creative financing techniques, Fannie Mae, financing assistance programs, home owner assistance programs, how to get started in real estate investing, HUD funding assistance for investors, investing in real estate with no money down, neighborhood stabilization program, nsp grants
Creative Financing — A Way Around No money Down
Can you become a real estate investor with no money out of your pocket? There is no reason why you couldn’t. You just need to know where to look for the money. In my post, Getting Around Money Down, I discussed a creative financing technique to help get you started. Today, I will introduce NSP funding, a financing assistance program offered by HUD.
The NSP (Neighborhood Stabilization Program) offers grants to investors for activities related to the purchase and improvement of vacant or foreclosed properties, especially in low income communities. In addition to providing funding assistance, there are several other benefits for real estate investors who participate in this program. The Fannie Mae Home Path website cites the following benefits.
- Earnest money requirement for individuals using public funds is only $500. Fannie Mae waives the earnest money requirement for public entities using public funds to purchase a Fannie Mae- owned property.
- Once an offer using NSP funds is accepted, buyers have the opportunity to renegotiate after receiving an NSP required Uniform Residential Appraisal value for the property.
- The standard closing period for a public funds offer is 45 days, which allows time to fulfill the NSP requirements for funding.
- Buyers using public funds to purchase a home can do so without competition from investors during the First Look marketing period (typically the first 15 days on the market).
How can NSP funds be used?
Defining your target areas to invest in should be the first step in this process. If your plans are to wholesale or rent properties in distressed communities, then this program can be of assistance to you. Qualified investors who purchase in high foreclosure areas can receive up to five NSP grants. NSP grantees have the option to sell, rent or demolish their purchased properties. Many investors use their funding assistance for low income rentals while others use it towards down payments or rehab.
Investors who purchase a Fannie Mae Home Path property and combine it with a NSP (Neighborhood Stabilization Program) grant can become a property owner with little or no money out of their pocket. Furthermore, qualified investors who purchase in a high foreclosure areas can receive up to five NSP grants. NSP grants can be used as down payments or for the rehab of properties that will be sold or rented to lower income tenants.
For more information on the NSP funding assistance program visit HomePath.com, and proceed to the offers and incentives tab.