Neighborhood Stabilization Program: Free Money?
Posted on July 25 By Justin McHood
One of the hottest, most-talked-about mortgage programs here in Arizona is a program called the Neighborhood Stabilization Program.
The reason that this program is so popular here in Arizona is because there are many, many, many properties that are currently bank-owned and people are starting to buy these properties - either as an investment or as a primary residence.
And for people who are considering buying a bank-owned property in Arizona and living in the property, there is currently a fairly large pile of government grant money that is available to them.
Grant as in "free money".
Now, Arizona is not the only state with the Neighborhood Stabilization Program funds available but because I live and work in Arizona, it is the state that I am most familiar with. There are many - and possibly all -- states who have this program right now and here are some of the main ideas and concepts behind the program:
- It is for people who are going to purchase a home that has been foreclosed on and is currently considered "bank-owned".
- To be eligible for NSP funds, you must plan on living in the home and occupying it as your primary residence.
- How much money you can get in the form of a grant depends on how long you agree to live in the property as your primary residence.
- The maximum amount of money that you can get is up to 22% of the purchase price of the property.
- If you don't live in the property for as long as you agreed to, the "grant" becomes a "loan" and is due and payable at 0% interest -- meaning if you got $10,000, you will owe $10,000.
- You cannot refinance or move, you must keep both the loan and the home or the "grant" converts into a "loan".
- You must attend a home buyers education course prior to receiving the grant.
Now, this list is not an exhaustive list - but it gives you a pretty good idea of what kinds of stipulations there are to the Neighborhood Stabilization Program. Also, each state has different rules, so you will want to check into the rules that apply to your specific state.
A great place to start about learning about whether or not you could qualify for a Neighborhood Stabilization Program grant is on HUD's website for more information about the NSP program. Here is also a handy map of who to contact in your state about the Neighborhood Stabilization Program.
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