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Neighborhood Stabilization Program
Mortgage Opportunities
General Background
The Neighborhood Stabilization Program ("NSP") administered by HUD allocates federal funding to 309 governmental entities throughout the Country for the purposes of purchasing or assisting in the purchase of vacant, foreclosed properties. The initial allocation of $3.9 billion is expected to be available to the recipient jurisdictions by late March 2009 with another $2 billion to be allocated this fall. These funds must be used in census tracts with high foreclosure rates and/or for consumers (owner/renter) earning less than 120% of the area median income (AMI). Twenty-five percent of these funds must be spent on consumers earning less than 50% of AMI.
Jurisdictions may use these funds to purchase, rehabilitate, or demolish Real Estate Owned (REO) properties or to assist homeowners in purchasing properties. Each jurisdiction was required to submit a plan to HUD regarding their proposed use(s) of these funds. Most jurisdictions plan to use the majority of their funding for acquisition and rehabilitation. These jurisdictions may also use some of the funds for down payment assistance and/or soft second mortgages for homeowners purchasing REO properties.
Consumer Lending Opportunities
The most important concern for all of the NSP recipients is their ability to ultimately dispose of purchased REO properties. Providing the necessary purchase mortgage financing to the end consumer is critical to this program's success. Mortgage Lending Officers ("MLO's") have a number of opportunities to assist these jurisdictions in meeting their goals.
Your Neighborhood Lending team, along with the Local Markey Delivery team, has been working diligently to reach out to NSP recipients across the country to offer guidance and assistance on the review/approval of down payment assistance programs, bulk REO transactions, and alignment of Homebuyer Education providers to support the required education.
Where to Obtain More Information
Click here to see the list of NSP recipients and their initial disbursement amounts.
This information will continuously be updated as more information is obtained about how the recipients are utilizing the funds.
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04/27/09 Introducing Bank of America Home Loans ...
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03/20/09 NSP Fund Information ...
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