Mortgage Credit Certificate (MCC)

Illinois Housing Development Authority Mortgage Credit Certificate (MCC) Program Highlights:

The Mortgage Credit Certificate (MCC) program is offered annually in selected areas of the state. This program is also called the TaxSmart program in the city of Chicago. It is a tax credit, which allows borrowers to reduce their federal income tax liability by an amount equal to 20 percent of the interest paid on a mortgage, up to $2,000 per year. A tax credit is a direct reduction of taxes due. The tax credit may be claimed each year the home buyer continues to live in a home financed under this program, up to 30 years.

Borrowers must be first-time buyers (except in targeted areas) and meet certain income limits and purchase price limits for the home they are seeking to 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 to be a first-time home buyer.

The tax credit may be used in conjunction with any loan product the lender offers, EXCEPT an IHDA loan. Therefore, the lender and borrower have the flexibility of loan of preference: adjustable rates, fixed rates, conventionally insured or government insured.
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. Homes must also be 1-4 units.
The home buyer must occupy the home as a principal residence within a reasonable period. 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.
The MCC’s are available only in selected areas of the state. A list of participating communities can be found within this section of IHDA’s Web site. Demand for the tax credit is very high, and is on a first-come, first-served basis.\

SmartMove

SmartMove Mortgage Products offer affordable interest rates and down payment assistance for borrowers of low to moderate income. Our programs are ideal for borrowers who need extra flexibility on sources of income or who have limited funds for a down payment and/or closing costs.

Features

• Offers up to $6,000 in down payment and closing cost assistance as a 10-year,
0-percent forgivable loan
• Maximum LTVs from 96.5 to 100 percent
• Conventional/FHA/USDA insured products available
• Fixed rate with terms up to 30 years
• Reduced mortgage insurance requirements on conventional programs by approximately 1/3

Qualifications

• Minimum credit score requirement: 620 (FHA and USDA loans); 660 (conventional loans)
• Buyer must contribute 1 percent or $1,000 of the purchase price, whichever is greater
• First-time homebuyer or qualified exemption
• Household income and purchase price limits apply
• Homeownership counseling is required

For more information about the SmartMove Mortgage Products, go to www.ihda.org.

203(k) Streamline

If you’ve been passing up buying homes that require cosmetic repairs for lack of funds to fix them up, we have a program for you. The Compass Mortgage Streamlined 203(k) loan eliminates much of the paperwork and simplifies the process to obtain rehab funds.
A Streamlined 203K loan is figured into the original loan balance of the home mortgage, resulting in one loan. It can be an adjustable-rate or fixed-rate mortgage. The mortgage balance can exceed the purchase price of the property at 110% of the appraised post-repair value.
No minimum loan balance required, and there is a $35,000 maximum. Borrowers must occupy the property. Property cannot be vacant for more than 30 days.
The Streamlined 203K loan allows for simple repairs that can be easily estimated and completed. Many are considered light cosmetic repairs, but still require hiring an approved, licensed contractor.

Here is a list of permitted repairs / improvements:

• Roofs, gutters and downspouts
• HVAC systems (heating, venting and air conditioning)
• Plumbing and electrical
• Minor kitchen and bath remodels
• Flooring: carpet, tile, wood, etc.
• Interior and exterior painting
• New windows and doors
• Weather stripping & insulation
• Improvements for persons with disabilities
• Energy efficient improvements
• Stabilizing or removing lead-based paint
• Decks, patios, porches
• Basement completion and waterproofing
• Septic or well systems
• Purchase of new kitchen appliances or washer / dryer

Repairs Not Permitted

• Landscaping or yard work
• Major remodeling
• Moving a load-bearing wall
• Room additions or add-ons to the home
• Fixing structural damage

Borrowers can select among licensed contractors. Compass will review the contractor’s experience, background and referrals. We will require a copy of the contractor’s estimate and the agreement between the contractor and borrower. There will be NO Do-it-yourself projects.

USDA

These loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

There is no required down payment. We will determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt. Loan terms are for 30 years.

Applicants for loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.

Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.