Chicago REALTOR® _ SPECIAL INSERT NOVEMBER 2006• Page 1A

Reference Guide

City of Chicago
Housing Programs
for Your Clients
T he City of Chicago’s Department of Housing offers many enticing options to attract buyers and please
homeowners by saving money. It is important that you are aware of the myriad programs available to your
clients so that you can be referred to as the REALTOR® who watches out for your client’s best interest. In
today’s marketplace, having a competitive edge is what you need, and what better way to get that edge than by
improving your client services. This reference guide highlights some of the popular homeownership programs, but
the full menu can be viewed at www.cityofchicago.org.

inside: 2A | Historic Chicago Bungalow Initiative 3A | TaxSmart Mortgage Credit Certificate

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Historic Chicago Bungalow Initiative
Perhaps the most popular Depart-
ment of Housing program is the
Historic Chicago Bungalow Initiative.
The Chicago Bungalow was developed
in 1919 in response to a pressing
demand for owner-occupied housing
during a period of dynamic growth in
Chicago’s population and economic
base. To help preserve this element of
Chicago's social and architectural
history, the City of Chicago's
Department of Housing has created the
Historic Chicago Bungalow Initiative.
The program is administered in
conjunction with a not-for-profit organ-
ization, the Historic Chicago Bungalow
Association. Benefits of the program
are for new Bungalow buyers as well as
Bungalow owners.
Membership Advantages:
• Historic Chicago Bungalow
Mortgage offers competitive interest
rates and assistance up to 4% of the
total loan amount to be used for down
payments or closing costs. This option
is available through Bungalow partner
banks.
• Historic Chicago Bungalow Tax
Smart Mortgage provides the purchaser
competitive interest rates and the abili-
ty to reduce their federal income tax
payment by an amount equal to 20 per-
cent of the annual interest paid on the
loan, for the life of the mortgage.
• Historic Chicago Bungalow
Rehab Tax Credit for the financing
of home improvements and repairs.
Homeowners can receive a federal tax
credit equal to 50 percent of the yearly
interest paid on their loan, up to $2,000
per year.
• Historic Chicago Bungalow
restricted Income Grants offer home-
owners on restricted incomes grants of
up to $5,000 for rehab work.
• Energy Savers Matching Grant of
up to $1,000 for windows, doors, storm
doors and storm windows.
• Energy Savers Matching Grant of
up to $2,000 for insulation and heating
and cooling systems.
• Vouchers for $500 towards one
new energy efficient appliance pur-
chased at Home Depot, The Great
Indoors (Sears), or Abt Appliances.
• Design guidelines to aid owners
in maintaining the architectural
character of their bungalows, provided
free by the HCBA.
• Pattern Drawings can assist
owners, architects and contractors with
typical projects.
• Historic Chicago Bungalow
how-to seminars are held monthly on
topics related to Bungalow rehab and
restoration.
• Bungalow Partners Resource
Guide lists crafts people, vendors and
specialists in Bungalow restoration.
• Free permit assistance and expe-
dited permitting for owners engaged in
restoration or rehabilitation.
• Membership in the HCBA,
including receipt of the Association
Newsletter, Inside the Belt and free
admission to the Historic Chicago
Bungalow Expo. Members also receive
an HCBA certificate and plaque.
Historic Chicago Bungalow
Mortgage Facts
• The special Historic Chicago
Bungalow Mortgage provides owners
with a low mortgage rate while provid-
ing funds to help owners pay for and
restore their Bungalows.
SPECIAL INSERT_ Chicago REALTOR®
• The mortgage features low fixed-
interest rate mortgages for thirty years
and assistance equal to 4% of the loan
that can be used for a down payment or
closing costs.
• The Historic Chicago Bungalow
Tax Smart Mortgage provides the
purchaser competitive interest rates
and the ability to reduce their federal
income tax payment by an amount
equal to 20 percent of the annual
interest paid on the loan, for the life
of the mortgage.
• Tax Smart Mortgages must be
secured before purchase is complete.
• Both options are offered by
Bungalow Partner banks, Bank One,
Founders Bank, Harris Bank and
LaSalle Bank..
*Bungalows must be within certain
purchase-price limits to qualify for the
mortgages. Purchase-price limits increased
this year to a maximum of $343,750 in a
targeted, or low-income, area, and
$281,250 in other areas of the city.
Historic Chicago Bungalow
Rehab Tax Credit Facts
• Allows Bungalow owners to
obtain loans to renovate their homes at
a competitive rate, while lowering their
Federal Income Tax Payments.
• Competitive rates for all home
improvements and renovations whether
using a home improvement loan, a ren-
ovation loan or an equity line of credit.
• Federal Income Tax Credits up to
$2,000 per year or half the yearly interest
payments on your home loan, whichever
is lower, for the life of the loan.
• This is not a tax deduction from
income, rather it is an actual reduction of
the taxes owed to the federal government.
Available through Bungalow part-
ner banks, Bank One, Founders Bank,
Harris Bank and LaSalle Bank.
Bungalow Restricted
Income Grant Facts
• This program provides grants
(money that need not be repaid) to
owners of HCBA Certified bungalows
who have restricted incomes.
• The funds may be used for
general rehab work.
