By John Walker
Special to Inside
Those who want to buy or rehab a home or a small apartment building in Chicago will now be able to save thousands of dollars on their federal income taxes as well. On Wednesday the City voted to make more than $100 million in federal tax credits available to qualified owners through TaxSmart, a program that allows home buyers and rehabbers to lower their income taxes by making their mortgage or rehab loan a TaxSmart loan.
With TaxSmart, Chicagoans who buy or rehab a home not only receive a standard deduction on their federal income taxes, but are also be eligible for a tax credit — an amount actually subtracted from the amount they owe the federal government, after all calculations are made and a bottom line tax bill is arrived at. Those who buy a home with TaxSmart are eligible for a credit equal to 20 percent of their yearly mortgage interest paid; for those who use TaxSmart for rehab, the credit equals 50 percent of the yearly interest paid on the loan — up to $2,000 a year, each year for the life of the loan.
Unlike other mortgage or home loan programs, TaxSmart is non-proprietary and can be used with any mortgage, home equity or home loan product. Those who wish to use the product simply shop for the best mortgage or home loan products at any lender who is participating in the program and work with the lender to ascertain whether they meet income and home purchase guidelines and whether TaxSmart will be of benefit to them.
Once the loan is closed, owners are provided with a mortgage credit certificate which is to be copied and turned in with their federal income tax filing each year that they are claiming the credit.
Eligibility guidelines are generous with income limits ranging from $72,000 for a single individual to $105,000 for a household of three or more persons. Similarly, home price eligibility limits range from $325,000 for a single family residence to $628,000 for a four unit building in a targeted area. In addition, the home purchase tax credit is available only to those who are buying their first home or who have not bought a home within the past three years. Rehab tax credits have no such restrictions.
Participating lenders include: American Home Mortgage, Anchor Mortgage Corporation, Bank of America, BankOne/Chase, Chicago Financial Services, Compass Mortgage, Cosmopolitan Bank and Trust, Countrywide Home Loans, 1st Advantage Mortgage, First Mortgage Corporation, Focus Mortgage Group, LLC, Founders Bank, Franklin Bank, S.S.B., Great Lakes Lending Group, Harris Trust & Savings, Irwin Mortgage Corporation, Market Street Mortgage, Mid-America Bank, National City Mortgage, New City Bank, Neighborhood Lending Service, Park National Bank, Platinum Home Mortgage Corporation, Pullman Bank and Trust, Regency Savings bank
and Shorebank.
For more information, call 311 or visit www.cityofchicago.org/housing. |
