Program to Help Residents Buy Bank Foreclosures for Sale
Housing officials in Forsyth County and Winston-Salem, North Carolina have partnered with the Center for Homeownership and financial institutions to help eligible buyers purchase bank foreclosures for sale for less than the properties’ appraised value.
Under the Neighborhood Stabilization Program (NSP), eligible homebuyers will be able to receive a maximum of $20,000 as deferred forgivable loan. The funds will be used by the eligible buyer as down payment for buying foreclosure houses, provided that the mortgage holders are willing to sell the properties for less than their assessed value.
The program also offers additional financial assistance for renovation of the foreclosed homes. The foreclose houses covered by the NSP program must be located in neighborhoods that have incurred or are projected to post high foreclosure rates.
Furthermore, the home buying assistance initiative is open to first time property buyers and families or individuals who have not purchased or owned a house for three years.
Eligible borrowers will not be required to pay back the loan under the NSP program if they opt to stay and live in the property for not less than 20 years. Additionally, homebuyers should have the properties under sales contract on or before July 18, 2010 in order to become eligible for the program.
Prospective buyers should have household earnings of equal to or not more than Forsyth County’s 120 percent median income which for a four-member family is $71,640. The median income restriction varies with the family size.
Forsyth County and Winston-Salem received a total of $2.625 million for their program. The NSP is made possible through the funds provided by the U.S. Housing and Urban Development to the North Carolina Department of Commerce. The program was initiated in 2008 with the purpose of helping communities and neighborhoods with high foreclosure rates.
An NSP hotline and Web site were set up to help those who want to participate in the program. In 2007, 834 houses in Forsyth County and Winston-Salem were foreclosed. The number of foreclosed houses went up to 1,012 the following year. And in the first seven months of this year, 452 foreclosure actions were already posted in the area.
Both Forsyth County and Winston-Salem were the first areas in North Carolina authorized by the Department of Commerce to start initiating the NSP.
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