Buying a NSP home from a private seller
Beginning in 2009, Anoka County purchased foreclosed homes for the improvement of neighborhoods through the Neighborhood Stabilization Program (NSP). Homes that were purchased were either remodeled, or demolished, and the homes and lots were sold to private buyers. Buyers of the NSP properties had to fulfill the following requirements:
- Complete a federal program eligibility requirement.
- 20 year affordability Declaration of Covenants and Restrictions were placed on the home to meet federal funding guidelines.
- If they chose to receive assistance they would have secured a Purchase Money Mortgage for a specific term.
As a potential buyer of one of these properties it is important not only to understand the documents assigned to the home, but what is required for you to complete to purchase the home.
Federal Program Eligibility: NSP properties that received federal funding have long-term requirements in place for all buyers during the period of the declaration. This requires that all buyers of the property must income qualify based on current federal income limits. Income limits adjust annually and the most current limits will apply.
- Anoka County requires a completed application including all required documents (pg.4 application). Original signed applications and supporting documentation should be submitted directly to Anoka County. Incomplete applications will not be processed.
- Anoka County will maintain all information in confidentiality. Property sellers, Realtors and lenders are not entitled to buyer information without your consent.
- Once an application is reviewed a general letter stating only that you are eligible or not will be sent to you and the seller. A seller cannot and should not sign a purchase agreement without receiving this letter.
- Information is only valid for 6 months from the date of the documentation. If a purchase is delayed longer than 6 months new supporting documentation would be required to maintain the eligibility to purchase this home.
- Buyers of NSP properties are required to take a Home Buyer education course through a HUD approved agency. This needs to be completed before the date of closing.
20 year Declaration of Covenants and Restrictions: Federal funding required that a minimum amount of years were set upon the property to remain affordable to households in low, moderate and middle income levels.
- The Declaration will identify if the property must meet income levels at 120%, 80% or 50% incomes. Income levels adjust annually and eligibility is based on the application previously discussed.
- If the property is sold to you, and you have not income qualified the County can, and is required to by the federal program, enforce the rights of the declaration. That could mean foreclosing on the property.
- The 20 years began on the first date of the declaration and does not renew at the time of your purchase. For instance, if the declaration was placed on the property in 2010 it will expire in 2030 no matter if you are buying in 2015 or 2029.
- The income requirements must be met during any time within the Declaration deadline. Closing on a property even one day before its expiration does not eliminate the requirements of the federal program.
Purchase Money Mortgage: If an original buyer received funds for closing cost assistance and it is within the term of that agreement they will be required to repay funds to the county at closing. This does not, and should not, affect your transaction and is an agreement directly between the original buyer and the County. Anoka County does not offer NSP closing costs, or down payment assistance, to ongoing buyers as the program has grant terms that expire.