Neighborhood Stabilization Program Could Help You Buy a ForeclosureFrancine L. Huff
The government's Neighborhood Stabilization Program (NSP) could help you purchase a foreclosed home in a community that has been hit hard by foreclosures and property abandonment. Many communities have put together programs to receive a piece of the $6 billion pie that the federal government has allocated for the NSP. Here's what you need to know about purchasing a home through this program.
Grant money has been awarded to state and local housing authorities, as well as nonprofits that help low- to moderate-income families find housing. The money must be spent in communities hit hard by foreclosures and sub-prime mortgage loans. Organizations that receive funds through the program can use the money to:
- Redevelop demolished or vacant properties
- Establish land banks for foreclosed homes
- Acquire and redevelop foreclosed properties
- Offer down payment assistance to home buyers who obtain mortgage loans.
Mortgage Loan Help from NSP
So what does this all mean for you as a potential home buyer?
- You could qualify for a loan for down payment and closing costs on a mortgage. The amount varies by region.
- Only households that earn no more than 120% of the median income of the local area can qualify.
- Money received can only be used for mortgages to purchase a primary residence.
- Even if you get money through the NSP, you could still qualify for the government's $8,000 home buyer tax credit for homes purchased this year.
- You must take home buyer education classes to receive help through the program.
The NSP has gotten off to a slow start since it was put in place last year, but money is starting to flow into communities. Contact your local Housing and Urban Development (HUD) office to determine if your community has NSP funds to help purchase a foreclosure.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.