NSP PROGRAM OFF TO A GREAT START
The Neighborhood Stabilization Program (NSP) was established for the purpose of stabilizing communities that have suffered from foreclosures and abandonment. Through the purchase and redevelopment of foreclosed and abandoned homes and residential properties, the goal of the program is being realized. NSP1, a term that references the NSP funds authorized under Division B, Title III of the Housing and Economic Recovery Act (HERA) of 2008, provides grants to all states and selected local governments on a formula basis. NSP2, a term that references the NSP funds authorized under the American Recovery and Reinvestment Act (the Recovery Act) of 2009, provides grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive basis. The Recovery Act also authorized HUD to establish NSP-TA, a $50 million allocation made available to national and local technical assistance providers to support NSP grantees.
NSP1
Under NSP1, HUD allocated $3.92 billion on a formula basis to 309 grantees including 55 states and territories and 254 selected local governments. The program was designed to stabilize communities across America hardest hit by foreclosures. Grant agreements for these funds have already been signed.
NSP2
Under NSP2, HUD allocated $1.93 billion on a competitive basis to states, local governments, and non profit organizations. The program objectives and eligible uses did not change under the Recovery Act, but the allocation process and some regulations on the funds have changed. The deadline to apply for NSP2 funding is July 17, 2009.
NSP-TA
Under NSP-TA, HUD allocated $50 million on a competitive basis to TA providers supporting HUD’s community development program grantees and subrecipients. The NSP-TA program is open to both national and local TA providers. Applications are currently being reviewed, but new applications are no longer being accepted.
Nature of Program
NSP is a component of the Community Development Block Grant (CDBG). The CDBG regulatory structure is the platform used to implement NSP and the HOME program provides a safe harbor for NSP affordability requirements.
NSP grantees develop their own programs and funding priorities. However, NSP grantees must use at least 25 percent of the funds appropriated for the purchase and redevelopment of abandoned or foreclosed homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of the area median income. In addition, all activities funded by NSP must benefit low- and moderate-income persons whose income does not exceed 120 percent of area median income. Activities may not qualify under NSP using the "prevent or eliminate slums and blight" or "address urgent community development needs" objectives.
Eligible Uses
NSP funds may be used for activities which include, but are not limited to:
- Establish financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties;
- Purchase and rehabilitate homes and residential properties abandoned or foreclosed;
- Establish land banks for foreclosed homes;
- Demolish blighted structures;
- Redevelop demolished or vacant properties
Homebuyer Assistance
Homebuyers cannot receive assistance directly from HUD. NSP funds can be used to help homebuyers purchase homes, but they must contact an NSP grantee for application details. NSP operates on a national scale, but participation requirements may differ from one state or city to another. For information on how you may purchase a home with NSP assistance please contact an NSP grantee in your area.
Now is The Best Time to Buy With Rates On The Rise
Rates for 30-year mortgages rose for the second-straight week, Freddie Mac said Thursday.
The average rate for a 30-year fixed mortgage was 5.25 percent this week, up from 5.2 percent last week. Last year at this time, 30-year mortgages averaged 6.52 percent, Freddie Mac said.
Earlier this year, rates on 30-year mortgages fell to a record low of 4.78 percent, kick-starting refinancing activity. Last month, rates rose to nearly 5.6 percent after yields on long-term government debt, which are closely tied to mortgage rates, climbed.
The yield on the benchmark 10-year Treasury note rose to 3.70 percent from 3.67 percent late Wednesday.
"Bond yields rose slightly higher this week on market optimism that the economy may be stabilizing somewhat, and mortgage rates followed those yields,“ said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage rose to 4.69 percent, up from 4.68 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.75 percent, up slightly from 4.74 percent last week. Rates on one-year, adjustable-rate mortgages increased to 4.8 percent from 4.77 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point for 30-year and 15-year fixed mortgages. Five-year, adjustable-rate mortgages averaged a fee of 0.6 point, and one-year adjustable rate mortgages averaged 0.5 point.
Downpayment, Closing Costs Biggest Obstacles
Most Americans still consider having enough money for downpayment and closing costs to be the biggest obstacles to buying a home, according to the 2009 National Housing Pulse Survey, an annual survey released Thursday by the NATIONAL ASSOCIATION OF REALTORS®.
The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in seven years of sampling. Two-thirds of Americans think job layoffs and unemployment are a big problem; eight in 10 cite these issues as a barrier to homeownership.
“Homeownership is an investment in your future; however, saving for a downpayment and closing costs is still too great of an obstacle for 82 percent of house hunters looking to take advantage of the current market,” says NAR President Charles McMillan. “Monetizing the $8,000 first-time buyer tax credit for downpayment or closing costs on FHA-insured mortgages is a positive first step. Our hope is that the tax credit will be extended and expanded to all home buyers and will help bring stability to the housing market and enable more Americans to achieve the dream of homeownership."