• Grants of up to $5,000 are
available for those earning less than
60 percent of area median income.
• Grants of up to $3,000 are avail-
able to those making less than 80% of
area median income.
• These grants can also be used as
a “match” for other HCBA programs
that provide grants for home energy
efficiency improvements.
The funds are provided by the
Illinois Housing Development
Authority.
Financial Resources for
Historic Chicago Bungalow
Energy Grant Facts
• The Illinois Clean Energy
Community Foundation has awarded a
$3.5 million energy-efficiency grant to
the City of Chicago.
• The grant is the largest ever
awarded by Illinois Clean Energy
dealing with energy efficiency and
the second largest overall since its
inception in 2000.
• The matching grants of up to
$2,000will allow owners of Historic
Chicago Bungalows to make their
homes more energy efficient.
• The funds, to be distributed over
a period of five years, will support a
program allowing bungalow owners to
upgrade or add new furnaces, air condi-
tioning units, water heaters and solar
thermal systems. Owners can also
receive matching grants from the city
to make improvements in windows,
doors and insulation, and to purchase
water efficient toilets and faucets.
• No income restrictions apply
but homes must be HCBA-certified
and homeowners must spend an amount
equal to or more than the grant to be
eligible.
Continued on page 4A
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TaxSmart Mortgage Credit Certificate
TaxSmart is a Mortgage Credit
Certificate (MCC) program which enti-
tles 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..
Federal law requires that a
home buyer satisfy each of
the following guidelines:
• First-Time Home Buyer.
Any person who has not owned a
principal residence at any time
during the three years prior to
closing a loan under this program
is considered a first-time home
buyer. Non first-time home buyers
are also eligible if they purchase a
home in a designated target area.
• Income.
Because the program is intended to
benefit low- and moderate-income
households, federal law imposes
maximum limits on the annual
gross income of home buyers.
• Purchase Price.
Federal law also imposes limits on
the purchase price of homes
financed under the program.
• Principal Residence.
The home buyer must occupy the
home as a principal residence with-
in a reasonable period which,
under most circumstances, may not
exceed 60 days after financing is
provided. A principal residence is
a home occupied primarily for
residential purposes and does not
include a home used as an invest-
ment property, as a recreational
home or a home in which 15
percent or more of its total area is
used for a trade or business.
• One-to-Four-Family Home.
Each residence financed must
contain 1-4 units. A one-family
residence includes a detached
home, one unit of a duplex, a
townhouse or a condominium unit.
Manufactured housing or mobile
homes qualify only if the unit has
at least 400 square feet of living
space, if it is more than 102 inches
wide and if it is permanently
affixed to real property. If the
residence is a 2-4 unit building,
one unit of the residence must be
the principal residence of the
building owner and the residence
must have been first occupied for
residential purposes at least five
years prior to applying for a
mortgage loan financed in connec-
tion with the MCC. Land adjoin-
ing the home is considered part of
the home only if it maintains the
home's livability and is not, other
than incidentally, a source of
income to the owner.
• New Mortgage.
The mortgage loan financed in
connection with a credit certificate
is required to be a new mortgage
and may not replace a prior mort-
gage on the home (whether or not
previously repaid).
• Program Area.
In order to be eligible for a certifi-
cate, the home financed under the
program must be located in the
City of Chicago.
Under this pro-
gram, mortgage
credit certificates
will be issued to
eligible home
buyers on a
first-come, first-
served basis. The
certificates are
available in
connection
with any type
of mortgage
loan (except loans
from tax-exempt bond programs),
including fixed rate and adjustable rate
mortgages. information are available from participat-
ing TaxSmart Mortgage Lenders.
This description is only a summary
Information provided by the City of Chicago
of the requirements under the TaxSmart
Department of Housing
program. Applications and additional
Public Safety Officer
Homeownership
Incentive Program
Chicago police officers, firefighters, • The applicant must be purchasing
and paramedics (referred to here as a single-family property (a build-
"public safety officers") who purchase ing with 1 to 4 units) located
homes in targeted areas of Chicago may within a census tract in Chicago
be eligible to receive $3,000 in down where a minimum of 50% of the
payment and closing costs assistance. If residents have incomes below
the purchase is located in a CHA 80% of the area median income,
Redevelopment Property (defined as a based on current census data or
residential development constructed within a CHA Redevelopment
as part of the CHA Plan for Property;
Transformation, as designated by the
Chicago Housing Authority), $7,500 • The public safety officer must be
in assistance may be available. one of the borrowers on the first
mortgage loan and must live in
The deferred loan is available per the acquired home as his or her
household and may be used for a down primary residence for at least five

