Stockton, CA - Neighborhood Stabilization Program (NSP)

Act Now and get in on the money!

Neighborhood Stabilization Program ~ $2 billion has been allocated to the Neighborhood Stabilization Program (NSP), which is in addition to prior allocations. Be on the lookout for announcements of participating cities / counties that are among the selected areas that will get some of these funds.

NSP is an extension of the prior Community Development Block Grant. Realtors and investors can team with municipalities to purchase foreclosed homes in blighted areas and then resell those homes to families at or below 120% of the area median income. Limit is that 25% of the funds must be used for families below 50% of the area income.

The City of Stockton and County of San Joaquin has started to offer a purchase assistance financing to eligible low- and moderate- income homebuyers seeking to purchase a foreclosed home in a NSP Priority Area in these areas. The City of Stockton is proposing to use $12.1 million of NSP funds that have been allocated by HUD to acquire and repair foreclosed residences; to offer down payment and closing cost assistance to low- to moderate-income homebuyers; and to demolish blighted structures. HUD set income maximum at 120 percent of area median income. In Stockton, that means $73,600 for a family of four.

Eligible Uses

NSP funds may be used for activities which include, but are not limited to:

• Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;
• Purchase and rehabilitate homes and residential properties abandoned or foreclosed;
• Establish land banks for foreclosed homes;
• Demolish blighted structures;
• Redevelop demolished or vacant properties

Requirements How do you qualify for the NSP?

1. Attend the necessary training (8 hr course)

2. Buyer to get pre-qualified by a Participating Lender (Must be a participating lender)

3. The property must be foreclosed

4. Property must be vacant at time of listing

5. The property can be any type of permanent residential dwelling unit, such as detached single family structures, townhouses, condominium units

6. Properties must be appraised by a state certified residential or general appraiser. The appraisal must be done within 60 days of the final offer to purchase.

7. When buying foreclosed homes from lenders or other mortgagees, the purchase price must be at a discount from the appraised value. HUD requires that the home buyer must seek the "maximum reasonable discount" from the seller. The minimum discount is 5% for each NSP property.

8. Properties must be located within an NSP Priority Area.

9. Households whose incomes are at or below 120% of area median income are eligible for this program. The following chart shows the maximum income limits.

10. Home buyers must not presently have an ownership interest in any real property.

11. Home buyers must attend and complete an eight (8) hour Homebuyer Education Class certified by HUD that is taught by one of the program's approved home buyer education providers. (see the end of the blog)

12. Home buyers must occupy the property as their primary residence.

13. At its own expense, the program will inspect every property to be purchased under this program and determine if rehabilitation repairs are required. If repairs are required, the program can provide a loan up to $50,000 for those repairs. Homes requiring rehabilitation that is estimated to cost more than $50,000 are not eligible.