to take full advan­tage of what the mar­ket provides.

Obtain­ing mort­gage financ­ing is eas­ier than you think, despite the credit and liq­uid­ity mar­kets cur­rently.  Many first time home buyer and 100% financ­ing options are avail­able (no money down).  Still, many home buy­ers would pre­fer to make a down pay­ment on their new home or have some addi­tional funds in reserve for what­ever arises.  Although not nec­es­sary, a down pay­ment will pro­vide access to a greater vari­ety of loan pro­gram options and lessen the cost of bor­row­ing over­all (due to sev­eral factors).

We have a very spe­cial pro­gram for new­ly­wed or engaged cou­ples.  We have exclu­sively devel­oped a plan whereby your wed­ding guests can con­tribute directly to the down-payment of your new home… sub­si­dize any clos­ing costs… or dis­count the loan pay­ment for a cou­ple of years. Isn’t that fan­tas­tic?  Do you think your friends and fam­ily would give a lit­tle extra if they knew their money was going towards your first home pur­chase?  You bet­ter believe they will!

Here’s the cherry on top.  We just have to keep giv­ing and giving!

• A wed­ding gift to you to match con­tri­bu­tions tiered accordingly:
  • Up to $1,000 down at clos­ing — $200
  • $1,001 to $4,000 down at clos­ing — $350
  • Over $4,001 at clos­ing — $500
• We can send your guests our reg­istry card explain­ing the pro­gram (or include our reg­istry card in with your invi­ta­tions to send out yourself)!
• We can send a thank-you card to your guests that includes a photo of you and your new home!

List of Local Chicago Home Buyer Programs:

Chicago City Mort­gage Pro­gram (tem­porar­ily dis­con­tin­ued) — The City Mort­gage Pro­gram pro­vides first-time home­buy­ers apply for a low-interest mort­gage through the City Mort­gage Pro­gram. This pro­gram pro­vides mort­gage financ­ing and gift assis­tance to qual­i­fied buy­ers of owner-occupied res­i­den­tial prop­er­ties. The assis­tance is equal to 4% of the mort­gage amount and must be used to pay clos­ing costs or as down pay­ment assis­tance. Appli­cants for the City Mort­gage pro­gram must be first-time home buy­ers. Non first-time home buy­ers are also eli­gi­ble if they pur­chase a home in a des­ig­nated tar­get area.  See our City of Chicago Pro­gram Page for details.

Chicago TaxS­mart Mort­gage Pro­gram TaxS­mart is a Mort­gage Credit Cer­tifi­cate (MCC) pro­gram which enti­tles first-time home buy­ers to a fed­eral income tax credit. A tax credit is a direct reduc­tion of taxes due. Under the pro­gram, a home buyer would receive an MCC to reduce income taxes by an amount equal to 20% of the inter­est paid on a mort­gage. The tax credit is avail­able each year the home buyer con­tin­ues to live in a home financed under this pro­gram. Must be a First Time Home Buyer. Non first-time home buy­ers are also eli­gi­ble if they pur­chase a home in a des­ig­nated tar­get area. The pro­gram is intended to ben­e­fit low– and moderate-income house­holds.  See our City of Chicago Pro­gram Page for details.

Chicago Loca­tion Effi­cient Mortages The Loca­tion Effi­cient
Mort­gage (LEM) is a mort­gage that helps peo­ple become home­own­ers in
loca­tion effi­cient com­mu­ni­ties. These are con­ve­nient neigh­bor­hoods in
which res­i­dents can walk from their homes to stores, schools,
recre­ation, and pub­lic trans­porta­tion. Peo­ple who live in loca­tion
effi­cient com­mu­ni­ties have less need to drive, which allows them to
save money and improves the envi­ron­ment for every­one. Call: The Cen­ter
for Neigh­bor­hood Tech­nol­ogy Dave Chan­dler (773) 278‑4800, ext. 123

Chicago New Homes for Chicago The New Homes for Chicago pro­gram
is an afford­able home­own­er­ship ini­tia­tive offered by Mayor Richard M.
Daley through the City of Chicago’s Depart­ment of Hous­ing to cre­ate
home­own­er­ship oppor­tu­ni­ties for city res­i­dents. Now in its eleventh
year, the City’s New Homes for Chicago pro­gram has approved over 65
devel­op­ments, or over 1,600 new afford­able single-family or two-flat
homes, which are either com­pleted or in process through­out Chicago.