Affordable payment or closing costs, including title

insurance; credit reports; recording fees;
appraisals; points; transfer stamps; third-
party property inspection fees; first year's
years after acquisition;

• Contribute at least 1% of
personal funds towards the down

Condos - CPAN payment of mortgage insurance; and

other customary bank related closing
charges. This loan will be fully forgiven
payment on the purchase price of
the property.
Information provided by the City of Chicago
Chicago Partnership for Affordable Neighborhoods if the officer resides in the home for at
Department of Housing
(CPAN) least five years.

CPAN is a partnership between the City of Chicago and developers to ensure Program Requirements
opportunities for affordable condominiums in market rate developments, particular-
ly in appreciating neighborhoods, through two steps: developer write-down and • The applicant must be a non-
purchase price assistance to homebuyers. probationary police officer in
good standing with the Chicago
Eligible homebuyers are first-time buyers (have not owned a home within the Police Department or a non-
last three years) with incomes up to 100% of median. Purchase price assistance may probationary firefighter or
be available for households with incomes up to 80% of median, who demonstrate paramedic with the Chicago Fire
a gap between the amount of the first mortgage they can secure, and the affordable Department;
sales price. Purchase price assistance is in the form of a deferred loan at 0%
interest, which is reduced on an annual pro rata basis. • Assistance is only available for
properties located within the City
Information provided by the City of Chicago Department of Housing
of Chicago;
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Historic Chicago Bungalow Initiative
Continued from page 2A
to support the protection of our local • Check your toilet for leaks. • Turn off the water while brushing
• The Illinois Clean Energy funds water resources. These water-related teeth, shaving, washing dishes.
will also be used to create more Green grants are available to all who purchase • Fix dripping faucets.
Bungalow Blocks and for community or rehab an HCBA-Certified Bungalow For more information, contact
outreach and education. regardless of income or purchase price. • Replace showerheads and faucet the Historic Chicago Bungalow
aerators with lower flow models. Association at 312.642.9900 or visit
• The first Green Bungalow model Water Conservation Grants www.chicagobungalow.org.
block was created on the 6400 block of
South Fairfield in Chicago, where four Consistent with Mayor Daley's
bungalows were creatively restored to
be models of green design while meet-
ing the needs of modern families. After
Water Agenda, these grants may be
used for a range of conservation meas-
ures, as well as natural storm water
Neighborhood
the homes were remodeled in 2002,
they were sold to low and moderate-
income buyers.
management techniques. Specific con-
servation items that are eligible for
grant assistance include low flow or
Lending Program
dual flush toilets and ultra-low flow fix-
• Illinois Clean Energy is an inde- tures, as well as high efficiency appli-
pendent, nonprofit grant-making insti- ances like washing machines and dish-
Home Purchase and
tution created to support efforts that washers. Additional assistance is avail-
protect and improve the environment able for bungalow owners to disconnect
in Illinois communities. their downspouts or implement other
Purchase/Rehab
measures to naturally direct storm water Through the Neighborhood Lending Program, the City of Chicago and
•Illinois Clean Energy has awarded back into the ground. Neighborhood Housing Services (NHS), provide first and second mortgage loans for
more than $38 million in grants, includ- the purchase and purchase/rehab of 1-4 units for homeowners who might otherwise
