Tucson By Choice!: Stimulus Money To Purchase Primary Residence. 22% Second Mortgage. Zero Interest Rate. Call Your REALTOR! (1 of 3)

Stimulus Money To Purchase Primary Residence. 22% Second Mortgage. Zero Interest Rate. Call Your REALTOR! (1 of 3)

How can I buy a foreclosed home?The details are below.  This is the first program I've seen that really, really helps do two things:

  1. Get foreclosures out of circulation and off the market.
  2. Stimulate buyers to buy now.

HUD's Neighborhood Stabilization Program provides for 22% of the purchase price to be subsidized with a ZERO interest second loan.  The best part?  That 22% can be forgiven over a period of time.  (Details below.)

Grant money has been allocated for every state in the Union.  What does that mean to REALTORS and homebuyers?

What program can give you 22% of the purchase price, and what's the catch?

In Arizona, the grant program is called YOUR WAY HOME AZ.   Your Way Home AZ will provide second loans to eligible purchasers for up to 22% of the purchase price of the property.  Second loans will have a term of from five to fifteen years, depending on the amount of assistance, and will be forgiven at the end of the term if all program requirements have been met, and the borrower continues to live in the house.

 

NOTE:  AZ program is funded through HUD's Neighborhood Stabilization ProgramEvery state has a similar grant program

Click this link to check out your state:  HUD_NPS1

 

PROGRAM OVERVIEW

BORROWER REQUIREMENTS

  • The property you purchase must be your primary residence.
  • You must use a lender from the ADOH participating lender list.  (That would include Mike in Tucson at Sunstreet Mortgage, LLC) 
  • You must have maximum Debt to Income ratios of 31/43.  No exceptions.
  • You must have two months' reserves PITI (mortgage payment--Principle, Interest, Taxes, Insurance)
  • You must be AUS (Automated Underwriting) "Approve / Eligible."  That means pre-approved, with fully documentable application.
  • You must attend and complete an eight-hour Homebuyer Education class provided by an ADOH approved non-profit counseling agency (list provided by lender once you begin the process)

DOWNPAYMENT REQUIREMENTS

  • 3% downpayment required, of which 1% must come from the borrower's own funds, sourced and seasoned.  (That means we have to document where it came from, and how long you have had the money.)  2% can come from any other approved source.
  • Standard lending practices apply.  (Credit, income, documentation, etc.)

INCOME LIMITATIONS

Eligible purchasers must have household gross incomes not greater than 120% of the median household income for the county in which the home is being purchased.  The table below will help you determine if your household qualifies to buy a foreclosed home under the program.  (Talk with your lender before concluding that you don't qualify, as some types of income do not have to be included.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ELIGIBLE PROPERTIES

  • Foreclosed properties only.  Tax or mortgage foreclosure process must be complete.
  • Vacant properties only.  Federal guidelines do not allow occupants to be displaced.  The property must be vacant at the time of listing.
  • 1-unit single family homes, condos and townhomes are eligible.
  • Homes must meet minimum property standards.

HOME PURCHASE PRICE LIMITS

The maximum purchase price varies by county, minus 1% for program-required discount.

 

 

 

 

 

 

 

 

 

ADOH 2nd LOAN TERMS

  • 22% of purchase price
  • All loans are forgivable after a period of time, based on the amount of the loan
    • 5 years for assistance of $15,000 or less
    • 10 years for assistance of $15,001 to $40,000
    • 15 years for assistance of more than $40,000
  • All loans are zero percent interest with no monthly payment
  • The loan is forgiven at the completion of the term (called an "affordability period")

How can you get started, now that you've decided you would like to buy a foreclosed home as your primary residence?

Check out your eligibility on YourWayHomeAZ.com.

Call me to get prequalified for a 75% first mortgage, and Arizona Department Of Housing's "Your Way Home AZ" forgivable second mortgage.

PLEASE NOTE:  Once escrow is opened, the loan MUST CLOSE within 45 days. 

Notify your favorite REALTOR that you're jumping in with both feet, but don't go home shopping until you've been approved and entered into the system, and you're signed up for the required counseling.  This is important!

Tomorrow, I'll blog about the step-by-step process in Part 2!

 ___________________

I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.
Mike Jones (Tucson Mortgage Company, LLC): Loan Officer in Tucson, Pima County, Arizona
SUNSTREET MORTGAGE
Call me
if I can help you or someone you know with a purchase or refi mortgage;
(520) 349-9090

 

Comment balloon 41 commentsMike Jones • July 25 2009 05:33AM

Comments

Hi Mike, what an informative post, chock full of great info! You give value everywhere you go. It's a pleasure to see you this morning.

Posted by Susie Blackmon, Ocala, Horses, Western Wear, Horse Farms, Marketing almost 9 years ago

Excellent.  This is part of the "stimulus" and I got three of my referral brokers, and me, and one of the lenders we use on the list of approved agents and lenders in Frederick County, MD.  There's real value in this program for succeeding home buyers. 

