Skip to main content

Search form

New Program Helps Communities with High Foreclosures, Preserves Property Values Downpayment assistance will help first-time buyers purchase foreclosed homes

Press Contact Only:
Margaret Matrone, NCHFA, 919-877-5606,
Connie Helmlinger, NCHFA, 919-877-5607,


North Carolina communities hit hard by foreclosures may now have help filling vacant, foreclosed properties and preserving local property values thanks to a federal program that helps families purchase their first home. The federal Neighborhood Stabilization Program (NSP) targets 23 North Carolina counties identified as having the “greatest need” based on foreclosure starts and other housing-related statistics.

The North Carolina Housing Finance Agency will use NSP funds to provide downpayment and closing cost assistance up to $14,900 to qualified buyers to purchase a foreclosed property using its FirstHome Mortgage, which is available to first-time buyers with low-to-moderate incomes. Buyers must invest $1,000 of their own funds when purchasing the foreclosed home, and the NSP funds can be used in conjunction with the $8,000 federal tax credit until that credit expires Nov. 30, 2009.

“These funds will help communities stabilize neighborhoods that have experienced foreclosures,” said Bob Kucab, executive director of the N.C. Housing Finance Agency. “Because foreclosures can be detrimental to surrounding property values, these funds will benefit the entire community.”

The NSP was authorized by the Housing and Economic Recovery Act of 2008 and developed by the U.S. Department of Housing and Urban Development.  The N.C. Department of Commerce Division of Community Assistance is administering the $48.85 million that was provided to the state and has awarded the funds to 20 local governments, nonprofits and other organizations.  The N.C. Housing Finance Agency received $4.2 million in NSP funds.

NSP funds can be used to purchase foreclosed homes in 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.

The NSP funds are offered as five-year, zero-percent interest, deferred mortgages that may be forgiven at the rate of 20 percent per year for each full year the buyer owns and lives in the home. Homeowners must be current on their mortgage when the five-year period ends.

Home prices cannot exceed $210,000. To qualify for the NSP loan, buyers must meet the Agency’s FirstHome Mortgage guidelines, including income limits. Maximum qualifying income limits vary by county from $41,900 to $73,800 for one-to-two-person households; limits are higher for larger households.  In addition, borrowers must obtain eight hours of in-person home buyer counseling from a HUD-approved housing counselor.

Buyers apply for the FirstHome Mortgage and NSP assistance through participating local lenders. [Editor: Participating lenders can be found at here.
To learn more about the N.C. Housing Finance Agency’s NSP home buyer assistance and how to apply, call 1-800-393-0988.

###

The North Carolina Housing Finance Agency is a self-supporting public agency. It has financed 191,000 affordable homes and apartments in the last three decades, including nearly 80,000 homes for first-time home buyers. To learn more, go to www.nchfa.com or call 919-877-5700 or 800-393-0988.