Government Offers Foreclosure Program to Help Blighted Neighborhoods
Posted by: Carleton Sheets in Vacant, Real Estate, Neighborhood Stabilization Program, government, Foreclosure, Down Payment on Jul 23, 2009.
As I mentioned in one of my previous blogs, there are many new, revised, updated, and extended government programs aimed at alleviating the foreclosure crisis ... so many that I am a little confused at times. Will the latest program replace one that didn't work as planned? Or why does the government think one program will work better than the rest?
I recently read an interesting piece of news concerning another new government program. The Neighborhood Stabilization Program (NSP) has $4 billion available for municipalities and individuals nationwide to purchase foreclosed homes---with certain stipulations.
This program offers a substantial amount of financial aid to low- and middle-income borrowers to purchase and rehab foreclosed homes in blighted communities. According to the article, qualified buyers must put down 3% of the purchase price as a down payment, and although they have to have at least 1% of that amount in cash, the rest can come from other sources. This raises the question: Can buyers use other government programs to cover the rest of the down payment, such as the $8,000 government program offered to first-time homebuyers?
Of course, there are stringent eligibility requirements for prospective buyers such as restrictions on the buyers' gross income, property type, and the property must be vacant. However, there are some great positive aspects other than the obvious ones of improving home values in blighted neighborhoods ... including NSP loans will sometimes cover ¼ of the purchase price, no interest on the loan (which ranges from 5 to 15 years), and no monthly payments. However, I don't quite understand how this will work. If buyers aren't required to make any payments until the end of the loan, what will stop them from living in the property for the 5- to 15-year loan term and then just move on? What are your thoughts on this?
For more information on the Neighborhood Stabilization Program, as well as lists of qualified properties, click here.
If you have ever taken advantage of any government programs, what was your experience? If not, are you considering it?
I'm looking forward to hearing from you!