Job Loss Mortage Protection for Homebuyers is Making it Easier
A growing number of job loss mortgage protection insurance policies help take the fear out of home buying, but the coverage -- sometimes over-hyped as a form of recessionary relief -- is not for everyone.
The not-for-everyone consideration isn't necessarily because of cost, the type of home you buy or the feasibility of such insurance, though they are issues to consider.
Unfortunately, for some homebuyers, the coverage simply isn't an option.
When it is available, there are a host of considerations consumers must ponder before buying.
Simply put, for policy holders, job-loss mortgage insurance pays your mortgage when you lose your job -- to a point. Typically paid direct to the lender, policy benefits can cover principal, interest, taxes and insurance, if all items are included in the original mortgage payment.
The coverage can be a good deal if you fear job loss, if you have no other financial back up should your employment end or if you know you later can't refinance or modify your loan out of trouble and don't want to lose your home.
Today's job-loss mortgage insurance has become a growth industry spawned by the recession. The idea is to incentivise home buying -- offer protection against the shrinking economy, take some of the fear out of buying and, hopefully, you'll spark more sales. Because housing is a cornerstone of the economy, more sales, hopefully, also will help stimulate the economy.
Anyway, that's the theory behind the marketing.
Consumer advocate Mark Eisenson isn't sold on the coverage. He says buying job loss mortgage insurance may be a sign you haven't taken care when buying a home in the first place.
"Losing a job is more than a nuisance. It can be a catastrophe. Unfortunately, job loss insurance is something you only want if you are overextending yourself by buying a house you can't really afford, at a time when you have real concerns about losing your job," said Eisenson, co-author of the new e-book "Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis."
Once only the product of traditional insurers, job-loss mortgage protection now comes from a variety of sources.
• Traditional insurers -- See: InsuranceAgents.com and Mortgage Guardian.
• Home builders for new homes -- Offering policies are: Toll Brothers; Lennar; Ryland and others.
• Banks, credit unions, lenders -- The Bank of America has long offered a policy that covers not only job loss, but also hospitalization, disability and death.
• Real estate agents -- For example, Keller Williams offers coverage through the Rainy Day Foundation.
• Realty associations -- At least one, the California Association of Realtors (CAR) offers coverage.
"This program is a big success and all buyers who use a Realtor are eligible. All qualified first time buyers should definitely enroll in this program because the restrictions are few," said Julia Truesdale Keady, president of the Silicon Valley Association of Realtors.
Down Payment Assistance Programs in North Carolina
First Time Home Buyer
Programs in North Carolina
Complete First Time Home Buyer Programs Available in North Carolina.
The state agency created by the legislature in North Carolina to offer first time home buyer programs is the North Carolina Housing Finance Agency. Here is a summary of the current first time home buyer programs that are offered:
First-Time Home Buyer Mortgage
We offer 30-year, fixed-rate FHA, VA, USDA, and conventional mortgages at interest rates that are below market rates to first-time home buyers. FHA loans are insured by the Federal Housing Administration; VA loans are guaranteed by the Department of Veterans Affairs for eligible veterans; USDA loans are guaranteed by the U.S. Department of Agriculture for rural areas; and conventional loans are insured by a private mortgage insurance (pmi) company. This insurance is paid to the lender if the buyer defaults on the loan. Loans are available through participating lenders.
Down payments are usually 0% to 3% of the sales price. VA, USDA, and conventional loans offer 100% financing to qualified buyers.
Down payment assistance up to $7,000
Home buyers who need help with the down payment and closing costs may qualify for interest-free, deferred second mortgages up to $7,000. You pay $750 from your own funds, and the loan pays up to $7,000 of the balance.
Payment on the principal isn't due until 30 years from the date of the loan. Payment is due earlier if you sell, transfer, or refinance your home; if your loan goes into default; or if the home ceases to be your principal residence.
Second mortgage up to $20,000
You also may be able to qualify for assistance through selected nonprofit or government agencies that offer deferred second mortgage loans of up to $20,000 for the purchase of their newly constructed homes.
Mortgage Credit Certificate (MCC)
If you meet the income qualifications but do not qualify for the First-Time Home Buyer Mortgage due to credit problems, the type of home you are purchasing, or a high ratio of debt to income, we may still be able to help you through a Mortgage Credit Certificate (MCC). This federal tax credit was authorized by Congress to assist home buyers with moderate and low incomes.
For complete details on the North Carolina Housing Finance Agency Grant, visit NC Bond information for the Charlotte NC area.