Chicago Part­ner­ship for Afford­able Neigh­bor­hoods
CPAN (now obso­lete), a part­ner­ship between the City of Chicago and
devel­op­ers, is a tool to ensure oppor­tu­ni­ties for afford­able
con­do­mini­ums and sin­gle fam­ily homes in mar­ket rate devel­op­ments,
par­tic­u­larly in appre­ci­at­ing neigh­bor­hoods, through two steps: a
devel­oper write-down and pos­si­ble pur­chase price assis­tance to
home­buy­ers.  Par­tic­i­pat­ing devel­op­ers reduce the pur­chase price to an
afford­able level on a per­cent­age of the units in a market-rate
devel­op­ment. The dif­fer­ence between the mar­ket value and the afford­able
price is recap­tured as a junior mort­gage, assigned to the Chicago
Low-Income Hous­ing Trust Fund. See URL for more Eli­gi­ble pur­chasers
will include fam­i­lies with income ranges up to 100% of the area median
who are either first-time home­buy­ers or who have not owned a home
within the past three years.

Chicago Neigh­bor­hood Lend­ing Pro­gram
Through the Neigh­bor­hood Lend­ing Pro­gram, the City of Chicago and
Neigh­bor­hood Hous­ing Ser­vices (NHS), pro­vide first and sec­ond mort­gage
loans for the pur­chase and pur­chase — rehab of 1 — 4 units for
home­own­ers who might oth­er­wise not be able to pur­chase a home.  Sub­sidy
resources are also avail­able to eli­gi­ble house­holds to com­ple­ment
mort­gage loans.  Pro­gram eli­gi­bil­ity will be deter­mined by NHS based on
annual gross house­hold income. A min­i­mum of 60% of sub­sidy funds will
be pro­vided to house­holds under 80% of area median income.  That’s
about $45,200 for a fam­ily of four.

IHDA First-time home­buyer pro­gram IHDA helps low and
mod­er­ate income fam­i­lies become first time home­own­ers. We ful­fill this
impor­tant mis­sion through a num­ber of ini­tia­tives and programs.

IHDA H.E.L.P. Home Equity Loan Pro­gram  IHDA H.E.L.P. offers qual­i­fied first time home­buy­ers 4.25% of the pur­chase price of a house as a gift which can be used for the 3% down­pay­ment and the 1.25% for the orig­i­na­tion fee. The inter­est rate for this loan pro­gram is cur­rently at 6.5%. (RATES ARE SUBJECT TO CHANGE AT ANY TIME.)

IHDA Mort­gage I-Loan Cer­tifi­cate (MCC) The I-Loan Cer­tifi­cate (Mort­gage Credit Cer­tifi­cate, a.k.a. MCC) allows first-time home­buy­ers to receive a dol­lar for dol­lar reduc­tion in fed­eral income taxes of 25 per­cent of their mort­gage inter­est. This reduc­tion is in addi­tion to the stan­dard income tax deduc­tion avail­able when pur­chas­ing a home. Please keep in mind that the I-Loan Cer­tifi­cate is not a loan in and of itself. It is a tax credit.

NHS: Mort­gage and Purchase/Rehab loan pro­gram A 30-year
fixed-rate first mort­gage for 80% of the total project cost (pur­chase
price plus rehab, clos­ing and soft costs).  Cus­tomers using the NHS
first mort­gage loan can qual­ify for NHS™ Gap Financ­ing (below) and do
not have to pur­chase Pri­vate Mort­gage Insur­ance.  Spe­cial con­sid­er­a­tion
is given to the rental income for a two– to four-unit build­ing.
Min­i­mal down pay­ment require­ments: from 1 to 5% of either the pur­chase
price (if there is no reha­bil­i­ta­tion required) or the total project
cost.  Licensed, insured con­trac­tors must per­form all reha­bil­i­ta­tion
work and an NHS con­struc­tion spe­cial­ist will mon­i­tor the con­struc­tion
process.  Some income and neigh­bor­hood eli­gi­bil­ity require­ments apply.

NHS: Gap Loans NHS offers first time Home­buy­ers a loan that
com­bines with their down pay­ment and is used for the pur­chase and — or
reha­bil­i­ta­tion of an eli­gi­ble home. Gap loans are sec­ond mort­gages at
the same rate as the pri­mary NHS mortgage.

