I just got off the phone with NC Housing Finance Agency (NCHFA) and found out that they are offering up to $14,900 in downpayment assistance and closing costs for the purchase of a foreclosure property. The assistance is in the form of a 5 year loan given to the borrower at 0% interest. It does require you to occupy and retain the home for that 5 years. 20% of the loan will be forgiven for each full year the buyer owns and lives in the home. At the end of the 5 years the buyer must be current on the mortgage to be eligible for loan to be fully forgiven.
When I spoke with the office this morning they had a small amount of funds left due to transactions that did not successfully close. A qualified NCHFA lender must reserve the funds to ensure that downpayment assistance funds are available at the time you decide to purchase. These funds are not endless and do not have a guarantee that they are always available. When they are gone they are gone so contact us today!
According to the NCFHA website the following is required to participate in this program:
- Buyer must qualify for a FirstHome Mortgage (determined by contacting a NCHFA participating lender). This is typically a little harder than a traditional FHA loan because they are giving such a substantial downpayment.
- Buyer must be a 1st time home buyer; buyer may not have owned and occupied a home as a primary residence in the last three years (subject to a one-time veterans' exception).
- Buyer must also qualify within income limits which range from a minimum of $56,000 statewide to $75,000 in larger metropolitan areas for 1-2 person households. The limits are adjusted upwards for larger households.
- Buyer must attend 8 hours of classroom or in-person counseling from a HUD-approved housing counselor prior to closing.
- Buyer must occupy the home within 60 days of closing.
- The foreclosed home must be for sale by either a bank, a bank holding company, a government agency, or an authorized REO designated entity (NCHFA REOs are not eligible).
- The home must be either a single-family home, a condominium, or a townhome. A manufactured home is not eligible.
- A home inspection must confirm that the home has no structural repair or deferred maintenance issues. All repairs must be made prior to loan closing. NCHFA cannot escrow or advance NSP funds.
- The sales price of the home may not exceed $210,000 and must be at a minimum 15% below the appraised value. The appraisal used as the basis for meeting this requirement must be dated within 60 days of the sales contract.
- The home must be located in one of the following 23 counties: Alamance, Brunswick, Buncombe, Cabarrus, Catawba, Cumberland, Dare, Davidson, Durham, Edgecombe, Forsyth, Gaston, Guilford, Iredell, Johnston, Mecklenburg, New Hanover, Pitt, Randolph, Rowan, Union, Vance, and Wake.
Not all lenders are qualified to administer this type of loan. Contact us today for a referral to a lender that can help! Real Living Realty Experts has extensive experience in working with foreclosure properties and can assist in finding a property that is eligible for this program