We've got one buyer under contract now.  The only risk here is that the property has to appraise for 1% over the contract price.  These are all bank owned properties in targeted zip codes. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 9 years ago

Lenn,

You're right on the money about the targeted zip codes.  Right now, every zip code in Arizona has a bulls-eye on it.  As the money is limited, and HUD's Neighborhood Stabilization Program, has specific guidelines, targeting may be restricted over time in order to comply with HUD goals for the money.

Susie,

I'm doing the Dennis Miller thing:  "ABC:  Always be closing if you want the knife set."

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Mike,

Do you know what the program is called Federally. Obviously there are simular programs in other states if Lenn has it and you mention "federal guide lines."

This is another program that harms all of us, by making the value of a responsible mortgage paying home seller's property worth less than the bank's REO! Such are the unintended consequences! But, for the eligible home buyer it's a great tool!

It's interesting that they require both the property to be a foreclosure and vacant, the Fed' doesn't allow banks to operate SFR (1 to 4 family homes) such rules could only come from a bureaucrat! Is the first an FHA program?

Bill

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) almost 9 years ago

Mike-Great post! and great time to buy forclosed properties.

Posted by Joseph D. Federico, Eastern Massachusetts Real Estate (Donahue Real Estate Co.) almost 9 years ago

Joseph,

Remember it's only for primary residences.

Bill,

Here's the link for HUD's NSP-1. (Neighborhood Stabilization Program Grants.)  The allocation of these funds for Texas is $101,996,848.  Allocation for Houston is $13,542,193.

Mike in Tucson

 
Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Thanks Mike!!!!!!!!!!!!!!!!!

Bill

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) almost 9 years ago

Bill,

Ya, you betcha!  :)

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Mike, Finally, something that makes since for home buyers. Fantastic. Can you share progress as these transactions go through the process? Kate

Posted by Kate Kate almost 9 years ago

Kate,

I'll do that!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Great post, Mike! That's a lot of information--I hope it brings you some excited home buyers.

Cheers,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) almost 9 years ago

Robin,

Thanks for commenting.  Be sure to click the link and see how much grant money has been allocated for Texas and San Antonio.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Mike, you are really special, and congratulations on landing on your feet, like all of us knew you would. I can only hope that we get someone like you in Oklahoma. We have some good ones, but they don't go the extra ten miles that you do.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) almost 9 years ago

Wow ! If the property is vacant,but wasn't a foreclosure,DOES IT QUALIFY ???

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) almost 9 years ago

Wow did I miss something or did Washington finally get wise to the word HELP. I will bookmark this and let's spread the word.

Posted by Charles Stallions, 800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl. (Charles Stallions Real Estate Services ) almost 9 years ago

Mike - Great post. We doon't have many HUD properties in my neck of the woods, but it's worth looking at again.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) almost 9 years ago

Mike, this is one of the best owner occupied programs for lender owned properties!  I can't imagine qualifying for 75% of the purchase price then in 5 years having 22% of the mortgage written off.  This is an outstanding program!

Posted by Sun City Grand Homes Surprise AZ Real Estate Leolinda Bowers Designated Broker Leolinda Realty, Sun City Grand in Surprise Arizona (Leolinda Realty) almost 9 years ago

This is wonderful info Mike! I've already contacted someone about it!

Thanks sooo much!

Posted by Joan Mirantz, Realtor, GRI, CBR, SRES - Concord New Hampshire (Homequest Real Estate) almost 9 years ago

Great info, Mike!  I have passed along a link to your post to some agents and lenders in other parts of the country.  If nothing else it may motivate them to double check on the available programs.  Thanks!

Posted by Carol Smith (Casmi Photography) almost 9 years ago

This is great information Mike.  See folks, the government can do some things right. :-)  Best of luck to you.

Posted by Jerry Murphy, CRS, SRES, Anthem, Phoenix, and Scottsdale AZ Real Estate (Long Realty West Valley) almost 9 years ago

Jerry,

If it stabilizes the market and puts money in your pocket, I'm for it.

Carol,

Thanks!!

Joan,

You're so very welcome!

Leolinda,

I'm glad to make you smile!  Thanks for reblogging.

Larry,

It doesn't have to be a HUD property.  It just has to be foreclosed.

Charles,

Good job!

Michael,

FORECLOSURES ONLY, it says in more than one place in my post.  (So the answer would be No.)

Joe,

What is it that Ziglar says?  "If you help enough people get what they want, you'll get what you want."  Thanks for the kind words.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Mike in Tucson - this is Banana from Phoenix. First of all - congrats - on your new company! And secondly this is a fantatic post.  Very detailed and informative.   Do you work up here?  If so , let's talk and get some stuff going. Timing is everything on these programs as the money will run out the closer we get to Nov 30 and first timers get in a rush to buy.

