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The City of Atlanta NSP developers are REQUIRED to offer some benefit to any buyer purchasing an NSP house. This benefit can be in the form of down payment money, closing costs or even principle reduction (price decrease). NO PAYMENT OR INTEREST has to be paid on the NSP funds that benefit the homeowner. They are required to live in the home a certain amount of time before the entire amount of the benefit is forgiven. Below is the chart indicating the length of obligation based on the amount received.
|
Direct Subsidy Per NSP Unit * |
Minimum affordability period in years** | |
$0.00 to $14,999 |
5 | |
$15,000 to $40,000 |
10 | |
$40,001 to $90,000 |
15 | |
Over $90,000 |
20 |
* Subsidy is the amount of the "soft second" or Buyer Benefit
** Affordability Period is the length of time the homeowner must own and occupy the house or payback the unamortized amount of the "loan"
As you can see, the dollars available to qualified homebuyers can be significant. Exact benefits for a particular transaction vary based on the buyer and the house. See last weeks email update at Environs NSP Updates for more info on qualification.
THE HOMEBUYER CAN SELL THE HOUSE DURING THE AFFORDABILITY PERIOD
For example, a homebuyer purchases an NSP house for $200,000 and NSP allows a total of $25,000 in benefit as follows: principle reduction ($16,000), down payment ($5000) and closing costs ($4000). They get transferred 6 years after purchase and sell the house. At closing, the maximum due back to NSP is $10,000 (2/5 of the $25,000). THERE IS NO CAP ON THE RESELL PRICE and options do exist to request forgiveness of the NSP benefit which is due back to the program, depending on the particular circumstances. The Affordability Period is to prevent investors from purchasing these discounted homes, reselling immediately, and pocketing the profits. It is NOT to discourage homeowners from moving or transferring jobs, a fact of life that is normal for all of us.
The bottom line is that very little money is due at closing, the mortgage (in this example) is based on a loan $16,000 less that it would have been without NSP and the home quality is superior to many others in the marketplace due to program rules.
NEXT WEEK-HOW TO STRUCTURE AN NSP OFFER
As always, please let us know if you have any questions regarding the fantastic buyer incentives available with NSP funds.
or call (404) 810-0025 today! |
