Welcome Home Heroes Financing Package

Launched to honor those who sacrifice to safeguard our freedom, Welcome Home Heroes is open to all qualified Illinois veterans, active military personnel, reservists and Illinois National Guard members.

The Welcome Home Heroes homebuyer financing package includes:

• a $10,000 forgiveable loan over two years for down payment and closing cost assistance
• a 30-year fixed rate mortgage that has an affordable interest rate
• an optional mortgage credit certificate to reduce federal income tax liability

Who is Eligible?

• Veterans (who do not need to be homeowners)
• Active military personnel, reservists and Illinois National Guard members (must be first-time homebuyers)
• Buyers must qualify based on income and purchase price limits

How to apply?

Interested buyers must apply through a lender in their area. The program only applies to 1-2 unit residential properties in the State of Illinois purchased as a primary residence. The new home loan builds on the existing affordable home, SmartMove, also available through Illinois Housing Development Authority's (IHDA) lenders.

How does the tax credit work?

A mortgage credit certificate (MCC) enhances the benefit of the federal homeowner mortgage interest deduction. Homeowners with the credit are allowed to use 20 percent of their annual mortgage interest as a direct federal tax credit, resulting in a dollar-for-dollar reduction of their annual federal income tax liability. The remaining 80 percent of their annual mortgage interest will continue to qualify as an itemized tax deduction. To see a chart, visit IDHA.

 

The above information was taken from the Illinois Housing Development Authority website. If you have questions regarding this program, please visit IHDA's frequently asked questions.

Why Local Elections Matter

While elections for national and statewide office often capture our attention and stir our emotions, it's the races closer to home that actually have the biggest effect on us - and our wallets.

Municipal elections touch the value of our homes, our schools, the streets we drive on and the police and fire departments that protect us. Good local leaders can help communities flourish, while irresponsible public servants can drive them into fiscal insolvency.

Right now is not an easy time for our cities and villages. Like everyone else, they are still feeling the effects of the recession and looking for ways to make ends meet. To close their budget gaps, many are considering service cuts as well as tax hikes and other means of generating new revenue.

Unfortunately, that new revenue is often drained from the pockets of local homeowners in the form of property taxes and measures such as water bill deposits and building permit fees.

It's not fair - nor is it a good idea - to balance a budget on the backs of homeowners. Just ask your local REALTOR what effect that could have on your ability to sell your home in the future.

Due to the nature of our work, we closely align with the needs of homeowners. From fighting to protect mortgage interest deductions on the national level to thwarting onerous taxes and codes locally, REALTORS serve as homeowners' tireless advocates. We watch your back by monitoring local government activity for issues that might interfere with private property rights, or affect your ability to buy, sell or maintain your home.

We urge you to pay attention to local elections and vote on April 5th. Take some time to study the backgrounds of - and meet - candidates for city council, county board and school board, for example. Be sure and ask important questions such as:

• Do your candidates support property tax increases? If so, why?
• Do they support regulations that make it tougher to sell foreclosed homes?
• What is their position on transfer taxes?
• How do they feel about the regulation and requirement of home inspections?
• Are they considering any new property maintenance codes? If so, what are they?

Now more than ever, it's important to pay attention and make your voice heard - and your vote count. Let's work this spring to elect capable leaders who can help boost the value of our neighborhoods without placing an undue burden on homeowners and our communities.

Realtors Fight For Fair Assessments

Why are my property taxes so high? 

These days I'm getting a lot of calls like this, wondering, if there are so many foreclosures, short sales, and home sales are down, why is my assessed valuation still so high?

As you might expect, the answer isn't simple.  Instead of basing taxes on the number of properties in a district, Illinois law bases taxes on the value of properties.  Property taxes are the result of a formula which divides the value of taxable properties in the district by the amount of money a taxing district (think of your school districts, fire district, or mosquito abatement district for example) asks for (called a levy) to produce a tax rate.  The tax rate then is multiplied by the assessed value to determine the amount of property tax per parcel. 

Therefore, a vacant parcel will have lower taxes than a parcel with a home on it. The more expensive the home is, the higher the taxes. At this point the township assessor's office comes into play, they evaluate each parcel, and assign it a market value.  The market value is actually the product of the last three years of market values. Illinois law specifies "the last three years" to help offset any short term fluctuation in the local real estate market, which, until the last few years, worked pretty much as intended.

However, Realtors have seen declines in property value throughout the area since 2007, a full three years ago. However, property taxes have not fallen, nor have assessed valuations because township assessors exclude foreclosures and short sales from their market evaluations.

