HUD Neighborhood Stabilization Program to help with financing of foreclosed property down payment

HUD's new Neighborhood Stabilization Program is designed to provide emergency assistance to local and state governments, like Eugene and Springfield to acquire and redevelop foreclosed properties. As I stated in a recent blog, Bob Briscoe, Eugene Planning and Development Department, announced to our Town Hall meeting that Eugene had recently received over $600,000 and Springfield over $300,000 under this program. The program is for owner occupied or non profit purchases only.

Both cities are currently working on program guidelines that will help in the use of this money, possibly in conjunction with existing programs like the FHA 203k Streamline. Preliminary thoughts about the use of the funds will be for owner occupied purchases in targeted areas in both cities. 25% of the funds must be used for very low income housing and will probably be done through some of the non-profit organizations such as NEDCO or Saint Vincent DePaul, both of whom have been very active in the local area.

The other 75% could be used a in similar form to the current HAP and SHOP programs as no interest, no payment seconds for the purchase of homes. The HAP and SHOP programs are currently capped at $10,000 and the new programs could have higher amounts available and also have a higher income qualifying threshold. Details are still being worked out as I post this.

The Neighborhood Stabilization Program (NSP) is authorized under Title II of the Housing and Recovery Act of 2008. A total of $3.92 billion was allocated to all states, particularly hard-hit areas trying to respond to high foreclosures.

Be ready for when these funds become available. This will be an exceptional program for anyone that is limited on down payment and closing costs and willing to purchase in one of the targeted areas. Bank foreclosures are often in need of repair so using the program in conjunction with the FHA 203k Streamline that allows repairs after closing is an excellent way to take advantage of this market. Call me today to make an appointment and get pre-qualified for the FHA program.

Authored by Fred Chamberlin, senior loan consultant, Eugene/Springfield Oregon, 541-342-7576