CHAP tax credit renovation properties have been saving buyers a substantial amount in taxes for years. These types of Baltimore row homes hold more valuable because of the generous tax break. I did at recent blog titled 10 year CHAP tax credit renovations in Butchers Hill . That blog highlighted 3 CHAP tax credit renovations all in the popular Baltimore neighborhood Butchers Hill. Since that was published all 3 of those active Baltimore City homes for sale are now under contract and set to settle in March 2017.
When explaining the tax credit, most are vegue in the details. When I explain it to Baltimore City buyers, I try to give them round number within my example to keep things easy to calculate.
Here is the example that I tend to use:
CHAP appraisal before renovation is 100k
CHAP appraisal after renovation is 300k.
The “locked in” credit is 200k x 2.32 = $4640.00/year in taxes ($386.67/month)
So let’s say the state’s assessment after renovation is 290k.
Normal tax bill for the city portion is 290k x 2.32 = $6,728/year
CHAP credit is $4640/year
TOTAL AMOUNT OF CITY TAX $6728 – $4640 = $2088.00
When purchasing a CHAP tax credit house it is important to get the CHAP appraised amounts so that you can calculate the taxes that the buyer will be paying. The above example should help you calluclate but in the event you still have questions, please contact Suzie Coronel at suzie@CrabbyHomes.com or the cell number in the banner below.
If you are like most first time home buyers you might be overwhelmed by down payment and closing costs that come with buying a home. While a good agent will help you to negotiate seller help they should also be knowledgeable about the resources available to you through Live Baltimore. Savvy buyers can use these incentives combined with state programs leaving their out of pocket expenses next to nothing. As with the MMP there are certain prerequisites, but most first time home buyers are eligible for one if not more of these programs. Also, as with the MMP, you must attend the FTHB class, complete your one on one counseling, and receive your certificate to be eligible prior to entering a contract.
Home Ownership Assistance Program:
The community block grant (CDBG) you can qualify for $5000.00 toward your fist home.
You should know:
- Your household income should be less than 80% of the area median income
- This is a five year forgivable loan which means your balance is forgiven by 20% every year until you no longer owe, not a bad deal!
- You must receive a HQS (housing quality home inspection) on the property. This means you must use a home inspector with this certification.
Baltimore Employer-Based incentives: are among the easiest to understand, receive, and qualify for.
There are several, here are just a few of the most popular:
1. Live Near Your Work: provides between $2,000-$17,000 to homebuyers. The amount you are eligible for depends on where you work and where you buy in proximity to your work. You can ask your employer if they participate in this program.
2. Good Neighbor Next Door: This incentive is for Baltimore city teacher’s grade K-12, fire fighters/EMTs, and police officers. You must commit to living in the home for at least 3 years and must choose a home from city specific/HUD homes.
3. Baltimore city Employee Homeownership Incentive: is a deferred forgivable loan up to $5,000 that depreciates by 20% every year you live in the home. Employee for city agencies who are employed by the mayor and city council qualify. Also your mortgage can not exceed $417,000.00, you must put $1000.00 of your own money toward the purchase, and one person per household may apply.
MMP “You’ve Earned It” : is a special interest rate and down payment assistance program for those with high student loan dept.
- This is a deferred loan and will have to be paid back at time of sale of property without interest
- Buyer must have at least $25,000.00 in student debt
- Interest rate is a .25 percentage point under
- Mortgage loan cannot exceed $525,901.00
- Homebuyer must invest at least $1000.00 of personal funds
Buying into Baltimore: is a $5000.00 incentive that can be used to buy a home anywhere in Baltimore City. There are two events: a spring/summer and fall/winter. 20 individuals will be selected by a lottery to receive awards. You need to know:
- Mortgage amount cannot exceed $517,000.00.
- Applicants have ten business days after attending to enter into a contract on a home and submit the application to be eligible for the lottery.
- Winners must close within 60 days for being selected.
- Co-signers, cash sales, or owner financing are not permitted.
- No short sales, no foreclosures, and no new construction will be considered.
- Home buyer must invest at least $1000.00 from personal resources
Current mortgage interest rates are at a 2 year low. If you haven’t looked into refinancing, now is a great time. FHA rates are as low as 3.25% fixed. Fannie Mae rates are as low as 3.5% fixed. VA rates are as low as 3.25%. Coastal Lending Group has the ability to “lock and shop” the interest rate. Prior to closing, as the market improves, you can capitalize on the improvements with a lower rate or higher lender credit!
If you purchased a home with me or you are a friend, you know that my preferred lender is Jon Vitak of Coastal Lending Group. I have included his contact information in the event you want to review your loan with him. Tell him CrabbyHomes sent you!