Realtors think this is wrong and are supporting Senate Bill 3334which amends the Property Tax Code so "compulsory sales" are reflected for the purposes of assessing value.  While this bill currently does not apply to Cook County (which has it's own unique system that classifies property for tax purposes) it would apply to DuPage and the other 100 counties in Illinois.

Realtors believe this, along with pressure from citizens to control the spending of their taxing districts, will help ease property tax burdens on homeowners.

At our recent Capitol Conference we reminded Senators and Representatives that when a homeowner gets a CMA (Comparative Market Analysis)  before selling their home, foreclosures and short sales are tallied as they do have an effect on the local property values.  The State of Illinois must ask assessors and taxing bodies to recognize this harsh reality when reviewing their tax rates and assessment practices.

What is this $3,500 transfer fee?

Nearly five hundred Realtors attended our annual Capitol Conference in Springfield this past Tuesday. This is the biggest Capitol Conference since 1976 and demonstrates the importance of housing issues for homeowners and legislators.  Our local area sent 124 REALTORS for a day long trip which culminated in REALTORS talking to Senators and Representatives about how some proposed bills would affect real homeowners back here in the DuPage and West Cook area.

Issue number one for us was a bill that prohibits something called a private transfer fee covenant.  A private transfer fee covenant would allow a person or entity to collect a fee to the creator of the covenant each time the property title is transferred. On a $200,000 home, this could add up to $3,500 per transaction.

Even in a good real estate market, homeowners don't need yet another cost added to the transfer of property.  REALTORS believe that the price of a home needs to be based on the prevailing market, and not artificially inflated by transfer fees, private covenants, needless government taxation or restrictions.  As experts in the local housing market our members spoke with Senators Cronin, Dillard, Pankau, Millner, Hultgren, Wilhelmi, Radogno, and Holmes about this important issue.

The REALTOR analysis fears that in addition to the burdensome cost, if such covenants were allowed in Illinois, a new "estate in real property" might be litigated for years in Illinois courts.  Illinois should protect homeowners by upholding existing law and the prevailing practice of Illinois law and not allow private transfer fee covenants.

This bill, known as Senate Bill 3747 has now passed the Senate and awaits action in the House.

OMG! TTYL! I Can't Text and Drive Anymore!

Effective January 1, 2010, it will be come illegal in the state of Illinois to compose, send or read an "Electronic Message" while operating a vehicle.  To make things easier to read, I'm just going to refer to the composing, sending or reading an Electronic Message as "texting."  The law is named Public Act 096-0130.  An Electronic Message includes, but is not limited to, electronic mail, a text message, an instant message, or a command or request to access an Internet site.  It does appear that the Act provides for a few allowances:

• A law enforcement officer or operator of an emergency vehicle can text so long as it is regarding the performance of his or her official duties.
• One may text for the sole purpose of reporting an emergency situation and for continued communication during the emergency situation. 
• One may text using their hands-free device or voice-activated mode in their car. 
• A commercial driver who reads a message on a permanently installed communication device designed for commercial vehicles, so long as the device is within the appropriate size limits. 
• One may text while parked on the shoulder of a roadway. 
• One may text while in neutral or park while in traffic.   

Additionally, Illinois lawmakers created Public Act 096-0131 to state that no one may operate a vehicle and use a cell phone in a school zone or on a highway in a construction or maintenance speed zone.  There are some allowances when a cell phone can be used, like emergency situations and with hands-free devices.

Not sure about you, but ST&D (Stop Texting & Driving) is going to be a hard one for me although I know it's the safer choice!  Texting is my preferred method of communicating.  I only call when I need to or when I've had too much coffee and can't stop talking.  What about you?

28,413 - 9,100 - 1 Home at a time

Getting into a home is hard enough without the economy working against you.

For first time homebuyers, as well as for experienced homeowners, the process of buying a home is often confusing, overwhelming, and an emotional experience. While most homeowners know their Realtor is a professional, guided by a code of ethics and who brings the calmness of a professional to the transaction.

What most homebuyers and sellers don't know is that Realtors are advocating for homeowners during those years between the consumers first purchase and the first time they sell. Through all the transactions a Realtor nurtures, the one constant is a commitment to serving the best interests of home buyers and home sellers. 

Today, Realtors are celebrating the passage of the $8000 Homebuyer Tax Credit (HTC).  You might recall that the original HTC, passed with considerable Realtor support, is one of a few stimulus programs to actually demonstrate success in the marketplace.  Realtors constantly monitor the marketplace and look for trends.  When our National Association of Realtors looked at the seasonally adjusted home sales for the six months before the HTC, and the adjusted sales following the HTC in Illinois we find an increase of 9,100 sales. 

