Monday, May 18, 2009

OBAMA’S STIMULUS PLAN NEEDS TO BE EXPANDED TO SPEED UP RECOVERY

While some economic experts are saying the housing market is beginning to bottom out, Chicago developers, Realtors and bankers think the Obama Stimulus needs to be expanded to speed up the recovery.

Realtors from Illinois and across the nation gathered in Washington, D.C., in mid-May for the National Association of Realtors Midyear Legislative Meetings to lobby Congress for further housing stimulus, noted Pat Callan, president of the Illinois Association of Realtors.

One new Obama Stimulus perk sparked by Realtor lobbying is lenders soon will allow first-time home buyers to use the $8,000 tax credit as a down payment on Federal Housing Administration-insured loans, said Shaun Donovan, Secy. of the U.S. Department of Housing and Urban Development (HUD). Previously, buyers would not benefit from the tax credit until they filed their tax return.

“A full economic recovery is not possible without a housing recovery leading the way,” said Callan, broker-owner of Realty Executives Premiere in Wheaton, who is suggesting that the $8,000 first-time buyer tax credit be expanded to include all home buyers at all income levels.

“A lot of first-time buyers are now in the market and taking advantage of the low interest rates, moderated home prices and the $8,000 tax credit available until December 1,” Callan said.

“Realtors are seeing more activity, more showings and we expect the spring housing market to begin full force,” Callan said.

Today’s rock-bottom mortgage rates now in the 4.9-percent range also offer some “great opportunities” for first-time and move-up buyers, Callan said.

Meanwhile, several Chicago developers have unveiled their own housing stimulus programs to spark sales and pull the market out of its tailspin.

One of the most aggressive and innovative is American Invsco’s stimulus program is offering below market 2.5 percent simple-interest mortgages for the next 50 buyers at 200 N. Dearborn, a 47-story condominium conversion in Chicago’s Loop,

Purchasers are required to place a 20-percent down payment to lock in the 2.5 percent rate on an interest only 10-year loan. Buyers who place a 10 percent down payment may choose another American Invsco plan that calls for principal and interest payments based on a 2.5 percent rate.

“Buyers at 200 N. Dearborn have a simplified loan-application process, and the credit score does not determine the interest rate,” said Nicholas S. Gouletas, chairman and CEO of American Invsco. And, no loan origination fees, or “points,” will be charged. Standard loan closing costs of 2 percent of the purchase price will apply.

Another unique provision of the stimulus plan is the “Reassurance Program,” special loan forbearance coverage provided in case of involuntary unemployment.

“If your lose your job anytime during the next 10 years you may skip your monthly interest payment for up to one year,” Gouletas said. “If you lose your job for more than a total of 12 months we will let you return the condominium, in saleable condition, with proof that the real estate taxes and assessments are current.”

American Invsco sold 12 condominiums at 200 N. Dearborn during the first two weekends of the stimulus program, said John A. Nitti, director of project management. Prices range from $271,200 for studios to $591,100 for the most expensive 2-bedroom, 2-bath penthouse. These are fully renovated units with new flooring and kitchens with deluxe cabinets, granite counter tops and stainless-steel appliances. For more information, call 312-558-1200.

C.A. Development’s spring “Home Buyer Stimulus Program” offers a special mortgage buy-down for qualified buyers that lowers the interest rate to 4 percent for two years on conforming loans at Edgebrook Glen, Mayfair Crossing and the Residences of Old Irving Park on Chicago’s Northwest Side.

“A second financing incentive offers six months of free mortgage payments—including loan principal and interest on conforming loans—or a $15,000 closing credit on immediate occupancy homes or new homes to be built at Edgebrook Glen and Mayfair Crossing,” said developer Paul Bertsche of C.A. Development. Call 773-631-9225 or visit www.cadevelopment.com.

At Eastgate Village, a condominium and townhome development at 2536 S. Martin Luther King Jr. Dr. on the South Side, New West Realty recently unveiled a mortgage payment protection plan.

If you lose your job within two years of the closing, New West is willing pay up to six months of your mortgage payment—up to $2,500 a month. Prices start at $239,900 on a condo and $355,900 on a townhome. Visit www.EastgateVillageChicago.com.

And, Fifth Third Bank is giving one year of complimentary job-loss insurance coverage to home buyers who apply for a purchase loan, said Howard Ackerman, head of the bank’s mortgage department.