Neighborhood Stabilization Program

What is Neighborhood Stabilization?
MFA is administering $11.2 million for the Neighborhood Stabilization Program, which is part of the Housing and Economic Recovery Act of 2008. The money is being used to buy and rehabilitate foreclosed properties. Those homes will then be sold to families whose incomes are below 120 percent of median throughout the state.  So far, 55 homes have been purchased and 47 homes have been sold.

FOR ANYONE INTERESTED IN PURCHASING A NSP PROPERTY:

New Mexico Mortgage Finance Authority
Neighborhood Stabilization Program
Second Mortgage Guidelines (NSP 2nd Program)
 
Now is the time to buy a home and help your community grow. The following information will help you navigate the process to open your window to homeownership.
 
Program Requirements
  • Homebuyer(s) annual household income cannot exceed the amounts below, based on household size (anyone living in the house). In determining income, all wages and salaries of all household members 18 and older are considered, as well as other sources of income for the total household. Program income requirements are different than Lender income requirements.
2012 NSP1 Income Limits for Bernalillo, Sandoval, Torrance and Valencia Counties (Albuquerque MSA)
# in Hshld 1 2 3 4 5 6 7 8
50% 21,700 24,800 27,900 30,950 33,450 35,950 38,400 40,900
120% 52,000 59,400 66,850 74,300 80,200 86,150 92,100 98,050
 
The Income limits shown above are effective December 1, 2011
 
 
  • First mortgage debt to income ratios must be at or below 31%/43% - in line with FHA standard guidelines
  • First mortgage term is 15 or 30 year fixed rate, fully amortizing
  • Homebuyer only contributes half of the required down payment or a minimum of $500, whichever is greater
  • Homebuyer must occupy the home as their principal residence
  • Purchase price cannot exceed $200,160 for a single unit
  • Homebuyer must complete 8 hours of homebuyer education from a HUD certified counseling agency
  • NSP 2nd funds are available to purchase a NSP foreclosed residential property from one of MFA’s developers: 
o   YES Housing – listing agent Sean Remington, Prudential Sandia Real Estate, 505-307-4006
o   Kaspia Group – listing agent David Ray, OMNI Village Realty, 505-792-4430
o   Bernalillo County Housing Department – listing agent M. Mary Romero, Allstar Realty, 505-280-1551
 
  • The interest rate to be charged on all NSP second loans is zero percent (0%)
  • All NSP second mortgage loans are non-amortizing, “soft second” loans, secured with a note and mortgage and are subject to repayment criteria. The principal balance due on NSP 2nd mortgages will be reduced on an annual basis on the anniversary of the date of the loan (“Period of Forgiveness”) as follows:
    • If the original Principal amount of the Award is from $1 to $25,000, the Principal balance shall be reduced at a rate of Twenty Percent (20%) per year for five years, starting on the first (1st) anniversary of the date of this Agreement.
    • If the original Principal amount of the Award is from $25,001 to $50,000, the Principal balance shall be reduced at a rate of Ten Percent (10%) of the principal balance per year for ten years, starting on the first (1st) anniversary of the date of this Agreement.
    • The NSP 2nd mortgage does not have a prepayment penalty
  • MFA will not re-underwrite the loans for FHA Mortgage Loan Credit eligibility, but will provide pre-purchase and post-purchase review for compliance with MFA/NSP Program Policies
  • MFA will issue a Compliance Approval notice/letter on NSP second mortgage loan after the loan has been compliance approved by MFA prior to loan closing
  • MFA will service all NSP1 2nd Mortgage Program loans 

CONSUMER 2ND MORTGAGE (after rehab)

CONSUMER 2ND NOTE (after rehab)

MFA NSP PROPERTY LISTINGS  

YES HOUSING – Listing Agent Sean Remington, Prudential Sandia Real Estate, 505-307-4006

 

KASPIA GROUP – Listing Agent David Ray, Omni Village Realty, 505-792-4430

N-00067, 622 Chippewa Ct. SW, Rio Rancho (UNDER CONTRACT)

N-00072, 203 Veja Baja Dr. SE, Rio Rancho (UNDER CONTRACT)

N-00073, 509 10th Ave. NW, Rio Rancho

 

BERNALILLO COUNTY HOUSING – Listing Agent Mary Romero, Allstar Realty, 505-994-8585

N-00071, 1804 Corte Elicia SW, Albuquerque (UNDER CONTRACT)

 

FOR THE PURCHASE OF FORECLOSED HOMES BY OUR SUBGRANTEES:

Do the foreclosed properties have to be purchased at a discount? 
Properties must be purchased for at least 1 percent (1%) below appraised value.  

Are these cash offers? 
MFA will fund the purchase directly to the title company for closing, and will provide a Note, Mortgage and LURA to be executed and recorded.

Who is the “subgrantee”? 
The subgrantee is who will be buying the foreclosed home. MFA has a contract with the subgrantee to perform the NSP work.

Why are there contingencies on the offers?  
This program must comply with federal regulations and the contingencies reflect some of those regulations. The purchase agreement should have an addendum that states that the purchase will be funded by MFA at closing using Neighborhood Stabilization Program funds and that the offer is contingent upon (1) availability of funds, (2) receipt of a HERS report, (3) an appraisal and (4) an environmental review report. The subgrantee will order and pay for these reports.  The subgrantee must ensure that the owner is informed in writing of what the grantee believes to be the market value of the property and that they will not acquire the property if negotiations fail to result in a an amicable agreement.

What are the income limits for NSP?
All activities funded by NSP must benefit low and moderate and mid-low income persons whose income does not exceed 120% of the area median income (AMI).   For this program, low income means at or below 50% AMI. The income listing for the targeted counties can be found in the NSP section of MFA’s web page.
 

For more information contact MFA’s Debbie Davis at 505-767-2221

ddavis@housingnm.org