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NEW! Neighborhood Stabilization Homebuyer Program

Come home to Providence!
Providence Redevelopment Agency
Neighborhood Stabilization Program
Foreclosed Homes Purchase & Rehab
Program For Homebuyers
______________________________________________________
The City of Providence Offers Homebuyer's Purchase &
Rehabilitation 50% Equity-Sharing Loans!
The City of Providence wants to encourage homebuyers to take advantage of the current opportunities to buy and rehabilitate foreclosed, vacant houses in Providence neighborhoods......and make them their new homes.

Working with area lending institutions, the City's Providence Redevelopment Agency offers this program to allow homebuyers the opportunity to buy & rehabilitate vacant, foreclosed houses. If your income is 120% of area median or less, you automatically qualify for the Purchase & Rehab 50% Equity-Sharing Loan when you receive your home mortgage commitment.

NSP loan funds are being made available to encourage homebuyers to purchase foreclosed houses in need of repair.

Remember: You automatically qualify for the Purchase & Rehab 50% Equity-Sharing loan if you're income eligible and are buying a vacant, foreclosed house needing repairs AND are receiving an owner-occupant mortgage from a qualified area lending institution.

The HIGHLIGHTS

50% Equity Sharing Loans to HOMEBUYERS to buy and rehab formerly foreclosed houses.
To be eligible for NSP Purchase & Rehab funds, the foreclosed property must have been purchased directly from the lender and have the loan application applied for, approved and undergone an Environmental Review Statutory Check List BEFORE closing on the purchase.
20% homebuyer assistance for purchase. Owner-occupying buyers only.
· The house must be purchased for at least 1% BELOW the "As-is" appraised value. Both an "As-is" and "As-completed" appraisals are required.
· Rehab Limit: The Purchase & Rehab 50% Equity-Sharing Loan + mortgage amount may not exceed 110% of "As-completed" appraised value.
Households with incomes up to 120% of area median income: under $57,350* or a family of four with an income under $81,950* can qualify.
No monthly payments, No interest.
Proof of financial ability is required for any non-NSP loan rehab activity, 20% homebuyer assistance for purchase. Owner-occupying buyers only if required for occupancy.
No resale restriction.
Loan limits: $50,000/single family, $80,000/two-family, $100,000/three and four-family.
Minimum closing costs (recording fee).
Work inspection required prior to requisition payments
*2008 income limits. May change for 2009-10

What rehabilitation repairs qualify?
Housing Code violations must be corrected first

Mechanical systems: energy-efficient heating, plumbing and electrical work

Roofs, gutters, downspouts

Other exterior problems such as defective paint and siding

Energy-star appliance allowance

Kitchen and bath repair/replacement

Floor repair/covering

Wall/ceiling repair/paint

Weatherization and energy efficiencies - Windows, doors and insulation

Landscaping, trees, fencing (no chain-link)

Any other work required for healthy and safe occupancy as determined by the inspection.

PROGRAM REQUIRMENTS:
1. All rehabilitation work will require the applicant to obtain the necessary building permits. Copies of these permits must be on file BEFORE any NSP loan funds are disbursed.

2. All rehabilitation work must be performed prior to requisition and payment from loan proceeds. Work payments are made by check issued jointly in the name of the homebuyer/owner AND the contractor. No rehabilitation work performed prior to the loan closing will be paid for with NSP loan proceeds.

3. The assigned Inspector will determine all work eligibility for the NSP Rehabilitation Loan Program.

4. The assigned Inspector will estimate the total minimum cost for rehabilitation work required for occupancy, including work funded by other sources (if any). The applicant must verify the source of funding for all other necessary rehabilitation work associated with the Rehabilitation Loan, but not paid for by the NSP loan.

5. The homeowner will provide a detailed contractor bid for approval. The contractor doing the work must have - at minimum - a current Renovator Remodeler License (a lead license issued by the RI Dept. of Health) and contractor registration. A copy of the Renovator Remodeler License must be attached to the contractor bid.

6. A clearance to determine the property is lead-safe is required.

7. An inspector may require a contingency amount above the submitted work bid. The contingency will become part of the loan and, any portion unused may be used for any other eligible repairs.

8. If the inspector's estimated cost of the minimum work required is in excess of all of the rehab loan funds available, including NSP, the NSP loan will be denied.

9. All designated work must be completed with final inspection and occupancy within 12 months from the date of the NSP loan closing.

10. Illegal living unit(s) automatically disqualify the property for the program, unless the NSP loan is used to finance the removal of such unit(s).

11. Certified RI Housing Network homebuyer (single family) and/or a landlord training (multi-family) is required.

12. A lien will be placed on the property and remain until re-sale.

13. No NSP loan will be approved in conjunction with a sub-prime first mortgage or non-traditional predatory mortgage product.

Contact: Barbara Barone at 351-4300 ext. 405
email: bbarone@providenceri.com

Posted Saturday Aug 08