Modern Real Estate Practice in Illinois Eighth Edition Chapter 3: Concepts of Home Ownership ©2014 Kaplan, Inc.

Home Ownership Types of Housing –Apartment complexes –Condominiums –Cooperative –Planned unit developments –Retirement (or active adult) communities –High-rise developments –Converted-use properties –Manufactured housing –Modular (or prefabricated) homes –Time shares

Housing Affordability Mortgage terms Ownership expenses and ability to pay –"Rule of thumb" formula Investment considerations –Gain –Equity –Tax entitlements including 1031 Exchange Tax benefits - Capital gain exclusion - Deductions

Homeowner’s Insurance Coverage and Claims –Basic form –Broad-form –Special apartment and condominium policies

Coinsurance clause requires the owner to maintain insurance equal to at least 80 percent of the replacement cost of the dwelling (not including the price of the land). Homeowner’s Insurance

Federal Flood Insurance Program National Flood Insurance Act of 1968 Federal Emergency Management Agency (FEMA)