Oak Park: Home­buyer assis­tance Four pro­grams for first time
buy­ers are offered through the Village’s tax exempt bond­ing author­ity
and avail­able through par­tic­i­pat­ing lend­ing insti­tu­tions. The Illi­nois
Hous­ing Devel­op­ment Author­ity (IHDA) admin­is­ters three pro­grams, and a
pri­vate firm min­is­ters the fourth. Funds usu­ally become avail­able for
these pro­grams in April or May, and are offered on a first-come,
first-served basis. Homes pur­chased must fall within pre­scribed
pur­chase price lim­its, and the pur­chas­ing household’s income must fall
within a pre­scribed max­i­mum. The pur­chaser must not have owned a home
in the prior three years, must have suf­fi­cient income to sup­port a
mort­gage pay­ment (as deter­mined by the lender), and must attend two
home­buyer coun­sel­ing sessions.

Will County FirstHome Pro­gram FirstHome is a first time home buyer pro­gram for eco­nom­i­cally chal­lenged house­holds in Will County who have max­i­mized their house­hold work­ing hours but remain unable to pur­chase a home.  FirstHome is designed to help close the gap between income and houing afford­abil­ity in Will County for full-time work­ing house­holds who are pro­jected to be at or under 70% of the area median income for the upcom­ing 12 months.

Aurora– Real Estate Trans­fer Tax Rebate For par­tic­i­pants in the
Assist Pro­gram or the Mort­gage Credit Cer­tifi­cate (MCC) Pro­gram who
pur­chase prop­erty in one of the City’s tar­geted neigh­bor­hoods, the City
will refund its por­tion of the real estate trans­fer tax to the buyer.
This is a seller expense but a buyer’s ben­e­fit, and it aver­ages around
$200 after clos­ing. Con­tact DNR at 264‑8280 for infor­ma­tion on what
sup­port­ing doc­u­ments need to be sub­mit­ted in order to receive the
benefit.

Aurora– Assist Pro­gram The Assist Pro­gram gives first-time home­buy­ers the oppor­tu­nity to buy a home by pro­vid­ing a lower-rate inter­est plus monies avail­able for down pay­ment and — or clos­ing cost assis­tance. Call Depart­ment of Neigh­bor­hood Rede­vel­op­ment for a list of par­tic­i­pat­ing lenders. Call DNR for a list of par­tic­i­pat­ing lenders.

Aurora– Mort­gage Credit Cer­tifi­cate Pro­gram The Mort­gage Credit Cer­tifi­cate Pro­gram pro­vides first-time home­buy­ers with a credit on their income taxes equal to one-fourth of the inter­est paid in each year for the life of the mort­gage. Max­i­mum annual credit is 2,000.

HUD– Cities that offer home­buy­ing assis­tance pro­grams The cities listed on URL below offer var­i­ous incen­tives for Home­buy­ing. Con­tact the city for details. (see URL)

HUD– Pub­lic Hous­ing Vouch­ers for Home­own­er­ship This is a new pro­gram, which if adopted by local Hous­ing Author­i­ties, allows ten­ants with Hous­ing Choice Vouch­ers, to use those vouch­ers to buy a home. These are the Hous­ing Author­i­ties in Illi­nois, which are par­tic­i­pat­ing in the pro­gram. There will be more in the future. Rock Island Hous­ing Author­ity DuPage Hous­ing Author­ity Chicago Hous­ing Author­ity Rock­ford Hous­ing Author­ity For more infor­ma­tion, con­tact the Hous­ing Author­ity in your com­mu­nity to see if they are mak­ing plans to use Hous­ing Choice Vouch­ers to cre­ate new homeowners.

HUD– Energy Effi­cient Mortages FHA Mortage Insur­ance In 1992
Con­gress man­dated a pilot demon­stra­tion of energy-efficient mort­gages
(EEMs) in five States. In 1995 the pilot was expanded as a national
pro­gram.  FHA insured 16,000 EEMs in FY1998 (1.5 per­cent of total FHA
loans) 30,044 EEMs in FY1999 (2.3 per­cent of total FHA loans) and
28,578 in FY2000 (3.1 per­cent of total FHA-insured loans).  EEMs
rec­og­nize that reduced util­ity expenses can per­mit a home­owner to pay a
higher mort­gage to cover the cost of the energy improve­ments on top of
the approved mort­gage.  FHA EEMs pro­vide mort­gage insur­ance for a
per­son to pur­chase or refi­nance a prin­ci­pal res­i­dence and incor­po­rate
the cost of energy-efficient. see URL for details.

