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Neighborhood Stabilization Loans

Neighborhood Stabilization Loans. www.self-help.org. Neighborhood Stabilization Loans.  Neighborhood Goals Minimize cost of foreclosures to communities Turn vacant foreclosed properties into homes and assets for families with low-and medium incomes  Household Goals

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Neighborhood Stabilization Loans

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  1. Neighborhood Stabilization Loans www.self-help.org

  2. Neighborhood Stabilization Loans  Neighborhood Goals • Minimize cost of foreclosures to communities • Turn vacant foreclosed properties into homes and assets for families with low-and medium incomes  Household Goals • Provide path to homeownership for first-time buyers and credit-impaired borrowers

  3. NSP Loans can finance: • 1. Acquisition and rehab by builders, local governments and nonprofit organizations in the 23 NSP-eligible counties • 2. Lease-to-purchase programs offered bynonprofit organizations • 3. Purchase of foreclosed homes by low and medium income buyers with credit and other qualification issues. Self-Help mortgages combine seamlessly with NCHFA second mortgage programs.

  4. Developer Line-of-Credit Self-Help offers a revolving line of credit to purchase and improve foreclosed housing. Borrowers Experienced non-profit and for- profit developers Term Up to 4 years Interest RatePrime plus 1%, variable Maximum L/V80% of total project financing Loan size $250,000 - $2 million

  5. Self-Help offers 30 year, fixed-rate, assumablemortgages to nonprofit organizations to purchase homes and lease them to people who plan to buy them (and assume the mortgage) within 5 years. Lease-Purchase Loans • Loan amount: 97% of the as-completed market value. • Interest rate: 6.75% (as of 10/15/09)

  6. Loan Product Highlights Nonprofit developers and for-profit developers can acquire foreclosed houses and make necessary repairs with the line-of-credit. Non-profits can offer lease/purchase as an additional option to selling a home if the market is slow. Aspiring home buyers with stable employment may participate in the lease/purchase program offered by the non-profit. The program will allow for the lease/purchaser to save additional funds during the lease/purchase period. At assumption, lease/purchaser must have at least a 620 credit score, debt-to-income ratios of 38/41 and sufficient savings to cover the down payment provided by the non-profit. If lease/purchasers are not ready to assume the loan within 5 years, the developer has the option of paying off the loan or finding a new lease/purchaser.

  7. Benefits to lease/purchaser Lease/purchasers can: • Assume the mortgage if they qualify within 5 year; • Pay off the non-profit borrower by finding their own loan to buy the home, when they can qualify; • Save for a down payment through the program; • Receive counseling and time to qualify for a conventional (FNMA) first mortgage and to apply for local and NCHFA homebuyer assistance programs.

  8. Developer Qualifications • Borrowers must have experience providing housing financed by HUD and local government or State agencies. • Borrowers may use NSP, CDBG or HOME grants for equity*. * Self-Help can finance properties in an NSP project that are not foreclosed but higher interest rates apply.

  9. Home Mortgages Self-Help specializes in making flexible,fairly priced, fixed-ratemortgages • to buyers repairing credit issues (minimum credit score 580) and who for other reasons need personalized loan consideration; • with a minimum borrower investment of 3%. NSP rates for foreclosed properties are lower than for other Self-Help loans. Self-Help loans combine seamlessly with NCHFA and other home buyer assistance programs.

  10. Self-Help and City of Charlotte NSP: Peachtree Hills Self-Help has acquired 17 homes and sold 9 with 4 under contract. The median sales price is $83,000. Homes are less than ten years old and in decent shape. Median size is 1,475 sf.

  11. Interested in more information? Call us to discuss your plans and your project. We want to help you turn your community’s foreclosed properties into stable homes. ____________ Ron Bodkin – 919-956-4688

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