Buy-curious?

1. A spot from the city: CPAN program.
If you don’t mind a little extra red tape, the city’s CPAN (Chicago Partnership for Affordable Neighborhoods) program could put a stylin’ new condo within reach.

This partnership between the city and developers (mostly in appreciating neighborhoods) designates a number of affordable units for qualified first-time home buyers who meet household-income criteria (single buyers can make no more than $52,800, couples no more than $60,300).

If you qualify, and make at least 80 percent of the maximum household income, the city may provide additional purchase-price assistance by holding a second mortgage on your behalf at a very low interest rate. In the case of Chicago Public School teacher Kenzo Shibata, 27, the city subsidized $30,000 of the principal, which he is responsible for at 3 percent interest.

For the primary mortgage, Shibata shopped around and found his own broker. CPAN doesn’t require a minimum down payment, but Shibata put down 10 percent. (Some developers may require earnest money to hold the property.)

“Basically it takes away from the equity. I still stand to make a profit, but not as much because I’m accountable for that $30,000,” says Shibata. “What it does is it allows me to get a really nice unit in an up-and-coming neighborhood with a small down payment.”

The city also helps out first-timers in other ways: Check out the City Mortgage program, which provides qualified buyers with a fixed-interest loan along with a grant of 4 percent of the mortgage amount to cover down-payment and closing costs. And on October 7, the city hosts the Cavalcade of Homes, with free bus tours of affordable properties in 24 neighborhoods (tours begin at UIC campus; visit www.cavalcadeofhomeschicago.com or call 312-377-3409 for reservations).But there are catches. Buyers are limited to the units and neighborhoods available at any given time. (At press time, the CPAN page listed developments in five ’hoods, from Avondale to West Town.) In some cases, a lottery system is used because of high demand. Plus, the city takes pains to screen out opportunistic house-flippers, so prepare to have your credit and income thoroughly scrutinized.

And it wouldn’t be a government program without red tape: two prepurchase counseling sessions and double the usual paperwork. But the result can be a sweet pad at a killer price.

“This is exactly what I was looking for,” says Shibata of his West Lakeview condo. “It’s the nicest place of any of the friends in my peer group. I have friends who make way more than me, but they’re still renting.”Go to www.cityofchicago.org/housing for details or call 312-742-0637 to schedule an appointment to determine eligibility.

2. DIY: Save cash with a fixer-upper.
Are you an HGTV junkie? Do you enjoy trips to Home Depot? Can you handle living in a construction zone? Then you just might have the right stuff (and patience) to transform someone else’s dump into your castle. You could even make serious cash in the process.

That’s what Jeri Herrera, 32, and her partner did when they decided they wanted to trade up to a single-family home in 2004. They found a reasonably priced house in Avondale that had good “bones,” and got right down to work. “First, we did quick cosmetic things, a coat of paint here and there,” she says. “When we got the place livable, we started tackling larger projects.”

The previous owners of the 126-year-old house had made some impractical design decisions. For example, the bathroom upstairs was tiny. “When you were on the toilet, you had to sit on an angle because the sink rammed into your shoulder,” Herrera recalls. “We tore down the wall, put in another wall, and now it’s three times the size.”

In the kitchen, the cabinets and countertops extended into the hallway. They gutted it and put the old cabinets for sale on craigslist, stipulating that potential buyers had to physically remove them and pick them up.

By doing as much of the remodeling as possible themselves, Herrera estimates they saved about $50,000. And while she hasn’t yet had the house reappraised, she guesses they added about 25 percent to the purchase price.

Trips to the library for DIY videos, and Home Depot for advice and moral support helped Herrera gain the knowledge—and the confidence—she needed to tackle the numerous projects.

“We ordered brand-new kitchen cabinets through a friend and installed them ourselves. I bought Wiring 1-2-3 and moved the electrical outlets. The only thing I’d done before was help friends lay tile,” she says.When remodeling, it’s crucial to set realistic expectations and use common sense, Herrera advises. And don’t forget to give yourself a day off now and then.

