NEW! In October, FHA loans for condos will have easier guidelines and fewer restrictions for approval.

FHA now allows lenders to determine project eligibility, review project documentation, and certify federal compliance for condo projects.

In accordance with the 2008 Housing and Economic Recovery Act (HERA), FHA is implementing a new approval process for condo projects to insure mortgages on individual units with case numbers assigned as of October 1, 2009.

The lender will be required to retain all legal documents and provide documentation to HUD upon request.

NEW! Right of first refusal is permitted, unless it violates discriminatory conduct under the Fair Housing Act.

Eligibility Requirements
• Projects with 2 or more units carrying hazard, liability and flood insurance
• No more than 25% of units can be used for commercial space
• No more than 10% of units can be owned by more than one investor (applies to developers who rent vacant and unsold units)
• No more than 15% of units can be in arrears (30+ days past due)
• 50% of units must be sold and owner-occupied
• Projects listed as Proposed / Under Construction, Existing Construction or Conversion are eligible

Ineligible Projects
• Condotels
• Timeshares or segmented properties
• Multi-dwelling units
• Commercial properties

About FHA Financing
FHA financing is available for conforming loans (less than $417,000) with down payments as little as 3.5%.

For more specific information, please contact your PERL Mortgage Consultant about these exciting new developments.

TaxSmart is a Mortgage Credit Certificate (MCC) program providing a federal income tax credit to qualified home buyers. Under the program, a buyer would receive an MCC to reduce income taxes by an amount equal to 20% of the interest paid on a mortgage.

Federal law requires that a home buyer satisfy each of the following guidelines:

First-Time Homebuyer or Target Area Purchase
First-time homebuyers are eligible. Non first-time home buyers are eligible if the subject property is located 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 imposes limits on the purchase price of homes financed under the program.

Principal Residence
The 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.

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.

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 mortgage on the home (whether or not previously repaid).

Program Area
In order to be eligible for a certificate, the home financed under the program must be located in the City of Chicago.

MCC’s 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.

Please Note: First-time homebuyers must receive pre-purchase counseling to be eligible and must provide a Certificate of Completion with their applications. Purchase Price limits are adjusted periodically.

Income Limits
1 person household
$60,320 (Non-Target Area)
$72,384 (Target Area)

2 person household
$75,400 (Non-Target Area)
$90,480 (Target Area)

3+ person household
$86,710 (Non-Target Area)
$105,560 (Target Area)

Purchase Price Limits
1 Unit Non-Target
$325,894 (Existing)
$325,894 (New Construction)

1 Unit Target
$398,315 (Existing)
$398,315 (New Construction)

2 Unit Non-Target
$367,060 (Existing)
Not eligible (New Construction)

2 Unit Target
$448,629 (Existing)
$448,629 (New Construction)

3 Unit Non-Target
$445,960 (Existing)
Not eligible (New Construction)

3 Unit Target
$545,063 (Existing)
Not eligible (New Construction)

4 Unit Non-Target
$514,570 (Existing)
Not eligible (New Construction)

4 Unit Target
$628,919 (Existing)
Not eligible (New Construction)