Here Are the Details:
TaxSmart Mortgage Credit Certificate Program
TaxSmart is a Mortgage Credit Certificate (MCC) program that provides a federal income tax credit to qualified homebuyers. A tax credit is a direct reduction of taxes due. Under the program, a homebuyer would receive a MCC to reduce income taxes by an amount equal to. The tax credit may be claimed each year the home buyer continues to live in a home financed under this program. The homebuyer will be charged a $375.00 application fee of which $225.00 is due at loan closing to the City of Chicago, Department of Planning and Development. A charge of $100.00 will apply to replace or reissue a Series 2013 MCC Certificate for any cause including, and without limitation, due to being lost or misplaced, being damaged, a refinance of the existing mortgage, or any other reason allowed by the Code or the Program Regulations.
Federal law requires that a home buyer satisfy each of the following guidelines:
First-Time Homebuyer or Target Area Purchase
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 homebuyers are also eligible if they purchase a home in a designated target area.
Federal law imposes maximum limits on the annual gross income of home buyers.
Federal law also imposes limits on the purchase price of homes financed under the program.
The home buyer must occupy the home as a principal residence within 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 investment 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. 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 connection with the MCC.
The mortgage loan financed in connection with a MCC certificate is required to be a new mortgage and may not replace a prior mortgage on the home (whether or not previously repaid).
In order to be eligible for a MCC certificate, the home financed under the program must be located in the City of Chicago.
Mortgage credit certificates are 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.
First-time homebuyers must receive pre-purchase counseling to be eligible and must provide a certificate of completion of pre-purchase counseling with their applications. Applications and additional information are available from Chicago Financial Services.