“You have to realize, this place is your home,” she says. “Do one floor at a time, do one room at a time; finish that up and move on to the next one.”

3. Try a neighborhood where you can get more for your money.
Going the Lewis and Clark route can help you score the home you want, at a price you can afford. Take urban pioneers Harmony and Joe Spangler. In 2003, after years of paying rent in East Pilsen, Harmony, 28, and her husband, Joe, 30, decided they’d had enough. Their mortgage broker approved them for a $300,000 loan, but they knew something in the low-200’s was a better fit for their monthly budget.

That might be enough for a condo, but they had their hearts set on a two-flat. So they pushed their search further west—West Pilsen, Garfield Park and Little Village—to make it happen. “The guy who sold us this place bought it from an old lady for really, really cheap and he flipped it…we ended up buying it for $185,000,” Harmony says.

Now, the couple has everything they wanted in their Little Village home: a garage, an enclosed back porch and a basement for Joe’s painting studio. But the Spanglers are most proud of the backyard, which they’ve transformed into an urban oasis with colorful flower beds and an outdoor deck. And to help with the mortgage, they rent out the upstairs unit, usually to friends.

Before moving to a ’hood outside of your comfort zone, Harmony recommends searching the Citizen ICAM page on the city’s website (www.cityofchicago.org/police), where you can type in an intersection, address or school, and fun little dots show where everything from assault to drug dealing to prostitution went down. Keep in mind, the site only displays reported crimes, and it’s a good idea to scope the area in person during the day and at night.

4. No money down? No worries.
Six months after being laid off might not be the ideal time to go shopping for a home. But if you have stellar credit and a new job like Tracy Mayoh, 31, did back in 2003, you can get into the housing game even if you’re not flush with cash. In fact, there are plenty of mortgage products out there that require absolutely no money down.

“One of my good friends is a realtor,” Mayoh says, “and she gave me the name of a mortgage broker to call. I said, ‘I’m not planning on putting anything down. What are my options?’?”

Like many renters, Mayoh originally thought she needed to save 20 percent of the purchase price, which would mean waiting an eternity. But as she soon found out, paying all those cable bills on time really made a difference; her excellent credit score qualified for a 6.99 percent interest rate on a two-year ARM loan for the full amount of the purchase price. She even rolled the closing costs into the mortgage of her South Loop condo.

“At the time, that rate was pretty good for not putting any money down, and I figured I could refinance at a lower rate within that two-year period, which I was able to do,” Mayoh says. Three years later, Mayoh’s still in the same condo. And an entire neighborhood has sprung up around her. “It’s amazing how fast the value has appreciated,” she says.

5. Get a roommate.
Sometimes getting a pal to pay you rent can allow you to afford a much better place—and maybe provide a jump-start toward becoming a minimogul. Real-estate broker Jennifer Stanley, 38, didn’t own any property three years ago. In 2004, she was finally under contract for a one-bedroom condo in Uptown when a two-bedroom unit became available in the same building. She quickly switched gears and got a friend—who was in the process of saving up for her own first place—to move in and cover one third of the mortgage.

Stanley estimates she saved at least $8,000 by divvying up the mortgage and other living costs. “She took the other bedroom, and we split the electric bill, the Internet, the gas—that saved money. She had just changed jobs, so that allowed her to get enough time and money under her belt to be able to move in to her own place [a year later].”

With some strategic upgrades, like slate counters and ceramic tile, her investment appreciated 20 percent after only nine months. Stanley parlayed that profit into more real-estate: Now she owns a second unit in the building, a condo in Milwaukee, and another place down the street. “I basically got four properties starting off with $1,000 [earnest money for the first condo],” she says. “And it’s not something that other people cannot do.”

While she was the sole owner of the two-bedroom pad, Stanley welcomed her friend’s input on design and allowed her to store her unused furniture in the unit’s storage locker.

But be careful: Friends are friends, but when it comes to real estate, it’s all business. “I asked her, ‘Can you afford this much per month?’?” Stanley says. “We respected each other’s autonomy and talked about our [financial] goals. It’s important to get everything on the table.”