9,100 sales, nine thousand one hundred families who otherwise would not have purchased a home. 

One could argue that 9,100 sales are not very much.  However, let's talk about all the other services, products, and labor that happen every time a home sells. Each seller spends money getting his or her  home ready for sale.  Each buyer spends money making their house their own after the closing.

A 2007 Realtor Group commissioned an academic study to find out how much economic activity is generated by the average home sale. The idea here is that like a pebble tossed into a pond, the ripple effect from the original sale moves through the larger economy. Think of it this way, when you are getting ready to sell your home, do you fix that screen door, repaint the living room, and put a new front door lockset on. Do you spend some time "spiffing up" and staging your house so you can get top dollar for it? Of course you do.

By conservative estimate, the 9,100 sales from the HTC supported about 8,400 jobs. A study by RCF at the University of Illinois estimates that each home sale sparks $28,413 in direct expenses.  For our HTC group, that represents $258,558,300. in direct expenses in the local economy. I would give a very rough estimate that the total "ripple effect" of $633,467,835. (I am not an economist, if anyone out there can calculate economic impact, I would welcome the information)

So, what good is the $8000 HTC? Besides encouraging 9,100 families to invest in homeownership, thousands of dollars were spent stimulating the economy. Tradesmen in the construction, plumbing, electrical, and repair trades had 9,100 new clients. Retailers who sell furniture, appliances, house wares, and hardware stores sold products to 9,100 new clients. Moving companies and rent a truck places also had 9,100 new clients. Lenders, finance companies, title insurance companies, attorney's, clerks, and Realtors continued to work, support families and pay taxes. All this because 9,100 people made the choice to buy a home.

These 9,100 families were on the fence. They could have easily held back and continued to pay rent. The HTC helped them take the step to achieving the American dream, homeownership.

Realtors also understand that encouraging homeownership helps support home values, protecting the equity homebuyers have spent years building. Our Realtor Association helps screen legislation from one as big as the HTC to helping defeat transfer taxes that drive up the cost of homeownership.

If you would like more information about the housing market in your neighborhood, talk to a Realtor. Each neighborhood is different and homeownership is more affordable than ever.

Bensenville Makes a Wise Decision

At the September 8th Bensenville City Council meeting, the City Council repealed the onerous Home Improvement Ordinance.

Bensenville homeowners no longer have to sign away their Fourth Amendment rights as part of an ill fated "Home Improvement" ordinance.  The ordinance dangled a very attractive loan to homeowners but had a heck of a requirement: you have to sign off your right to refuse the city inspectors access to your home.

The Fourth Amendment protects homeowners from unwarranted searches. It is our position that you just can't buy that basic constitution right.  While the previous city administration ignored the Realtors call to defeat this ordinance, the new administration listened to our arguments and found them persuasive. During the campaign, Realtors brought this issue up and asked for the repeal. While most people understand search and seizure when it comes to police work, most people forget that municipal inspectors are a government police force, they just enforce a code book.

While I researched a little of the history of the government searches I found out that this exact issue was one of the visceral and vital issues to our founding fathers. Every wonder why we have a Fourth Amendment in our bill of rights?

Before the American Revolution the British would use a writ of assistance to search the home of colonists for a variety of reasons.  Often the purpose was to discover seditious materials or prohibited or uncustomed goods. These writs were general warrants, in other words they could search everything and seize everything.

In 1760 King George II died, and all writs signed by the crown would expire six months after his death. A group of 50 Boston merchants petitioned the courts to hear their case against general warrants and writs of assistance.  Lead by James Otis, the group protested that the law should protect men in their own homes and businesses. Future President John Adams was in that courtroom and heard the men argue their case and he was impressed.  In fact, Adams later commented that the American Revolution was sparked that afternoon in that courtroom as those 50 men pleaded to be secure in their homes and private businesses.

Otis lost. 

More importantly, Otis was soon elected to the Massachusetts General Assembly where he helped pass legislation requiring warrants and writs to be issued "with cause" by a justice, judge, or justice of the peace."  The law passed. However, the colonial governor voided the law as in violation of English common law.

So important was this issue to colonists, it was included in the Virginia Declaration of the Rights of Man, a precursor to the Declaration of Independence and the Bill of Rights.

Each of us has a constitutionally protected right to be secure in our homes and Realtors take this right as sacred. Each home buyer holds a bundle of rights, rights that have been fought for and defended for many years.  Realtors are proud to stand with property owners and help them defend their rights against government intrusion.

For the homeowners of Bensenville, Realtors will continue to work with the city.  Offering our analysis, our experience, and our talents to the civic dialogue with the aim of preserving our freedom.

