Neighborhood Stabilization Program
Neighborhood Stabilization Program (NSP) Facts and Frequently Asked Questions
MFA NSP funding for acquisition/rehabilitation has been awarded to the following subgrantees. Please contact them directly for more information about homes.
Rio Rancho home after rehabilitation.
YES Housing Inc. , Albuquerque . 12 homes in Valencia or Sandoval Counties).
Contact YES Housing for more information.
(505) 254-1373
www.yeshousing.org
Omni Development Group Inc.,
Albuquerque . 20 homes in Rio Rancho.
Contact Omni Development for more information.
Aaron Lohmann, (505) 792-4430, (505) 212-0855 fax,
aaron@omni-online.com
Bernalillo County Housing Department,
Albuquerque . 5 homes in Bernalillo County (outside the city limits of Albuquerque).
Contact BCHD for more information.
Christi Baker, (505) 314-0209 or Irene Serna, (505) 314-0208,
clbaker@bernco.gov
What is Neighborhood Stabilization?
$19.6 million in federal money has come to New Mexico to fund the Neighborhood Stabilization Program, or NSP1, which is part of the Housing and Economic Recovery Act of 2008. The money MFA administers, $8.7 million, is used to buy and rehabilitate foreclosed properties. Those homes will then be sold to families whose incomes are below 120 percent of median throughout the state. The cities of Albuquerque, Santa Fe and Las Cruces received their own NSP funding.
Allocations for programs are: Acquisition/Rehabilitation $7,924,280
FOR ANYONE INTERESTED IN PURCHASING A NSP PROPERTY:
Please refer to the first menu option under Neighborhood Stabilization Program "Subsequent Sales" for detailed information . Soft Second mortgage: for cost of rehabilitating the property to NSP guidelines, up to $50,000 or the difference between the new appraisal (lender's appraisal) and the purchase price, whichever is less. Zero percent (0%), non-amortizing, “soft second” mortgage, due within the prescribed affordability period if the borrower sells, refinances, or transfers the property to an ineligible household. The principal balance reduces annually based on amount of loan during the affordability period. Samples of the 2nd mortgage and note can be found below. · Eligible Purchasers: No first-time homebuyer restrictions , but must occupy as a principal residence for at least the affordability period, and not own a second home. · Housing Counseling: All purchaser(s) must complete at least 8 hours of pre-purchase counseling with a HUD-approved, MFA-certified agency. · Eligible Property Types: Properties must meet all applicable NSP guidelines. Properties must be owner-occupied single family residences (including manufactured homes built after 1976) which meet all secondary market guidelines for insurability. Properties located on Native American Trust Land that are in targeted counties may also be eligible for funding. · Maximum Loan Amount and LTV : The loan has a maximum loan-to-value (LTV) and combined loan-to-value (CLTV) of 100%. Down payment and closing costs may be paid by MFA as part of the 2nd mortgage.
CONSUMER 2ND MORTGAGE (after rehab)
CONSUMER 2ND NOTE (after rehab)
FOR THE PURCHASE OF FORECLOSED HOMES BY OUR SUBGRANTEES:
Do the foreclosed properties have to be purchased at a discount?
Properties must be purchased for at least 1 percent (1%) below appraised value.
Are these cash offers?
MFA will fund the purchase directly to the title company for closing, and will provide a Note, Mortgage and LURA to be executed and recorded.
Who is the “subgrantee”?
The subgrantee is who will be buying the foreclosed home. MFA has a contract with the subgrantee to perform the NSP work.
Why are there contingencies on the offers?
This program must comply with federal regulations and the contingencies reflect some of those regulations. The purchase agreement should have an addendum that states that the purchase will be funded by MFA at closing using Neighborhood Stabilization Program funds and that the offer is contingent upon (1) availability of funds, (2) receipt of a HERS report, (3) an appraisal and (4) an environmental review report. The subgrantee will order and pay for these reports. The subgrantee must ensure that the owner is informed in writing of what the grantee believes to be the market value of the property and that they will not acquire the property if negotiations fail to result in a an amicable agreement.
For more information contact MFA’s Debbie Davis at
