There is a new program that many people have started calling the 1% down payment program. While it is true that if you qualify for the program, you can get an FHA loan with putting only 1% down, there is much more to the program than that.

The new program is called the Neighborhood Stabilization Program and here are just a few details about the program:

Neighborhood Stabilization Program Highlights:

• If you own a residence, you must be leasing your primary residence at least 12 months before applying for the program.
• You must use us a lender from the ADOH participating lender list.
• You must attend and complete an eight‐hour Homebuyer Education Class provided by one of the ADOH participating homebuyer counseling agencies. (A list will be provided by your lender once you begin the process.)
• The property you purchase must be your primary residence.
• You must have a maximum debt‐to‐income ratio of 31/43.
• You must be AUS approved eligible.
• You must have two months PITI reserves.
• You can use any type of financing with the NSP program – including paying cash. That means you can still get up to 22% of the purchase price even if you pay cash for the house.
• You must be approved and have your paperwork completed for the program prior to submitting an offer on a house.

Neighborhood Stabilization Eligible Property Types:

• Foreclosed properties only. A property is considered “foreclosed upon” at the point that the mortgage or tax foreclosure is complete.
• One‐unit detached single family homes, condos and townhomes.
• The property must be vacant at time of listing.

Neighborhood Stabilization Program Purchase Price Limits:

Neighborhood Stabilization Program Income Limits:

In order to qualify for the program, you must have a gross income (the total income before taxes, health care costs, social security, etc.) of no more than 120 percent of the average median income for the county they want to purchase a foreclosed house in.

Income Limits For Maricopa County:

Maricopa County Income Limits

Neighborhood Stabilization Program: 1% Down Payment?

A minimum of 3 percent of the property purchase price is required as down payment. One percent must come from the borrower’s own funds. Two percent can come from any other approved source.

Neighborhood Stabilization Program: FREE Money?

1. Up to 22 percent of purchase price
2. 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‐$40,000
   * 15 years for assistance of more than $40,000
3. All loans are zero percent interest with no monthly payment.
4. The balance of the loan is forgiven at the completion of the term.

An Overview On The Neighborhood Stabilization Program

This program is very “real” and is generating a lot of excitement. The real bottom line is basically that if you are buying a foreclosed property and meet the guidelines – AND – plan on living in the home, then this program is easy to take advantage of.

So if you think that you are excited about the 8000 tax credit, you are going to love the Neighborhood Stabilization Program – it can mean even more money to your bottom line!