How Much Does President Obama Still Owe on His House?

In June 2005, President Barack Obama paid $1.65 million to acquire his house in Chicago. How much do you think he still owes on it today? Stately Obama Manor (Image Source: Zillow)

Believe it or not we can actually answer that question using information from the President's tax returns, which he has released to the public! Combined with information about his mortgage, which the Washington Post has been kind enough to publish, we estimate that as of this month, April 2012, President Obama still owes approximately $806,000 on his residence at 5046 South Greenwood Avenue in Kenwood, Illinois.

Here's how we know. Since President Obama closed on the transaction to purchase his Chicago residence in June 2005, we estimated that his first payment would be in August 2005. Taking the original amount of the President's mortgage (approximately $1.32 million) along with his interest rate (5.625%), we used Hugh Chou's mortgage calculator to generate a full amortization schedule for the President's 30 year mortgage, which would apply provided that the President has never acted to refinance his mortgage.

President Obama's monthly mortgage payment on his Chicago residence is over $7,598. This combined total of just principal and interest adds up to $91,184 per year.

We then worked out what remaining principal would coincide with having made $47,564 in mortgage interest payments over a 12 month period of time, as he did for the 2011 tax year under the terms we know of his mortgage. That amount turns out to be almost $821,000, which represents the amount that the President still owed on his house in Chicago as of the end of 2011.

Looking ahead by four additional months down the amortization schedule to bring us up to this point in time, April 2012, would put the amount of principal still remaining on the President's mortgage at approximately $806,000. And that's how we arrived at this figure!

The President's Previous Payment History

Examining President Obama's previously released tax returns, we can reconstruct a good portion of the President's payment history on his mortgage.

For example, sometime in either December 2005 or January 2006, the President made an extra payment toward his mortgage of approximately $225,000. We base this estimate upon what the remaining principal on his house would have to be in order to accumulate just the $60,449 of mortgage interest payments by the end of the year, as reported on his 2006 taxes. If President Obama had not made the extra payment on his mortgage, he would have instead reported total mortgage interest payments for 2006 of around $73,000.

The $225,000 figure is not coincidental. Our best estimate of the actual value of President Obama's residence at the time he originally purchased it indicates that he overpaid by approximately $222,170. President Obama's released income tax records therefore provide evidence that indicates that he was fully aware that he had been taken to the cleaners in the transaction. So much so that he was willing to inject a substantial sum of cash into his mortgage for the sake of reducing his increased exposure to the risks of being fully underwater on his newly purchased house less than six months after making his first payment on it.

We also note that January 2006 saw the President's purchase of the so-called "Rezko" lot, a 10 foot wide by 50 feet long strip immediately south of the President's original property for $104,500 in cash. All told, we estimate that the President put nearly $330,000 of cash from his own pocket into his property in Chicago at that time. That would be on top of his original $330,000 down payment for the residence over six months earlier.

Using the same analysis methods as we did for 2006, we estimate the President made extra payment(s) totaling around $14,000 toward his mortgage in 2007, and in 2008, the President paid roughly an additional $31,000 toward his mortgage, above and beyond his regular monthly payments.

Since becoming President and moving to Washington D.C. to live at taxpayer expense in the White House, Barack Obama has made no extra payments toward his mortgage. The amount of mortgage interest paid during these years as reported on his taxes is fully consistent with only making scheduled payments for the remaining principal on the mortgage as reduced by the extra payments described above.

Data Sources

Obama, Barack. 2005 Tax Return, 2006 Tax Return, 2007 Tax Return, 2008 Tax Return, 2009 Tax Return, 2010 Tax Return, 2011 Tax Return.

Stephens, Joe. Obama Got Discount on Home Loan. Washington Post. 2 July 2008.

Other Sources

Image Credit: Zillow

Previously on Political Calculations

How Much Is Obama Underwater Today?

We estimate how much President Barack Obama's house in Chicago is really worth at the end of June 2011. He was most definitely underwater compared to what he paid for it, but we didn't ask whether he was underwater on his mortgage, which we couldn't answer at the time....

Is Obama Underwater?

We wondered if President Obama, like many Americans, was underwater on the house he purchased in 2005. It turned out that he was!

How Much Was Obama's House Really Worth When He Bought It?

We take you through the data for how we nailed down the value of Barack Obama's house in Chicago at the time he bought it.

How Much Is Barack Obama's House Worth Today?

We find, using the value of a comparable property sold in August 2008, that 1.43 million seems to be right after accounting for the luxury features his house incorporates! That doesn't include the additional strip of land he bought in January 2006, but turns out to be amazingly close to what we found using projecting data forward from the past. We've got the values bookended!

Return to the Rezko Lot

New information about the appraised value of the "Rezko Lot" led us to revisit our analysis of the transactions involving this lot and 2008 Democratic party presidential candidate Barack Obama we had originally presented in The House That Obama Bought

The House That Obama Bought

Now obsolete! Here, using that data and assumptions that we have replaced with new information, we showed that at a minimum, 2008 Democratic Party presidential nominee and current Senator Barack Obama (D-IL) paid $360,738 more than his house in Chicago was worth in 2005. At a maximum, he overpaid by as much as $468,502 for the property where his family now resides.

Barack Obama's Big Mac Attack

Our tongue-in-cheek look into the negotiations and transactions surrounding Senator Obama's purchase of his current home - kind of a fun introduction to the relative valuations involved, all in the context of a trip to McDonald's! Remarkably, even though we've redone all our calculations, this post stands the test of time!

Does Senator Joe Biden Have a House Problem? (Part 1)

We looked into suggestions that Senator Biden unduly benefited from the purchase of the property where he built his current home. We introduced our analytical method for projecting the value of real estate properties in this post.

Does Senator Joe Biden Have a House Problem? (Part 2)

Here, we looked into long-standing allegations that have dogged Senator Biden regarding whether or not he unduly profited from the sale of his previous home in 1996. We originally couldn't make a determination, but thanks to one of our intrepid readers, we were able to find that he did not. Also, where we first built a tool to do the math!