Thanks!

Anna Banana

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) almost 9 years ago

Good stuff, but I can't seem to find exactly what Connecticut's program is using the link you provided. and, we would all have to provide our own tables re: income eligibility limits by county. I'll reblog this when I have all of the info for my state together. Thanks!

Posted by William James Walton Sr., Greater Waterbury Real Estate (WEICHERT, REALTORS® - Briotti Group) almost 9 years ago

Interesting post Mike. I don't think we have anything like that in our area (yet). But it looks good for buyers.

Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) almost 9 years ago

PS--I second Anna Banana's post. Nice to see you found a new home quickly. Good luck there.

Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) almost 9 years ago

it is a great program for those who are in need and can use it.. I checked Alaska and it doesnt look like we have it here... the goodnews is state wide it said we were LOW Risk and only 2% in foreclosure! Across the whole state...

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) almost 9 years ago

This sounds like a great program.  Thank you for putting out this blog to make more people aware of it.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) almost 9 years ago

Great post and informative -- thanks for taking the time to put this together.

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) almost 9 years ago

Mike - LOVE THIS PROGRAM!  We have it here in Los Angeles county and while it's been challenging for my clients to get their offers accepted, this program has given them more options to choose from in affordable loan options.

Posted by Donne Knudsen, CalState Realty Services (Los Angeles & Ventura Counties in CA) almost 9 years ago

Donna,

It's good to hear a success story!  Thanks for commenting.

Carolin,

Thanks for commenting, and you're most welcome!

Christine,

It's my pleasure.  Thanks for stopping by.

Debra,

That's good news for Alaska!  Thanks for taking the time to comment.

Erica,

I'll check out what's available for your area and contact you by email if I find something.  Thanks for the well-wishes!

William,

Ditto my comment to Erica; I'll see what I can dig up.

Banana,

Yes, I do!  I'll contact you by email.  All the best.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Hi Mike - Wow...that was an interesting way of structuring NSP for Arizona buyers. We're still waiting to learn how Oregon is "re-interpreting" NSP guidelines for our eligible first time home buyers in Oregon who are interested in purchasing an eligible foreclosure home. Hopefully we'll be released again this week.

Posted by Karen Cooper, Helping Homeowners w/Home Loans in 27 US States (Karen Cooper | Sr Retail Loan Originator ! NMLS # 223305 | 360 Mortgage Group LLC Austin Texas) almost 9 years ago

Karen,

I'm finding out that many states have yet to set up a program to use the allocation of funds, and the thing expires in September of 2010!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Wow, this is great information Mike.  I'll be re-blogging this one!

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 9 years ago

Hi Mike,  Thanks for the call with the heads up on this.  So glad you have landed in such a great place!

Posted by Doreen McPherson, Phoenix Arizona Real Estate ~ (Homesmart ~ Scottsdale ~ Tempe) almost 9 years ago

Doreen,

Thanks!  I hope it brings you a buyer or two!

Gabe,

Thanks for reblogging; I'll be right over to see you.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

hmmm, I was coming to suggest you put links to the other two posts, but maybe I'll reblog, or not.  Do update and add links to part two and three...

Posted by Doreen McPherson, Phoenix Arizona Real Estate ~ (Homesmart ~ Scottsdale ~ Tempe) almost 9 years ago

Here's a question.  What are the minimum property standards?  FHA or different? 

Posted by Doreen McPherson, Phoenix Arizona Real Estate ~ (Homesmart ~ Scottsdale ~ Tempe) almost 9 years ago

Have any of you guys closed an escrow with this program in AZ? I have a REO listing and the buyer wants to purchase it using this loan. The appraisal needs to come in 1% over the sales price for the deal to go through. The seller is balking at the offer, understandably. How have you gotten contracts through, and have they successfully closed? I've heard bad things about FHA appraisals coming in low as it is, but needed to come is at 1% over sales price? I'm concerned. The only 2 agents I know who have worked deals with this program didn't have good outcomes.

Thanks!

Julie

Posted by Julie Heyer almost 9 years ago

Julie & Doreen,

If your buyer signs a purchase contract prior to being fully pre-approved, and prior to taking the required 8 hour Homebuyer Education Class, they will have a rough ride. 

The property guidelines are not verbatim FHA property guidelines; there are twelve pages of guidelines for the program.  Here's the url for the website where you can get all the good info: http://yourwayhomeaz.com/arizona.aspx

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

Mike, is this only on Az. or can you do these anywhere else. Sounds too good to be true but it would really help sell a lot of properties.

Posted by Charles Stallions, 800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl. (Charles Stallions Real Estate Services ) almost 9 years ago

Charles,

Florida has its share of money for this!  Click the link to see how much.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) almost 9 years ago

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