ing 350 grants to improve the energy In addition to the grant-eligible not be able to purchase a home. Subsidy resources are also available to eligible house-
efficiency of K-12 schools, public items, bungalow owners can help con- holds to complement mortgage loans. Clients receive one-on-one counseling and class-
libraries, park district facilities and serve water by observing the following room instruction in budgeting, financial planning and credit repair.
other public and nonprofit buildings in tips:
81 counties around the state. Benefits
• Don't over water your lawn. Qualifying applicants that utilize first and subordinate mortgages for purchase or
The grant represents the first time Lawns need only one inch of purchase/rehab may receive:
Illinois Clean Energy programs have water per week.
reached large numbers of homeowners.. • deferred and/or forgivable incentive loans for the purchase of vacant buildings
• Water early in the morning or
Water Efficiency evenings to keep the lawn moist • deferred loans or grants of $1,000 to $10,000 for the cost of federally required
longer. lead paint abatement/removal
In addition to energy efficiency
grants, the Historic Chicago Bungalow • Run the dishwasher and clothes • deferred or forgivable loans for down payment and/or closing costs
Association now makes grants available washer when you have a full load.
Eligibility Requirements
Program eligibility will be determined by NHS based on annual gross household

New Homes 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.
Application Process

for Chicago
The New Homes for Chicago Purchase price assistance is avail-
Contact NHS at 773.329.4010 for information and application materials.

Information provided by the City of Chicago Department of Housing

program has approved over 65 develop-

ments, or over 1,600 new affordable
condominiums, single family or two-flat
homes, which are either completed or
in process throughout Chicago. Using
business incentives to reduce develop-
ment costs, the City encourages devel-
opers to provide new construction of
homes for purchase by moderate-
income working individuals and fami-
lies. Prices under this program are
capped at $195,000 for single family
homes or condos and $265,000 for
two-flats.
Eligible homebuyers may earn up to
100% of the area median income.
Eligible buyers may also qualify for
TaxSmart Mortgage Credit Certificate
(MCC).
able for households at 80% of the area
median or below, who demonstrate a
gap between the amount of the first
mortgage they can secure and the
affordable sales price. Eligible recipients
need to maximize their purchasing
power through a first mortgage before
receiving assistance. Assistance
is in the form of a deferred loan at 0%
interest, which is reduced on an annual
pro rata basis.
A list of properties available for
purchase can be found at www.city-
ofchicago.org.
Information provided by the City of Chicago
Department of Housing
Teacher Housing
Resource Center
The Teacher Housing Resource
Center helps Chicago Public Schools
recruit/retain quality teachers by develop-
ing and marketing incentives for afford-
able rental and for-sale housing. This strat-
egy also helps revitalize neighborhoods.
The Teacher Housing Resource
Center (THRC) is a unique program in
which the CPS partners with private
property management companies, residen-
tial developers and lending institutions to
provide both rental and for-sale housing
incentives for teachers and student teach-
ers in the CPS. Currently, 26 private prop-
erty management companies, 6 residential
developers and 9 lending institutions serve
as partners.
The THRC website
(www.teacherhousing.cps.k12.il.us/)
provides general information about
Chicago neighborhoods and allows poten-
tial hires to search for rental partners by
CPS school location.
Information provided by the City of Chicago
Department of Housing