Springfield Area Blog

This is a great program just developed. Best of all, the $8,000 tax credit STILL applies!

Up to $14,999 Down Payment When Purchasing Foreclosed Property

New Program To Help Stabilize Missouri Neighborhoods

 

MHDC is offering a new product to help stabilize and rebuild the neighborhoods of Missouri hard hit by the housing downturn. The commission received $4.2 million from the Neighborhood Stabilization Program (NSP), which was part of the Housing and Economic Recovery Act of 2008. These funds are intended to be used for down payment and closing cost assistance for qualified buyers purchasing foreclosed property that will be used as the owner’s principal residence.   Qualified buyers may receive up to 20% of the purchase price (up to $14,999) to use for down payment and closing costs. Buyer must use MHDC First Place Loan program for first mortgage. NSP funds provided through a second mortgage with an interest rate of 0%, which is forgiven after five years of occupancy. First-time and repeat buyers are eligible. Purchase price must be discounted a minimum of 1% from the current appraised value. The appraisal must be completed within 60 days of the offer made for the property (we have been advised that an initial offer can be made, subject to the completion of the appraisal within 60 days of a final offer). NSP Appraisal Guidelines, available here . Borrower must receive eight hours of homeownership counseling from a HUD-certified counselor.  These classes fill up quickly, so it suggested that you schedule your class at your earliest convenience. The class must be completed before closing can occur. Borrower income limit is 120% of area median income, see Income & Price Limits. If the owner rented the property to tenants, no tenants may have lived at the property within 90 days.   First-time homebuyers utilizing this program are also eligible to receive the $8,000 federal tax credit for first-time homebuyers if the home is purchased prior to December 1, 2009.