TaxSmart Homebuyer Program Will Continue to Provide Incentives to Support New Homebuyers

January 26, 2022

City Council today passed an ordinance that authorizes the Commissioner of the Department of Housing (DOH) to continue to issue its Single-Family Mortgage Credit Certificate Program, known as the TaxSmart Program. This program provides homebuyers with a direct dollar-for-dollar reduction of federal taxes due to the Internal Revenue Service (IRS).

The TaxSmart Program provides a federal tax credit of up to $2,000 per year to home buyers for the life of the mortgage loan and thereby increases a home buyer’s income and income ratios utilized for mortgage loan qualification. Homebuyers can refinance their mortgage loans and retain their Mortgage Credit Certificate.

The new allocation of $75 million of the City’s activity bond volume cap to implement the new series will allow the department to issue Series 2022 Mortgage Credit Certificates to home buyers in the City of Chicago for the next three-year period (2022 -2024) assisting approximately 300 home buyers. Federal law requires program applicants to satisfy income and purchase price limits. Applicants who are not first-time homebuyers must purchase in a target area.

TaxSmart Series 2022 First-Time Homebuyer or Target Area Purchase Requirements:

 

Income Limits Non-Target Area Target Area

1- or 2-person household

$93,200 $111,840

3-or-more-person household

$107,180

$130,480

 

Purchase
Price
Limits
Non-Target Area Target Area
  Existing New construction Existing New construction
One Unit

$332,236

$332,236

$406,066 $406,066
Two Unit

$425,297

Ineligible

$519,807 $519,807
Three Unit

$514,112

Ineligible

$628,359 Ineligible
Four Unit

$638,908

Ineligible

$780,888 Ineligible

 

Since 2005, the TaxSmart Program has assisted 2,132 households with mortgages loans for a total of more than $321 million. TaxSmart Series 2019 has assisted 115 households with mortgage loans totaling over $23 million as of September 2021 – 50 of which are at or below 80% of the area median income (AMI). The TaxSmart program promotes homeownership in all Chicago neighborhoods thus increasing neighborhood stability.

 

 

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