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Wednesday, May 4, 2016

Down payment assistance program could make home ownership a reality

Thursday, June 18, 2009

Missouri Housing Development Commission (MHDC) began administering May 26 a down payment assistance program through the Neighborhood Stabilization Program (NSP). This program helps homebuyers purchase foreclosed property as long as the property will be used as the owner's principal residence.

Missouri received $44.66 million from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant Program under the Housing and Economic Recovery Act of 2008. This program was designed with the goal of stabilizing neighborhoods in areas struggling with the foreclosure crisis.

According to MHDC, "(We) received $4.2 million of these funds to be used for a down payment assistance program for qualified homebuyers purchasing foreclosed property."

Qualified borrowers are eligible to receive as much as 20 percent of the cost of the home, capped at $14,999.

"The NSP funds are delivered in the form of a second mortgage with an interest rate of zero percent, which is forgiven after five years," according to MHDC. "The NSP loan is paired with MHDC financing for the first mortgage, which is a safe, 30-year, fixed-rate mortgage."

Prospective homebuyers must have incomes at no more that 120 percent of the median income of the county in which the property is located. Homebuyers also must receive eight hours of homeownership counseling and the home purchase price must be discounted at least 5 percent from the current appraised value.

Gigi House, mortgage loan operations coordinator of Great Southern Bank, said the median income of one person in Oregon County is $38,500 and gradually progresses as the number of income earners in the household rises.

"The current market appraised value must be established by an appraisal completed within 60 days prior to an offer being made on the property," according to MHDC.

First-time homebuyers using NSP funds are also eligible to receive the $8,000 federal tax credit if the home is purchased prior to Dec. 1, 2009. This tax credit will be claimed on first-time homebuyers' federal income tax return.

"This program gives Missourians a significant amount of buying power to purchase foreclosed homes in neighborhoods throughout the state that continue to be the hardest hit by the housing downturn," Greg Spurgeon, single family homeownership administrator for MHDC, said. "These purchases will help stabilize and rebuild communities."

According to House, there is no set deadline to apply for the HUD program. She said the program will continue as long as funds exist.

Great Southern Bank in Thayer is one of the certified lenders through the HUD program. Those interested in purchasing a foreclosed property can call the bank at 264-7104.

All MHDC loans are made through a statewide network of certified lenders and are serviced by U.S. Bank. Interested homebuyers should contact a certified lender to apply. A list of the certified lenders and other information about the program, such as income and purchase price limits, can be found on the MHDC Web site at www.mhdc.com.

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