Guided buy choices

HOME A-LOAN Aaron Mays got a $10,000 discount on his Bronzeville condo.

Those who believe the recession crushes all hopes of owning a home should talk to Aaron Mays. In October, the 23-year-old recent Northwestern grad purchased a one-bedroom condo in Bronzeville, and now he’s paying only $100 more per month than he’d been shelling out in rent for his former studio nearby. Taking advantage of the Partnership for New Communities grant program—one of a slew of new city-sponsored incentive offers available to first-time home buyers under the banner Find Your Place in Chicago—Mays got a $10,000 discount on his new $180,000 pad.

“The grant is the only way I could do this,” Mays says. “Otherwise, I wouldn’t have been able to buy right now.”

From grants on homes in select neighborhoods to discounts on purchase price for low-income home buyers to mortgage tax credits—new city and federal incentives (a full description is available at findyourplaceinchicago.com) can knock anywhere from a couple grand to $40,000 off the cost of a new home. But the programs do come with some strings attached, which, depending on the incentive, can include taking a required home-buying workshop or staying in your home a minimum of three years.

“Another problem with some of these programs is that if the real-estate value on your home goes up, you can’t make a substantial profit,” says Gary DeClark, managing director of Integra Realty Resources-Chicago Metro (566 W Lake St, 312-346-3200), who has worked with home buyers involved with Find Your Place in Chicago. “There’s a maximization on the profit you can make, and if you go over that, you have to start paying back that excess.”

While grant and tax-credit incentives place no restrictions on the resale value of a new home, programs that target low-income home buyers such as the Chicago Partnership for Affordable Neighborhoods and New Homes for Chicago provide substantial discounts on new homes but also limit the amount buyers can earn off their home’s resale.

“That’s why most people buy a home, to sell it 20, 30, 40 years later for a profit,” says Patrick Warneka, a professional photographer who purchased a two-bedroom, two-bath Andersonville condo a year ago with the help of the Chicago Partnership for -Affordable Neighborhoods. “If [my fiancée and I] sell this place, we’ll only get a small percentage [of the profit], about 12 to 15 percent, and the rest will go back to the city.”

Warneka says he’s not complaining. While the published price on his condo was $325,000, with assistance he got it for about $150,000. However, he’s also quick to point out that even with assistance, his home is still a major expense. Warneka and his fiancée fork out about 40 percent of their income to housing costs.

While those who receive housing discounts will have to put up with program drawbacks, they’ll also reap the rewards of building equity and boosting their credit scores—and having a place they can truly call their own. “Buying a home was always in my plan, and this program pushed me to do it now instead of waiting until I’m 25 or 26,” says Mays. “It doesn’t seem logical to rent when I can own for about the same price.”

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