A Q&A for realtors about NSP
Q. What is NSP?
A. The Neighborhood Stabilization Program (NSP) was created to address the housing crisis, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate vacant homes. The NSP grants HUD has awarded are helping state and local governments, as well as non-profit developers, acquire land and property; demolish or rehabilitate abandoned properties; and/or offer down payment and closing cost assistance to low- to middle-income home buyers
Q. What are Chicago’s goals for NSP?
A. To stabilize targeted neighborhoods by getting vacant, foreclosed homes up to code and occupied as quickly as possible.
Q. How can I apply for NSP?
A. Mercy Portfolio Services will periodically issue an RFP for Realtors on the www.chicagonsp.org website. When this call for service is issued during an open application time period please respond by submitting an application. As a buyer’s agent you do not need to submit an application to represent your client.
Q. How can I qualify clients for this program?
A. The www.chicagonsp.org website features a tab dedicated to the NSP home purchaser and renter. Follow the link to the 5 steps to purchasing an NSP home, where you will find lender and housing counseling agencies, as well as forms and information about available NSP properties.
Q. Who can buy a house through NSP?
A. Several factors contribute to one’s ability to purchase an NSP home. The most important is that the buyer’s income be at or below 120% AMI and that they occupy the home as their primary residence. See the NSP homebuyer guidelines on the www.chicagonsp.org website for detailed guidelines.
Q. Can my client buy a house through NSP and then flip it?
A. In the traditional sense of the word, no. The purchaser must occupy the home as their primary residence and a 15-year affordability period runs with the property. Please see NSP homebuyer guidelines for further details.
Q. What will my clients learn in the required housing counseling class for NSP homeowners?
A. HUD certified housing counseling agencies provide homebuyers with the necessary tools to become educated homebuyers from credit repair to pre-approval and understanding the loan, what to look for in a home inspection, to long term home maintenance after the closing.
Q. How long will it take from the time my clients sign up until the time they can close on an NSP house?
A. This depends on several factors. The most important is your client’s ability to provide MPS the information and documentation needed to complete the income verification process, verifying that your client household is at or below 120%. This can take up to 3-4 weeks.
Q. What amount of paperwork must a buyer complete to buy a home through NSP?
A. All purchasers of NSP homes should first complete an NSP registration and, prior to contract presentation, an NSP application. Once a contract has been accepted, either Mercy Portfolio Services or the listing agent will provide you and the buyer’s attorney the necessary documentation and checklist for income verification.
Q. What things should my clients and I take note of when touring an NSP property?
A. An NSP home is more than just a rehab. The houses have been renewed to and above HUD construction guidelines. Note the energy efficiency of windows, heating and cooling, and insulation. These items will create long term affordability.
Q. What if my clients don’t want a home in Chicago? Does NSP operate in other parts of the region as well?
A. To participate in Chicago NSP your buyer must purchase a home within the Chicago NSP boundaries. Yes, there are other NSP programs throughout the state. Learn more about that program from the U.S. Department of Housing and Urban Development.
Q. What advice about this NSP opportunity should I give to potential homebuyers?
A. Purchasing an NSP home in today’s market is a once-in-a-lifetime opportunity for the individual or family looking to create long term affordability. The City of Chicago and its partners as well as private stakeholders have invested millions of dollars in improvements in these homes and the surrounding communities. NSP homes are sold at market value, unlike most rehabbed homes where the cost of construction is transferred to the homebuyer. This will create greater opportunity for future financial security.
Q. Can my client offer more than list price to increase their chances of their offer being accepted?
A. No. NSP properties are sold for list price very similar to new construction condominiums. Federal regulations require NSP properties be sold at or less than appraised value.
Q. How much does my client need out of pocket to purchase an NSP home?
A. A qualified NSP buyer may purchase an NSP home for as little as $1000 or 1% of the purchase price (whichever is greater).
Q. If I’ve read through everything and still have questions, who should I call?
A. Cardigan Shipman is the home buyer facilitator at Mercy Portfolio Services. He can be reached at email@example.com or 312-428-4120.