NSP home purchase guidelines form package, with instructions

 

 

Listing NSP Properties: NSP Properties must be listed at their “selling price” which includes the acquisition + rehab up to appraisal. The special financing of the rehab amount as a forgivable loan from the NSP $$ should be included in the remarks and any other place that makes sense. We recognize this may leave certain purchasers out if they are looking for a lower priced home. You will need to market the NSP properties in other ways, such as the energy efficiency after rehab. Since appraisers obtain their comp data from the MLS, we could have a substantial and negative impact on the very markets we are trying to stabilize by listing at the artificially low price. 

This addendum should be used with all purchase contracts, along with a copy of the NSP Income Limits as stated in the addendum. Purchase Contracts should follow the following example:

 

Sales Price $140,000. Purchaser will obtain a loan of $100,000 (original purchase price) from an approved lender at a 30 year term proceeds of which, less actual seller incurred closing costs, will be paid to MFA directly. Purchaser will obtain a loan of $40,000 from MFA.  This amount may include up to 50% of the down payment amount, plus closing costs. This loan will be a “forgivable soft second mortgage loan” at 0% interest.  Purchaser will provide the MFA with a Note and Mortgage securing this indebtedness. MFA will mark the Promissory Note Satisfied and will release the mortgage with OMNI/YES Housing/BCHD as part of this transaction.

 

Note: the second mortgage loan amount will be no more than the difference between the original purchase price and the lender’s appraisal amount, or the cost of the rehabilitation plus the original purchase price, whichever is less. The soft second can be used to pay up to 50% of the down payment cost of 3.5% for FHA loans, and closing costs, with the balance up to $50,000 total applied as a reduction of the sales price. 

 

This checklist should be completed by whichever entity is providing the income qualification for the purchasers of the NSP property. This package of information MUST be sent to your NSP Program Manager before closing. The documentation is intended to provide MFA with enough information to verify that the purchaser is income eligible. Calculations will be verified and a confirmation of purchaser acceptability will be provided by your NSP Program Manager via e-mail. The package must contain the completed Income Calculation Worksheet and the Certification of Assets.. The checklist must be signed by the person performing the calculations.

 

Before the sale of the property closes the “setup” of the property will have to be updated to reflect the increase in soft costs for (1) utility bills not included in the original estimate, (2) property insurance bills not included in the original estimate, (3) the difference between the 5% of the sales price for developer fee paid at the original purchase and the full Developer Fee. Developer Fees are limited to the 12% of acquisition and site improvements, hard construction costs, professional fees, financing costs, and soft costs. The final portion of Developer Fee will be paid after the closing of the sale of the property to allow all costs and final documents to be accounted for.

 

These documents will be completed by your NSP Program Manager and provided to the title company before closing.

 

This checklist would be completed by the lender and sent to MFA upon loan approval.   MFA must receive a copy of the lender’s appraisal as soon as possible in order to calculate the amount of the second mortgage. The NSP Program Manager will confirm receipt of the package, along with any deficiencies, or will confirm completeness via e-mail.

 

Please fill in the NSP loan number and the property address on the form and provide it to your title company. The title company is to deduct the your (the seller) closing costs from the proceeds of the sale and send the balance of the funds to MFA via wire transfer. 

 

This information can be sent to MFA after closing of the sale of the home. All documentation must be included with the checklist or the payment of the final developer fee amount will be delayed. The Borrower Update/Verification Form provides our Servicing Department with the information needed to enter the second mortgage into our system. NSP Home Sale Disclosure to Buyer must be signed by the Purchaser at closing. The NSP Program Manager will confirm receipt of the package, along with any deficiencies, or will confirm completeness via e-mail.