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By Rachel Kytonen
rachel.kytonen@ecm-inc.com
Residents looking to purchase a foreclosed, vacant home in a designated targeted area within the city of Isanti are encouraged to apply for Neighborhood Stabilization Program (NSP) funds.
In late February, the city of Isanti was awarded $555,855 in funding for the NSP.
The NSP funding provides an incentive to homebuyers by providing down payment and rehabilitation assistance to purchase and fix vacant and foreclosed homes
On July 7, Isanti Mayor George Wimmer presented a new Isanti resident a check for $12,500 in down payment assistance and up to $21,500 for rehabilitation of a home purchased on Maplewood Avenue.
As of Monday, July 27, Lenee Hoffman, program manager with Central MN Housing Partnership, said they have received 11 applications for the NSP for the city of Isanti.
Of those 11 applications, they are currently processing eight applications in varying stages—of which one will be closing soon and four others will be closing in mid-August.
The NSP process is taking about 45 days to get everything done and obtain the funding, said Hoffman.
The NSP funding can be used toward the purchase of a vacant, foreclosed home located in the target neighborhoods of Villages on the Rum and the southwest quadrant of the city.
Hoffman explained each person can, as long as they qualify, receive $12,500 to be used toward down payment and/or closing cost assistance.
They can also qualify for up to an additional $15,000 to get their front end ratio (percentage of principal, interest, taxes, and insurance as compared to gross income) down to 28 percent.
Then if the home needs rehabilitation they can receive up to an additional $30,000 based on the rehabilitation needed.
Hoffman feels there are many benefits to applying for NSP funds.
“The resident receives funding to assist them in purchasing a foreclosed home,” Hoffman said. “This program also currently has funds to assist in rehabilitating the home they purchase if needed. These funds are all a 0 percent, deferred forgivable loan which is forgiven on a pro-rated basis.
“The homeowner has to live in the home for a period of either five, 10 or 15 years based on the total amount of NSP funds they receive,” Hoffman added.
Those interested in obtaining NSP funds are encouraged to contact the Central Minnesota Housing Partnership in the earlier stages of looking for a home.
“It would be best to start the application process before they have the house picked out and for sure before they have a purchase agreement signed,” Hoffman said. “That way we can make sure they are including the required new NSP addendum in the purchase agreement. We can also get some of the preliminary items accomplished, such as attending the required Homebuyer Education from a HUD approved vendor and verify their income.”
While Hoffman explained there is not a credit requirement for the NSP, the applicant has to be able to obtain a first mortgage product from another lender, and this loan cannot be a sub-prime loan.
Hoffman noted realtors and lenders need to be aware that as of July 23, the current discounted 15 percent off current market value was just dropped to 1 percent.
Realtors and lenders should also know there has been a change which requires an NSP funding addendum to the purchase agreement.
More information, including NSP applications and guidelines for qualifying income limits, can be found on the Central MN Housing Partnership Web site at www.cmhp.net.
For more information on the NSP contact Lenee Hoffman at Central MN Housing Partnership 320-259-0393 or by e-mail at Lenee@cmhp.net.
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