The City of Chicago is providing a 4% gift/grant toward closing costs.....

......and a subsidized rate - 6% - including up to 100% financing - with a reduced mortgage insurance rate.

First time buyers are eligible for purchases anywhere in the city. Non-first-time-buyers are eligible in "target areas."

It's a pretty nice deal considering the "one size fits all" rate - including expanded underwriting criteria for not-so-perfect credit scores. Also, the rate is below market when you calculate increases for 100% financing.

Individual income limits of $60,320-non-target-are and $72,000-target area (more for multiple borrowers).

Purchase price limits $324,000-non-target and $398,000-target area.

More information available @ www.cityofchicago.org

I thought I would throw this out there for anyone looking to buy, or know someone looking to buy, in the city. Not all lenders offer this program so if you are not aware of it you don't automatically receive it. Also, there are some Cook County programs available.

Funds are available on a first come first served basis. 100 million is available but we are not sure how long the program will be around.......I had to put some clients on a wait list but they received funds after a few weeks.

I SHOULD point out that there are some "recapture" provisions if you do not keep the property for 9 years.......BUT........they only kick in if your income is over the limit at time of sale/disposal of the property. Also, the income limits will be adjusted UP at about 5% per year.

For example: If the limit is 60,320(non target) when you close.......the limit will be $73,590 five years later ($60,320 x 122%).......Sooooo, if your income is not above $73,590 at time of sale you are not subject to recapture.

I wouldn't put one of my clients in this program if they were close to the limit AND intended to sell within the 9 year period. This probably isn't a good idea for, say, a doctor/resident expecting to triple their income but if you are someone with a defined pay schedule (teacher,fireman etc.) it's a no-brainer.

Another "safety valve" feature is the program will never take back more than 50% of your gain if/when you sell. If you don't make a profit, you don't pay recapture. This feature would protect someone who "hits it big" and sells within a couple years.