Dwindling credit lines mean less cash in times of trouble
I have a home equity line of credit for $50,000. I have had it for five years and owe nothing on it. As I recently lost my job, that line of credit is a means to survive. My question is, do I try to grab all of it at once as a financial cushion, or would that send up red flags? Should I grab $45,000, and leave a little room at the top? Is that less obvious or less damaging for my credit score? Is there a different optimal amount to take? My equity in the house is conservatively $190,000.Your question is particularly timely, since many lenders and creditors are clamping down on lines of credit that they deem too risky – which these days is apparently everyone.
I have heard from sources who work for credit card companies that the government is requiring lenders and creditors to have cash on hand equal to, in some cases, 40 to 50 percent of the credit that has been extended. To the regulators, the fact that you haven't borrowed from your home equity line of credit up until this point doesn't mean that you won't eventually tap it to help you make it through a tough time, like a job loss.
So, if you have a $50,000 line of credit, the government might require your lender to have $10,000 to $20,000 in cash on hand, just in case you borrow against your line of credit and then default.
I'm hearing from creditors that these requirements for cash on hand are unsustainable, given how much credit everyone has been extended over the past two decades. So everyone's credit is going to be clamped down.
For example, if you have a credit card that you haven't used in 12 months, the lender may close it or reduce the amount of total available credit. We're hearing from thousands of Americans who have had their home equity lines of credit reduced or closed. Not only does this make it difficult to access the credit you've so carefully preserved, but it will also tarnish your credit score.
Credit experts say that 30 percent of your credit score depends on the credit you have available. Having less credit available (because the credit card company or HELOC lender has cut you off) will take some points off your credit score.
To your question: You have to tread delicately. If you don't take money out of your credit line, you may be one of those who end up having the credit limit cut and later regret that you didn't take the money out when you could. But taking a sizable amount of money without the means to pay back the funds can put you in a precarious situation.
Let's think about how this would play out: If you tap 80 to 90 percent of your line of credit, you will hurt your credit score at least a little. But if your credit line is cut substantially, that too might hurt your credit score, as you'll have less available credit.
Optimally, you'd never tap more than 25 to 30 percent of a line of credit. In your case, you'd only want to take $12,500 to $15,000 – anything more than that could lower your score a little, depending on other factors in your credit history. But since you might actually need the cash, it's better to take it now rather than want it later and not be able to get it.
Just remember, this isn't play money. It has to last until you find a new job, and then you have to pay it back, with interest.
Remember, your home equity line of credit is tied to your house, so if you stop making the payments, you will put your house at risk of foreclosure.
Some see promise in industrial real estate
Charlotte's Beacon Partners started construction of two manufacturing-distribution buildings off Interstate 77 in north Charlotte late last year.
In a real estate slowdown, the project illustrates faith in “the resilience and diversity of the Charlotte region's economy,” said Jon Morris, Beacon's industrial partner.
But through the first two months of this year, his competitors in the industrial market have been on the sidelines. No permits were issued in January and February, typically slow months for construction, compared with four permits during those two months in 2008.
The race is on to help homeowners
The Obama administration on Wednesday began the most ambitious effort since the 1930s to help troubled homeowners, offering lenders and borrowers big incentives and subsidies to try to stem the wave of foreclosures.
People with mortgages as high as $729,750 could qualify for help, and there is no ceiling on how high their income can be as long as they are in danger of losing their homes. Interest rates on loans could go as low as 2 percent for some. Many homeowners could see their mortgage payments drop by several hundred dollars a month, and some could save more than a thousand dollars a month.
Administration officials estimate that the plan will help as many as 4 million people avoid foreclosure, at a cost to taxpayers of about $75 billion. In addition, the Treasury Department said it intended to follow up with a plan to help troubled borrowers with second mortgages, which many homebuyers used as “piggy-back” loans to buy houses with no money down.
Attendance plan proposed for new school
Charlotte Mecklenburg Schools has posted four student assignment proposals for the new Mint Hill High School scheduled to open in fall of 2010.
The new school, located in the Clear Creek Business Park off Blair Road in Mint Hill, should help relieve overcrowding at Butler, East Mecklenburg and Independence High Schools.
Buyers Want Quick Response from You
CALIFORNIA ASSOCIATION OF REALTORS® economist Leslie Appleton-Young says a recent survey by the group shows that over 50 percent of prospective home buyers want a response to their telephone inquiries within 30 minutes.This makes it crucial for real estate professionals to carry a BlackBerry, iPhone, or other personal digital assistant at all times.
The poll also indicates that 80 percent of buyers search online for two months before contacting a sales associate, and 40 percent search for practitioners through Google and then view their Web sites or social networking sites.
After finding a professional to work with, they view about a dozen homes before making a purchase
