If you have been considering buying real estate, now is the time.  There is financing available, but you need to shop around.  And don't even think about looking at property until you get pre-qualified or, preferably, pre-approved and know how much your lender will agree to finance.

For potential buyers, rates are in your favor and there is mortgage money available, particularly FHA insured mortgages for homeowners. FHA requires a minimum of 3.5% down payment, and has no income limitations.  And, since much of Bronzeville is considered a "low to moderate income tract", some lenders are able to provide down payment or closing cost assistance, or a slightly lower mortgage rate.

And don't forget about the First Time Home Buyer Federal Income Tax Credit. This credit of up to $8,000 is available for buyers who purchase homes between January 1, 2009 and December 1, 2009.  The credit is equal to 10% of the cost of the home, up to a maximum credit of $8,000.  A first time buyer is someone who has not owned a home in the last 3 years.  Income limits do apply - Individuals with adjusted gross income up to $75,000 ($150,000 for couples) are eligible for the full credit; the credit is phased down if you earn more than those amounts and is not available for individuals with income above $95,000 ($170,000 for couples).  If the home is sold within 3 years, the entire amount of the credit is recaptured on the sale, but does not have to be repaid if the buyer stays in the home at least 3 years.  JUST ANNOUNCED - GET THAT TAX CREDIT UP FRONT:

From The Chicago Assoc. of Realtors 5/29/09 - "FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Learn more about the credit, including how to apply for it this year even if you've already filed your taxes, at REALTOR.org.

Source: Robert Freedman, REALTOR® Magazine Online"

There are a number of other incentives, such as the City of Chicago's Tax Smart Program whereby certain lenders can provide a Mortgage Credit Certificate giving the buyer a federal income tax credit of up to $2000 for the life of the mortgage, depending on eligibility.

Now, more than ever, the expertise of a knowledgeable Realtor can be invaluable.  If you are buying property now, particularly condos or foreclosed properties, you need to educate yourself as much as possible. 

If you have any questions about the market, or about buying or selling in this market, I would be happy to talk to you. I am also happy to speak to groups, such as condo associations and neighborhood groups. And I encourage all to attend the monthly seminar I teach with Chase Bank – we have geared the discussions to the current market conditions and provide some valuable insights.

Pam Dempsey
Broker/Owner
Bronzeville Properties LLC
3930 S. King Drive
Chicago, IL  60653  

312-560-8498 cell
773-548-3300 office
773-305-0977 fax
pam@bronzevilleproperties.com