HUD Mortage Insur­ance Pro­grams Indian Reser­va­tions and Other A
fam­ily who pur­chases a home under this pro­gram can apply for financ­ing
through a HUD approved lend­ing insti­tu­tion such as a bank, sav­ings and
loan, or a mort­gage com­pany. To qual­ity, the bor­rower must meet
stan­dard FHA credit qual­i­fi­ca­tions. An eli­gi­ble bor­rower can receive
approx­i­mately 97% financ­ing.  An eli­gi­ble party can pro­duce a gift for
the down­pay­ment. Clos­ing cost can be financed; cov­ered by a gift,
grant, or sec­ondary financ­ing; or paid by the seller with­out reduc­tion
in value.

HUD– 203(b) Mortage Insur­ance
To pro­vide mort­gage insur­ance for a per­son to pur­chase or refi­nance a
prin­ci­pal res­i­dence. The mort­gage loan is funded by a lend­ing
insti­tu­tion, such as a mort­gage com­pany, bank, sav­ings and loan
asso­ci­a­tion and the mort­gage is insured by HUD.

HUD– 203(k) loan The pur­chase of a house that needs repair is
often a catch-22 sit­u­a­tion, because the bank won’t lend the money to
buy the house until the repairs are com­plete, and the repairs can’t be
done until the house has been pur­chased. HUD’s 203(k) pro­gram can help
you with this quag­mire and allow you to pur­chase or refi­nance a
prop­erty plus include in the loan the cost of mak­ing the repairs and
improve­ments. The FHA insured 203(k) loan is pro­vided through approved
mort­gage lenders nation­wide. It is avail­able to per­sons want­ing to
occupy the home.

Kane County– Home­buyer Assis­tance Pro­gram (HAP) The HOMEBUYER Assis­tance Pro­gram helps indi­vid­u­als in Kane and DeKalb coun­ties who have incomes of 80 per­cent, or below, of the local median income. The pro­gram may assist with the down pay­ment and clos­ing costs. In addi­tion, funds may be avail­able for repair­ing or updat­ing the home in order to meet Hous­ing Qual­ity Stan­dards. Local, par­tic­i­pat­ing banks pro­vide first mort­gages to eli­gi­ble appli­cants. Loans are 30 year, fixed rate, con­ven­tional loans at one-quarter per­cent discount.

Schaum­burg: First Time Home­buy­ers Pro­gram Through the Home Equity Loan Pro­gram (HELP) and Assist Pro­gram, first time home­buy­ers can receive a gift of 4.25% of the home’s pur­chase price to be used toward their down pay­ment and the mort­gage orig­i­na­tion fees that are com­monly asso­ci­ated with clos­ing costs. Home­buy­ers must meet income and pur­chase price lim­its to qual­ify for the pro­gram. (see URL)

Mort­gage Aware­ness Pro­gram Mort­gage Aware­ness Pro­gram (MAP) to help con­sumers pro­tect them­selves from preda­tory lenders. Credit Coun­selor list­ing is pro­vided by a link to the Illi­nois Depart­ment of Finan­cial Insti­tu­tions web­site. For ques­tions regard­ing this list, please con­tact te Depart­ment of Finan­cial Insti­tu­tions at 217–782-4809 or 312–814-5145 or email them at dficcd@mail.state.il.us

DuPage Home­own­er­ship Cen­ter: Reduced inter­est financ­ing pack Spe­cial reduced-interest financ­ing pack­ages are avail­able for eli­gi­ble low-income house­holds to help boost their pur­chas­ing power. low-income requirements

DuPage– Just Homes CHAD pro­vides a solu­tion to home own­er­ship in DuPage County through a com­mu­nity land trust pro­gram in which first-time home­own­ers buy the house and lease the land. When the home­own­ers sell the house, CHAD buys it back at 60 per­cent of the appraisal price at the time of the sale. Call for more information.

DuPage County– Home­stead and Hous­ing Choice Pro­grams Both of
these pro­grams pro­vide edu­ca­tion, coun­sel­ing and a reduced-interest
financ­ing pack­age that sig­nif­i­cantly boosts the pur­chas­ing power of low
and mod­er­ate income per­sons to help them buy a home. Addi­tion­ally, the
Hous­ing Choice pro­gram allows cur­rent Hous­ing Choice (‘Sec­tion 8′)
Voucher Hold­ers to use their sub­sidy toward a mortage payment.

*All pro­grams sub­ject to change or dis­con­tinue with­out notice.