People in these hallways will tell you how to live your life

Congressmen heard your voice today.

It sounds kinda trite, but I sat with Realtors and two Congressmen today so the Congressmen could get a better idea of what is actually happening to people in the market.

John Veneris is a broker from Downers Grove, Illinois, and he lead the discussion with Congressman Biggert. Biggert is from Hinsdale and to be honest, I don't think she's moved in 30 years. That's pretty common for elected officials, their stock and trade is being embedded in the local community. Congresswoman Biggert has been on the zoning commission, a State Representative, a State Senator, and now a Congressman. And she does it well.

In a meeting like this we sit down with two or three things we want to tell the Congressman about, preserving the $8000 tax credit for first time home-buyers and maybe even extending the tax credit to all homeowners. Realtors are in a unique position here to be able to tell Biggert the personal stories of sellers and buyers as well as being able to look professionally at the market as a whole.  Biggert asked some very good questions, asking about buyers from all over her district and "thinking out loud" about potential bills. 

From her perspective, she agrees with us. However, she could tell us what the political climate is in Congress to pass rational and useful housing law. What does that mean? It means that she knows what the Democrat Speaker of the House and the Democrat Majority Spokesman of her financial services committee will allow debate on. It is always good to remember that good and bad laws are passed in ignorance unless you make your voice heard.

Two term Congressman Roskam was our other stop yesterday and the conversation swerved from residential real estate to the condition of the commercial marketplace.  Realtor and Illinois Association of REALTORS State President Patrick Callan is fluent in commercial deals and a lively discussion about what banks are doing, who can get a loan, and exactly why local banks are sometimes calling in good loans because bad loans are draining down their reserves. 

This is a serious problem and finding a solution will be important to making sure businesses survive and continue to employ people. As we were leaving Congressman Roskam commented, "Remember, there are a lot of people in the hallways of Congress who are willing to tell you how to live your life, you (Realtors) remind me that people prefer to make these decisions themselves."

Realtors really are the tip of the spear.  Realtors know the housing market in your local area. Realtors also can integrate that knowledge with an expert view of the larger economy.

While Realtors talk to Congressmen all year long on dozens of issues, these meetings are our most visible here in Washington DC. This is in many ways the invisible Realtor, the Realtor efforts that the consumer never hears about. But this is an integral part of who we are. Realtors are advocates for homeowners over the kitchen table, closing table, City Council desks, and down the halls of the United States Congress.

How Can I Afford to Live near where I work?

I was on Facebook this morning and one of my Realtor friends had just posted a new Downers Grove listing "that was perfect for first-time home buyers." Realtor "Joe" reminded potential buyers of the new $8000 tax credit.

And he went on to say...

and if the buyer has an income <$72,000 they might qualify for the Downers Grove MCC program which will stretch their buying dollar with an innovative federal tax credit. Call me if you want the details...

One of the hazards of working "inside" the housing industry is that we tend to throw around a lot of acronyms, including MCC. I can tell you that MCC stands for Mortgage Credit Certificate, but that isn't very helpful is it.

The short story here is that this MCC program makes more of your mortgage interest deduction deductible, thus reducing your tax liability, thus raising your income. There are income limits, of course, and the sale price of the home is also limited.  But if you would like to live near your work, but can't quite afford a home in that town the MCC could be an option for you.

Ask your Realtor about this special program to see if it is available in your area.

Property Taxes-Everyone's Favorite Subject.

Property values and property taxes are always a topic of conversation wherever I go. Everyone wants there home to be worth more but they don't want to pay higher taxes. This is alwayss the question from any buyer "What are the property taxes?".

Property taxes are important to any purchase. In today's economy, the means in which local municipalities, school districts, fire districts, library districts, etc. receive their funds is through our property taxes.  Those funds are paid on the assessed value of your home and the tax rate of the particular taxing body. The assessors can re-assess property every year, most people think it's every 3-4 years.

Assessors use 3 years of past sales to arrive at the current years assessment. For 2008 assessment, the years of 2005, 2006, and 2007 will be used to calculate the assessed value. If your tax bill jumped this year, it is because of the overall increase in prices resulting in increases in assessment.  If you feel your assessment and taxes are too high you can go through the tax appeal process for your particular county.

You should always take a look at the property tax bill for a home you wish to purchase to see if there are any special exemptions. Senior exemptions may be there and once you buy the home and they drop off, you will have a tax increase. Special service areas(SSA) may be a line item to pay particular attention to, also.

Just be prepared, know what's on your tax bill and you won't have any surprises.