TO Be Or Not To Be....Neighborhood Stabilization Program Funding Available? That Is The Question

Here in this beautiful area of Southern Oregon where the Rogue Valley lays, surroundedby the serene beauty of the Siskiyou and Cascade mountain ranges, lakes, rivers and streams abounding, filled with fabulous family activities for her residents and visitors to enjoy, I find myself wondering if I just may have a bit of extra time to enjoy the wonderful place I live. It's summertime, temperatures are on the rise, there are SO MANY outdoor living opportunities available here, and I just might get out there and enjoy some of them.

Headed in to June, armed with some amazingly low interest rates and great program opportunities released, the buyers came out in droves. Hmmmm....may need to cut back a bit on some of those outdoor living dreams, because the Neighborhood Stabilization Programis approved and reservations are being accepted as of June 4th! Yippeee! Up to $50,000 in funding available to qualified buyers buying eligible properties, and a pretty wide range covered on the map of eligible areas.

Off go 7 families I am working with armed with the details of this program and how it may help them reach their goal of become homeowners. Out I go to share the details with Realtors whose clients might also benefit from having a "silent second mortgage" bearing zero interest and no payments to help them buy a home here in Medford, Central Point, Eagle Point, White City and even some of the more rural surrounding areas.

Along comes a "program update" bright and early Monday morning June 15th. This update removes what was determined to be a restrictive requirement of the Neighbrohood Stabilizaiton Program - a requirement that the bank/private party that foreclosed on the eligible home sell it for 15% less than current market value. This is good, right?Now, the property only has to be sold for 1-5% less than its current market value. This ought to help when the REO listing agents laugh when we mention this requirement, because they are marketing property in price ranges that are very active, with multiple offers being received on them, right? Those listing agents and the banks/government sponsored enterprises they represent want to know, does HUD and the State of Oregon and the City of Medford REALLY believe they will CHOOSE to sell the property for 15% less than its current market value when buyers are lining up at the door?

So, okay...maybe the eligible buyers won't get a property for 15% less than current market value, it will still be a fair deal, and any repairs the property might need will be covered by Neighborhood Stabilization Program funds, so they can still afford to do this right?

Wrong! Since these guideline changes will have a domino affect on other guidelines, the program funds have been frozen, approved buyers cannot use these funds to close their pending escrows, and the State has changed the status of the Neighborhood Stabilization Program to "Program Pending" and reservations are not being accepted. Neighborhood Stabilization Program information on the State's website has its own unique stamp, as do the State's Oregon Bond Loan program and Purchase Assistance Loan program.

I am confident the State and City will work the details out with HUD on this Neighborhood Stabilization Program, but the delays cut in to the time eligible buyers will have to close their purchase transactions using these funds - especially if they are trying to close escrow before the $8000 tax credit sunsets on December 1, 2009.

Thank God it's almost Friday...

See you at the closing table...eventually with Neighborhood Stabilization Program funds!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com