Many areas of Oregon have an abundance of foreclosed properties and there is a program to assist with that problem. The Neighborhood Stabilization Plan (NSP) is a community loan designed to assist buyers in financing a REO (Real Estate Owned – Foreclosure) home in eligible areas that have been hard hit by foreclosures. The dark areas showing on the map link: http://o.hcs.state.or.us/reser/NSP/googlemaps/5plus_3perplus.html, show the areas this program is designed for. Much of Springfield, part of Eugene and a lot of Lane County are in the dark area.
The program allows for up to a maximum of $50k or, 20% of the purchase price plus allowable closing costs, whichever is the lower. So on a $150k purchase with closing costs of $5k, the amount being lent could be up to $35k.
The interest rate on this loan is 0% and no payments are required until the home is refinanced or sold. This program isn’t just for First Time Home Buyers but works especially well for them.
Buyers can qualify so long as they do not make over 120% of the HUD median income for the county. For instance, a family of four in Lane County can qualify for the program with an income up to $68,650. If you are in another area or have a different size family, give me a call and let’s see where you stand.
Buyer is required pay at least ½ of the required down payment. So, if the FHA loan requires 3.5% down, the buyer will have to come to closing with a minimum of 1.75% in down payment. I suppose that means that if it is a USDA loan, the buyer would have to come to closing with 1/2 of zero, or nothing. LOL. A conventional loan will probably require a 5% down payment by the buyer to be able to work with conventional lending guidelines. We expect this program will most often be used in conjunction with an FHA 203b or 203k streamline loan.
Buyer may not have more than $15k in liquid funds after closing (retirement funds do not count). So, as you can see, this program is for people buying homes that don’t have a high net worth. It is designed to help buyers that may be struggling with their first purchase or a subsequent purchase but don’t have a lot of liquid assets.
This program is not for property flippers. If the buyer sells their home in the 1st five years after purchase, they would be subject to paying the NSP some of the net equity remaining after sale as follows:
Value to the client
Basically the buyer can receive up to 20% down payment and don’t have to increase the sale price to cover closing costs. This will greatly reduce their payments or allow for a buyer to qualify for a lot more home than they typically would.
Consider this scenario: the buyer is planning to purchase a $150k home with 5% down but is unable to find what they want in that price range, but that is the maximum purchase they can qualify for. Using the NSP program, they would not be required to have mortgage insurance (MI), so, for the same principle and interest payment (plus the amount for MI), they could qualify for close to $50,000 more of a purchase price, without changing their monthly house payment.
If you want more information about this program or any other lending program, give me a call at 541-342-7576/541-221-3455 Cell or e-mail me. This is also one of the down payment assistance programs that will be covered at the Alpine First Time Home Buyers seminars scheduled next week. Get more information here.
*This is not an offer to lend. 
Obama Refinance Plan For San Jose Homeowners AnnouncedHome Affordable Refinance Program Update Harp 2 Bay Area San Francisco California March 2012 Guidelines for Purchasing a 3 to 4 Unit Property with FHA Financing in Alameda, CA8 Year Fixed to 30 Year Fixed. You Can Choose Your Loan Term In San Jose
