Monday, October 26, 2009

UNCLE SAM RESCUING DEVELOPERS WITH FHA LOANS AND TAX CREDITS

Uncle Sam is coming to the rescue of Chicago’s recession-wracked new-construction condominium market.

The one-two punch of President Obama’s $8,000 federal tax credit for first-time buyers and Uncle Sam’s 3.5 percent down payment Federal Housing Administration-insured loan program is helping rescue Chicago’s new-construction condominium market from a sea of red ink, experts say.

“Uncle Sam tandem programs—the tax credit and low-down payment FHA loans, along with affordable condo pricing set by developers, are helping move housing units this fall,” said condominium appraiser Gail Lissner, vice president of Appraisal Research Ltd. “And, there appears to be strong demand at the lower-priced end of the market.”

Nationwide, more than 1.4 million first-time home and condo buyers have taken advantage of the federal tax credit as of mid-September, including more than 51,000 families in Illinois, according to the Internal Revenue Service. The tax credit expires November 30th. To qualify as a first-time buyer you cannot have owned a home for three years before making a home purchase that qualifies for the tax credit.

The program has been so successful that Sen. Johnny Isakson (R-GA) has proposed extending the deadline for the tax credit until June 30th of 2010. Sen. Isakson also wants to expand the program to all home buyers as long as they earn less than $150,000 annually or less than $300,000 for married couples filing jointly.

If you are a first-time buyer hunting for an affordable new residence, now is a great time to shop Chicago’s new-construction condominium market where some of the best deals in decades currently are being offered. At Catalpa Gardens, a 126-unit mid-rise development at 1122 W. Catalpa Ave. in the Edgewater neighborhood on the North Side, 45 condo units were sold in 60 days following hefty price reductions of $50,000 to $150,000 per unit, said Paulette Rodriguez, broker associate with Jameson Real Estate, LLC.

“More than half of the sales are FHA deals and 75 percent of the buyers are first-time purchasers taking advantage of the $8,000 tax credit,” Rodriguez said.

Fourteen 2-bedroom corner units, with 1.5 or 2 baths and 1,100 to 1,400 square feet remain to be sold at prices ranging from $210,000 to $290,000, said developer Charles L. Cornelius, Jr., a partner in Catalpa Partners, LLC. Call 312-420-8648 or visit www.catalpagardens.com.

First-time buyers can double Uncle Sam’s $8,000 tax-credit deal to $16,000 at 1555 Wabash, a 176-unit new-construction mid-rise in the South Loop which was recently approved for FHA-insured financing, noted developer Ted Mazola, president of New West Realty.

“The buyer doesn’t have wait—we will hand you our $8,000 at the closing,” said Terrie Whittaker, president of sales and marketing for New West Realty. “All or part of the $8,000 developer credit can be used to buy-down the interest rate for a period time. This can dramatically lower their monthly mortgage payment.”

Prices of 1-bedroom, 1-bath units start at $192,000, while 2-bedroom, 1-bath residences begin at $262,900. First closings are underway at 1555 Wabash, which is 55-percent sold and ready for immediate occupancy. Call 312-922-1555, or visit www.1555wabash.com.

At 565 Quincy a loft and condo development in the West Loop, Belgravia Group not only is offing the $8,000 tax credit and FHA financing, but the company has unveiled a program that allows the buyer to accumulate down payment money over a 12-month period to purchase 1-bedroom and 2-bedroom units priced from the mid-$200,000s to the mid-$400,000-bracket.

Buyers put $5,000 down and they can move into 565 Quincy. “The monthly payment—covering mortgage interest, principal, real estate taxes and condo assessments—is as low as $1,565,” said Jody C. Williams, marketing coordinator of Belgravia Group. “Over the next 12 months more than 70 percent of the monthly payments go towards the purchase of their new home.” Call 312-207-0007, or visit www.565Quincy.com.