Whether you refinance your mortgage or not, the current market dictates that you should at least see what your options are considering the all-time low rates we are experiencing right now. See below where your loan fits in.
• If you have a 3.75% or higher interest rate on a FHA loan, you may qualify for a FHA streamline at 3.375% with no closing costs (the bank pays the closing costs).
o No appraisal
o No income required
o Lower reduced mortgage insurance on loans originated prior to Jan 2015 (Saves about $42 per 100K borrowed)
• If you have a Conv/Fannie Mae loan above 4%, you may qualify for reduction. Current rates are 3.5% fixed (80% Loan to Value or lower)
o If you pay monthly mortgage insurance, you may be able to lower your rate and remove the MI
• If you have a VA loan above 3.75%. You should qualify for a 3.25% fixed rate with all closing costs paid. VA IRRL (VA Interest Rate Reduction)
o No appraisal
o No income required
o No monthly mortgage insurance
Jonathan Vitak, Owner/President
3600 O’Donnell St, Suite 1F, Baltimore, MD 21224
410-276-3404 (office) email@example.com
In case you need some help with a few real estate terms.
I’m what you may call an over planner, a scrupulous decision maker, an advanced weigher of options. Basically, I like to know the ins and outs, and dissect every pro versus con of every decision before taking a plunge – believe me I have the lists to prove it.
So, at the age of 32, having worked in the hospitality industry, the fitness arena, and in sales I found myself once again weighing options. Career change… Really? I mean, I had some good things going for me. I was paying bills, and putting some money in the bank while I was at it, so why rock the boat when it seems to be smooth sailing?
I’m not sure if it’s my greatest asset, or my greatest vice, but I have what you may call an “ambition issue.” I had a career, I’ve had a few, but always felt limited. I’d hit the ceiling with nowhere else to go. What could I do that would allow me to have no ceiling? What gives the people willing to work for it no limit to personal and earning potential to match a work ethic? What business allows you to simply work hard and see your hard work pay off? Where can intense motivation and energy actually see an equal reward? Real estate.
Yes, real estate, more specifically Baltimore real estate. Being through the daunting home buying process myself, I knew being a first time home buyer can be terrifying and that most the people in the world think of real estate agents as sleazy used car salesmen. I also knew that the industry is flooded with Baltimore Realtors, this was concerning to me. Could I do this and could I help maybe take the “ick factor” out of being an agent? I drilled every friend I knew in the business and began my lists. Pro – I love working with people, I love interacting and helping people especially during exciting times.
Pro -I not only have experience in sales, but was a top producer in my industry.
Pro – I’m well networked and versed in the many neighborhoods of Maryland. Things were looking up for ol’ Meighan Sweeney!
Oh, but wait, the Cons. Yes there were a few standing in the way of my starry eyed vision. By my calculations it was going to cost me just about a million bazillion dollars to get started (okay minor exaggeration,) but between classes, getting licensed, becoming affiliated with a broker, marketing, registering, signs, cards, and well I would go on but you get the idea; to make a long story short I was going have to drop some major coin if I was going to do this. Also, while I am driven and motivated, like so many things in this world, the reward was no guarantee, while the risk seemed ample. Also a major con, it would be a slow start into, from what I could tell, is a dog eat dog world.
Lucky for me, as I mentioned before, I had lots of friends in the biz. It was with their guidance, and their reassurance that I pulled the trigger, registered for classes, and hit the ground running. I’ve been told that real estate is a “business built on relationships.” I have to say, as things play out, not only is that completely true, but I am already not only capitalizing on my relationships but building a future upon them.
The picture above was taken this month, January 2016. I had my first settlement of the year and placed Nelson V. into the 21224!
Since the recent expansion of CrabbyHomes, we needed a new website to showcase the team. We are happy to announce that after over 3 long months of redesigning and tweaking, www.CrabbyHomes.com is now up and running with a brand new look! The fresh new site not only looks great but it’s truly helpful.
Buyers/Renters – you’ll be able to search homes and read about the different neighborhoods. On the new site you’ll also be able to understand the buying process, look up real estate terms, and inquire about a loan!
Sellers/Owners – you can reach out to us from the site to inquire about what your house is worth. Need something done to your home? CrabbyHomes has a ton of quality resources. Here you can find a few of our helpful contractors.
We hope you like the new site just as much as we do! While you are clicking thru, don’t forget to read up on how Suzie Coronel, Valerie Gatzke, and Meighan Sweeney can help you in this fast pace real estate market.
Don’t forget to let us know how you like the site, scroll up to leave a comment!