Chitownproperty

There is a fair amount of confusion about the new $8,000 tax credit available to qualifying first-time home buyers. In the past, first-time buyers could get a $7,500 credit, but it had to be repaid to the government over time. The new credit does not have to be repaid, and can be claimed on either your 2008 or 2009 tax return. For instance, if you bought a home for the first time in 2008, but have already filed your taxes without taking the credit, you can claim it on your 2009 returns. Essentially, it is a one-time gift from the government toward the purchase of your first home.

The video above from the Illinois Association of Realtors explains the tax credit in more detail, as does Mary Ellen Podmolik in her weekly column in the Chicago Tribune.

In a press release last week, National Association of Realtors president Charles McMillan applauded the Federal Reserve’s move to purchase an additional $750 billion on mortgage-based securities from Fannie Mae and Freddie Mac and up to $300 billion in Treasury notes. “Greater numbers of home buyers will be able to purchase a home, and homeowners facing challenges will be able to refinance into better terms,” he said. “We already are experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed’s move will push affordability conditions to the best levels in 40 years.”

Editor’s note: This post was my daily entry today at Chicagoist. I’m not normally this lazy, but I cross-posted it here because it seemed especially relevant to our clients

Still waiting for that $100 refund from Peoples Energy? Yeah, so are we. And it seems that we’ll be waiting a little longer while they haggle with the Illinois Commerce Commission over the wording of the settlement in which they agree to reimburse natural gas customers $100 million, or $100 each, for allegedly overcharging them between 2000 and 2004.

The ICC was expected to finalize the settlement yesterday, but Peoples Energy balked at a final change to the wording that indicated they had acted “imprudently.” The Sun-Times reports that Peoples Energy filed a statement with the ICC saying they, “have not and do not admit any wrongdoing or liabilities in the settlement.” And here’s $100 million to remember that too, because we always hand out nine-figure settlements when we don’t do anything wrong. Once Peoples Energy is finished passing the buck, it will take up to 30 days to begin crediting customer bills with refunds.

Of course, they might be a little testy with the ICC because they just nicked them for $500,000 for failing to comply with gas meter inspection regulations. State and federal law requires that gas companies inspect meters for leaks on a regular basis, but over the past five years Peoples Gas has only checked only 25 percent of its quota. Of course, that’s not their fault either: they blame residential customers who aren’t home or ignore requests to let inspectors in.

A quick rundown of this past weekend’s local real estate news sections:

• Ever wonder how builders can work through all that snow? Contractors don’t slow down during winter months, but they do have to take special precautions to make sure concrete and masonry cures properly.
• The cost of living in college dorms has risen so high that some students have been finding ways to apply for government-subsidized housing intended for low income families. But starting next week, new rules passed by Congress will take the student’s parents’ income into consideration in most cases, even if the student claims to be living independently.
• Home heating retailers say sales of wood-burning stoves are up anywhere from 30 to 50 percent this season as people search for lower-cost heating and cooking alternatives to gas.
• Maybe you can’t afford the dream of living off the grid in one fell swoop, but you can start using enough solar power to make a difference, little by little.
• Rising interest rates are starting to squeeze homeowners with adjustable rate mortgages, no longer able to bail themselves out by refinancing their home based on double-digit price appreciation.
• Having trouble choosing cabinet finishes? Check out this guide to new cabinet options.
• More buyers are making offers with home sale contingencies, citing longer market times as reason to safeguard their position before committing to a new home. In a hot market, submitting an offer contingent upon selling an existing home would weaken a buyer’s negotiating position, because other buyers would likely be willing to make an offer with no such restrictions. But as the market cools, more people are willing to take this risk in order to make sure they have the proceeds from the sale of their home in hand for a downpayment.

A state law intended to curb predatory lending practices is set to go in effect Jan. 1, but some of its restrictions are causing confusion among lenders. The law seeks to lower the foreclosure rate in Cook County by tracking loans made in neighborhoods with high rates of defaulted loans. As it stands, the law is rather ambiguous about which loans in what neighborhoods are subject to the new rules, so some lenders are afraid to make any loans in Cook County after the new year until the state clarifies the rule. The state promises to introduce emergency rules to clarify the situation soon.

The state of Illinois requires both mortgage brokerages and its individual employees to be licensed and registered with the state to prevent predatory lending. The state has also enacted strict laws prohibiting abusive lending practices. You can check the registration status of your mortgage broker by checking a web site run by the Illinois Department of Financial and Professional Regulation at www.obrelookupclear.state.il.us.

Illinois Gov. Blagojevich wants the Illinois Commerce Commission to demand that People’s Gas refund its customers $118 million, as recommended by the ICC two months ago. The refund is part of a settlement over alleged overcharging by People’s Gas in the winter of 2000-2001. The refund would come out to about $118 per customer, though the city thinks they should get more. They originally demanded $325.5 million, while People’s Gas only offered $5 million before arbitration. The refund may be long coming though, because the ICC lacks a chairman and one of its other commissioners has recused herself from the case. If the panel doesn’t enforce the refund, People’s Gas says they will appeal the decision to a circuit court.

Remember that scary story about how a Congressional commission recommended taking away tax breaks for mortgage interest and local property taxes? Well don’t get too scared yet. Illinois Rep. Jerry Weller (R), says he and six other Republicans have enough support to kill the proposal if it ever comes up for debate.

Chicago city officials have admitted that thousands of people overpaid their portion of the 50/50 Sidewalk improvement program, in which the city and resident were supposed to split the cost of sidewalk repairs. Senior citizens were supposed to get an even larger break from the city and pay just 25% of the costs. But records show that 96% of seniors and disabled people paid more than that. The city has no plans for refunding the money, but has issued a statement about the 50/50 program in general.