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Neighborhood Stabilization Loans

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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

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1. Acquisition and rehab by builders, local governments and nonprofit organizations in the 23 NSP-eligible counties

2. Lease-to-purchase programs offered by nonprofit 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.

NSP Loans can finance:

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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 Rate Prime plus 1%, variable

Maximum L/V 80% of total project financing

Loan size $250,000 - $2 million

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Lease-Purchase Loans

Self-Help offers 30 year, fixed-rate, assumable mortgages to nonprofit organizations to purchase homes and lease them to people who plan to buy them (and assume the mortgage) within 5 years.

•Loan amount: 97% of the as-completed market value.•Interest rate:6.75% (as of 10/15/09)

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Loan Product Highlights

1. Nonprofit developers and for-profit developers can acquire foreclosed houses and make necessary repairs with the line-of-credit.

2. Non-profits can offer lease/purchase as an additional option to selling a home if the market is slow.

3. 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.

4. 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.

5. 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.

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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.

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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.

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Home Mortgages

Self-Help specializes in making flexible, fairly priced, fixed-rate mortgages

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.

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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.

Self-Help and City of Charlotte NSP: Peachtree Hills

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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.

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Ron Bodkin – 919-956-4688