Neighborhood Stabilization Program: 6 Months and Counting

Recently, I was on an appointment with a New Buyer Client in PG County. We were looking at a renovated cape cod owned by an Investor who bought it at foreclosure a few months earlier. She asked me about the NSP program. Though neither she nor the property qualified for this program it made me realize that it was a great idea for a post! So starting with the basics:

What does NSP stand for?

Neighborhood Stabilization Program

What is the program?

NSP is program that provides down payment and closing costs assistance to Buyers who purchase a vacant foreclosed home. This program is currently for homes located in Prince Georges County and is in one of the 33 specified zip codes.

As its name suggests - this program was developed to stabilize communities that were over burdened with foreclosures. By providing additional financial assistance, the county is making it easier for first time home buyers to purchase a home. In addition, by providing this incentive and limiting it to vacant foreclosed homes it has helped to reduce the number of vacant homes sitting stagnant in neighborhoods.

Who qualifies?

Funds are available to First time home buyers OR buyers who have not owned a property anywhere during the past 3 years.

Buyer's income must be 120% or less of the area's median income in an eligible zip code.

Any real estate agent licensed in MD may assist the buyer with the purchase but you must use an approved lender.

So you are a first time home buyer and want to use the NSP program to buy a vacant foreclosed home...now what?

1. Contact a participating lender (if you haven't done so already) to get pre-approved for a loan.
2. Attend the mandatory 8 hour housing counseling course by a HUD Certified Housing Counseling Agency.
3. Contact your favorite Maryland real estate agent to show you vacant foreclosed properties in on PG County's eligible area.
4. Place a contract on a vacant foreclosed home that you can afford.
5. Provide the ratified contract to your approved lender and make application for Mortgage and "Down Payment of your Dream" Loan.
6. Complete the loan package with the assistance of your Loan officer and Favorite Maryland Real estate agent. Satisfy any underwriter requirements of your Lender and NSP program.
7. GO TO SETTLMENT.
8. MOVE in!!!

The terms of your new loan:

• 0% interest deferred payment loan.
• Must be primary residence for at least 10 years.
• Loan repayment requirement declines the longer Purchaser remains in the home and there is no repayment if purchaser stays in the property for 10 years

If you are looking for a vacant foreclosure and need some assistance please contact me via email Cara@lnf.com. Between this and the $8000 tax credit there isn't a reason NOT to buy!

REVISION: Please keep in mind NSP regulations specify that the sales price must be one percent less than the appraisal value. In other words if the appraisal price is 100,000 then the sales price must be 99,000.