In addition to the lowest mortgage rates in decades, lower real estate prices and the generous $8,000 federal tax incentive, a new perk has appeared that makes it even sweeter for a first-time buyer to purchase a home in Chicago.

The City of Chicago Department of Housing has announced the TaxSmart program.  This product is offered by the City of Chicago through  several area lenders and allows the homeowner to take advantage of significant federal income tax savings, in addition to the ’standard’ mortgage interest deduction.  It is a mortgage credit certificate program that offers a federal income tax credit equal to 20 percent of the amount of interest paid on the mortgage each year (this is a direct reduction of the taxes due, which is more powerful than the standard itemized deduction).  The credits are available in connection with any type of mortgage loan (except those from tax-exempt bond programs) and include fixed rate and adjustable rate mortgages.  The savings continue as long as the homeowner owns the home financed under this program.  The property being purchased must be within the City of Chicago.  First-time homebuyers must complete a pre-purchase counseling session prior to applying with a lender.

In order to qualify, the participant must be a first-time homebuyer or someone who has not owned a home in the previous 3 years.  HOWEVER, if a homebuyer is purchasing a home in a ‘targeted’ neighborhood they are not required to be a first-time buyer.

There are income limits applicable to this program, which vary based upon the number of people in the household and whether the property is in a targeted or non-targeted area.  Likewise there are housing price limits, the amount again determined by whether it’s a targeted or non-targeted area and the size and type of property.  The income and housing price limits, as well as a link to participating mortgage lenders can be found on the TaxSmart Mortgage Credit Certificate page on the City’s website.

Feel free to contact me or any of the TaxSmart mortgage lenders if you require additional information.  Hurry to take advantage of the low mortgage rates, affordable prices, huge selection and many incentives available to you!