What is it?
The NSP Homebuyer Rehab Assistance Program provides financial assistance to low, moderate, and middle income households to become homeowners in neighborhoods that have been impacted by the high rate of foreclosure. Hennepin County will provide NSP financing to assist buyers with the down payment costs of purchasing vacant, foreclosed properties in target neighborhoods.
The Neighborhood Stabilization Program (NSP) is a federal program funded
by the U.S. Department of Housing and Urban Development (HUD) under the
Housing and Economic Recovery Act (HERA) of 2008. Hennepin County has specifically used the funds in creating the Neighborhood Stabilization Program Homebuyer Rehabilitation Assistance Program now known as the NSP Homebuyer Assistance Program, to stabilize home prices in the area through down payment assistance to buyers of eligible foreclosed homes.
Down Payment Assistance:
The minimum loan is $1,000 with the maximum of $10,000 in down payment assistance available to qualifying families under 120% of the area's median gross income. Households below 80% in median area income may be eligible for "affordability assistance" up to a total $30,000.
You must be under these income requirements to buy an NSP property.
The loan will be a forgivable, 0% interest, deferred mortgage that has a term based on the amount obtained:
- $1,000 to $14,999 - 5 year term
- $15,000 to $30,000 - 10 year term
The program will run concurrent to the first mortgage.
The loan must only be repaid if during the term of the loan, the property:
- is sold
- ownership is transferred
- is refinanced
- is no long the Borrower's principal place of residence
The loan takes second position behind the first mortgage unless otherwise approved.
The program loan may be used to pay:
- Upfront costs of purchasing a residence, but not the entire cost
- Up to 50% of the required down payment
- Necessary costs incurred by the Borrower associated with the purchase, including: private lender origination fees, credit reports, fees for title evidence, fees for recording and filing of legal documents, attorney fees, and private appraisal fees.
Any remaining funds from the loan will be disbursed when the property title is transferred to the Borrower. Any funds remaining after closing will be used towards the mortgage or a prepayment of the NSP loan.
The loans are considered a "Special Mortgage" and counseling must be received before any refinancing.
Who is Qualified?
The program in Brooklyn Park is offered to households with gross income* less than 120% of the area's median gross income as follows:
#
of people in household
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
max
income
|
$70,500
|
$80,550
|
$90,600
|
$100,700
|
$108,750
|
$116,800
|
$124,850
|
$132,900
|
Additional program assistance is available to households with gross income less than 80% of the area's median gross income as follows:
#
of people in household
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
max
income limit
|
$44,800
|
$51,200
|
$57,600
|
$64,000
|
$69,100
|
$74,250
|
$79,350
|
$84,500
|
*Gross Income Includes:
salary,
commissions, bonuses, earnings from employment (part or full-time),
interest, dividends, tips, gains on sale of securities, annuities,
pension, royalties, veterans administartion compensation, net rental
income from all sources, alimony, child support, public assistance,
sick pay, social security benefits, income from assets, business
activity or investments, unemployment, estate or trust income and
miscellaneous income.
To calculate your gross income, download this Income Calculation Sheet.
Additional requirements for the Buyer:
- You cannot own a home or have an ownership interest in another property
-
You must occupy the property within 60 days of closing, and the property
purchased must be the main and only residence of the Borrower.
- The buyer must contribute at least $1,000 of personal funds towards the
purchase of the property.
- You must complete the "Home Stretch" homebuyer training course
from a HUD approved counseling agency and submit the participation certificate with
the application.
- You must be able to qualify for a first mortgage.
- You must fulfill all obligations on time in order to remain
eligible for the program.
- You must not have a previous load that ended in foreclosure
within the last 5 years.
- You must purchase an Owner's Title Insurance Policy.
- You must be a U.S. Citizen or a legal U.S. Resident (have legal
immigration status)
- You must meet all requirements
What Properties are Eligible?
The property must:
- Be unoccupied and foreclosed
- Be located in either Brooklyn Park, Brooklyn Center,
Champlin or Richfield
- Be discounted a minimum
of 1% below the current market value
- Meet Environmental Review requirements
- Not exceed the maximum value of $276,683 for a single
family unit
for sale price (CLT properties cannot have improvements that exceed
this limit)
- Properties must be single
family housing,
which includes: detached single family unit, a townhome, a condominium,
a manufactured unit with the lot, or a cooperative or mutual housing
unit.
- Be the Borrowers' occupied, principle place of residence
- Meet all construction and rehabilitation standards,
including any
hazards, ie. lead paint. *An inspection will be conducted for
this,
but is soley for this purpose and the Borrower is advised to obtain an
independant inspection before purchasing any property
What Properties are Not Eligible?
A property that is:
- Not foreclosed (short sale properties, etc.)
- Not in one of the specified cities
- Located in a 100-year flood plain
- Not on a fixed foundation or without the property owned
underneath
- Currently occupied
- Recreational or seasonal property
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