Tax Smart


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Tax Smart Mortgage

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Tax Smart

  1. 1. TaxSmart Open the door to affordable livingTaxSmart (Tax Smart) is a Mortgage Credit Certificate (MCC) program that provides a direct federal income tax credit to qualified home buyers. A tax credit is actually a direct reduction of taxes other-wise due by the borrower/home owner. 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 may be claimed each year the home buyer continues to live in a home financed under this program. Federal laws imposed require that a homebuyer satisfy each of the following: Must be a First-Time Home Buyer or Property Must Be Located in a Target Area: (call us when a property is identified and we will determine if it is located in a target area. Non first time home buyers are also eligible if they pur-chase a home in such designated target areas. Must Meet Income Requirements: Since the city of Chicago’s home buyer pro­grams are intended to benefit low and moderate income households and improve specific neighborhoods, federal law man- dates maximum limits on the annual gross income of home buyers (Call us for to verify your income… there are some loop-holes to this). Purchase Prices: Federal law has also imposed limits on the purchase price of homes financed under the program. Must Be a Principal Residence: The home buyer must occupy the home as a pri-mary res-i-dence within a reasonable period which, under most circumstances, may not exceed 60 days after clos-ing. A pri- mary residence is occupied primarily for residential purposes and does not constitute a home used for investment purpose, as a recreational home or a home in which 15 per-cent or more of its total area is used for a trade or business One-to-Four-Family Home: Each residence financed must con-tain 1–4 units. A one-family residence includes a detached home, one unit of a duplex, a town-house 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 ap- plying for a mortgage loan financed in connection with the MCC New Mortgage: Any mortgage loan financed in connection with a mortgage credit certificate is re- quired to be a new purchase mortgage and may not replace a prior mort-gage on the home (refi- nance). The tax credit is still retained upon refinancing the purchase money loan used for ac- quistion. You do not lose the benefit by refinancing after the initial acquisition. Program Area: In order to be eligible for a certificate, the home financed under the program must be located in the City of Chicago. CONTACT ME TODAY FOR MORE INFORMATION: John Gusweiler Poast, Senior Mortgage Banker Chicago Bancorp Handy: 312.543.0688 Direct: 312.738.6242 NMLS #: 217402 300 N Elizabeth Suite 3E, Chicago, IL 60607 Chicago Bancorp is an Illinois Residential Mortgage Licensee; NMLS #: 63483