SR 303

NEIGHBORHOOD STABILIZATION PROGRAM 3 (NSP 3)Realtor Training

1Realtor TrainingNSP3 Realtor Training

2NSP3 Realtor Training

Program Purpose Stabilize NeighborhoodsProvide homebuyer assistance towards the purchase of foreclosed homes to qualified applicantsRedevelop substandard propertiesProvide homebuyer education

BeforeAfter

-eliminate vacant homes in Surprise that eventually contribute to blight in the neighborhood-Homebuyer assistance in the form of Down payment and closing cost assistance-Rehab is done to homes purchased within the City of Surprise Inventory-8 hour homebuyer education course conducted by our Housing Agency

3NSP 3 Target AreaGeneral Boundaries and InclusionsBell RoadPeoria AvenuePerryville RoadDysart RoadOriginal Townsite (OTS)Kingswood Parke HOANSP3 Realtor Training

-All homes purchased must be within this Target Area. This target area has been identified to have a high foreclosure rate in Surprise.4NSP3 Realtor Training

Buyer RequirementsIncome Eligibility At or below 120% Area median income Education and CounselingMust receive one-on-one counselingMust complete HUD approved 8-hour homebuyer education course through NHSPHXPrimary ResidenceProperty must serve as the applicants primary residenceNO INVESTORS

-included in the packet is a HUD income Limits form which includes the Area Median Incomes for this program. For example: A family of 4 making $75,750 per year will be at 120% AMI and will still be qualified for the program.

-property cannot be used as a summer house, winter house or rental5NSP3 Realtor Training

Buyer Requirements ContBuyer ContributionMust contribute a minimum of 1,000 or 1.75% of purchase price, whichever is higher, from their own fundsBorrower funds may be used for down payment, pre-paids, or closing costsClient responsible for any earnest deposit required (to be applied to minimum contributions)

-For example if your client purchases a house for $100,000, down payment will be $1,000, but if the purchase price was higher at $175,000 the down payment will now be $3,062.506NSP3 Realtor Training

Assistance Types Down Payment AssistanceProvided as a soft second loan with recapture provisionMinimum assistance of $5,000 for households between 51% and 120% AMIBuyers with annual income at or below 50% AMI will receive an amount based on a needs assessment calculationAssistance level is based on qualification calculation vs. desireClosing Cost AssistanceProvided as a grant, up to 6% of the purchase price towards normal and customary closing costs includes a 1-year home warranty

-recapture provision states that if they move out of the home within 5 years they have to pay back the full $5,000-closing cost grant does not have a recapture provision.7NSP3 Realtor Training

1st Mortgage RequirementsMortgages must be 30 year fixed-rate loans at prevailing interest rates

Debt ratios may not exceed 33% for housing expenses (PITI+HOA+PMI) and 45% for total debt

Purchase price may not exceed $263,150

Maximum CLTV to be determined by lender

-PITI Principle and Interest /Taxes and Interest-CLTV Combined Loan to Value8NSP3 Realtor Training

Eligible PropertiesProperty must be located in Program Target Area (No pools)Single-Family that is Foreclosed, bank-owned and VACANTPurchase price must be discounted a minimum of 1% of current appraised valuePURCHASE CONTRACT MUST INCLUDE LANGUAGE REQUIRING THE 1% DISCOUNT AND CLOSING CONTINGENT UPON A CLEAR HUD ENVIRONMENTAL REVIEW Buyer will not be eligible for assistance if language not included in purchase contractProperty must pass required HUD Environmental Review to be completed within 10 days of borrower initiating a purchase contract

-No wood burning fireplaces-HUD environmental reviews will check to see if the house is located close to railroad tracks, airport fly zones, and toxic facilities or dumps.9NSP3 Realtor Training City of Surprise InventoryRealtors receive 2% commission on homes in City of Surprise InventoryNo down payment assistance offered to clients who purchase from City of Surprise inventory.Up to 6% closing costs grant still available.Purchase price will be either cost of home plus repairs or appraised value whichever is lowest.Principle Loan reductions available. Amount is dependent on need as calculated by Neighborhood Services Division.

-we can give a discount to the purchase price to qualified buyers10NSP3 Realtor Training

Key FactorsBuyer cannot currently own a home program not designed to bridge financing to purchase a new home while waiting to sell current homeNo Short SalesNo InvestorsProperty must be able to pass an FHA Appraisal inspection for funding. The program will not make improvements (rehab) to the property.

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Role of City of SurpriseReceive initial program inquiries from homebuyers

Pre-application intake to prescreen applicants for eligibility

Refer homebuyers to NHSPHX to obtain Homebuyer Counseling and Education

Provide Program Eligibility Letter

Issue down payment and closing cost assistance

-A homebuyer down payment assistance application is included in the folders.12NSP3 Realtor Training

Role of NHSPHXReceive client referral from City of SurpriseReceive initial program inquiries from homebuyersApplication IntakeDetermine applicant eligibilityProvide one-on-one counselingProvide homebuyer educationRefer qualified applicants to City of Surprise

-applicant eligibility and one on one counseling includes assistance with a credit check and lender referral-buyers will participate in an 8 hour homebuyer education course through NHSPHX13NSP3 Realtor Training

Steps to Receiving AssistanceHomebuyer contacts either the City of Surprise or NHSPHXHomebuyer schedules orientation with NHSPHXHomebuyer schedules one-on-one counseling appointment with NHSPHXCounselor will (a) determine eligibility; (b) determine mortgage readiness; and (c) schedule homebuyer education classCAUTION: Do Not put an offer on a property until homebuyer has received a Program Eligibility Letter from the City of SurpriseThe average timeframe from pre-application to eligibility letter is 2 to 4 months.

-City of Surprise inventory cannot be shown to applicants who have not been approved by NHSPHX and have not received an approval letter by Surprise. -This is not a fast track program however we have seen approvals completed within a month it is case by case.14NSP3 Realtor Training

Steps to Receiving Assistance ContLender will send counselor 1st mortgage credit package if availableIf homebuyer is mortgage ready AND approved for a 1st mortgage loan, then the Program Eligibility Letter will be issued by the City of Surprise. The homebuyer will have 60 days to make a purchase offer on an eligible property. Funds will be reserved during this time.Once purchase offer is accepted, the City will receive a copy of the executed purchase contract from buyers realtor. The City will complete the environmental review.

-must pass the environmental review in order for purchase to proceed15NSP3 Realtor Training

Steps to Receiving Assistance ContLender sends the City of Surprise complete loan package and final loan approval package which includes all property documents.The City verifies the final loan approval package meets program guidelines and originates the 2nd lien documents for the down payment assistance. Once processed these documents are forwarded to the title company for closing.Once assistance is approved and documents processed the City will remit assistance funds directly to the title company at closing.

-Lien documents require three signatures, City Manager, City Attorney and City Clerks. 16NSP3 Realtor Training

Contact InformationCity of SurpriseChristina Ramirez, Neighborhood Services SupervisorE-mail: christina.ramirez@surpriseaz.gov Phone: 623-222-3238

Neighborhood Services CoordinatorE-mail: jason.hughes@surpriseaz.gov Phone: 623-222-3239

Vacant, Neighborhood Services AssistantE-mail:Phone: 623-222-3241

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Contact InformationNeighborhood Housing Services of Phoenix

Chris Smith, Homeownership Center ManagerAris Perez, Senior Homeownership CounselorPhone: 623-932-3503aperez@nhsphoenix.org

Use this slide if you just have a subtitle and some text. You can place an image. This should be in the 3 slides in the same place. Note: no more than 4 bullet points per slide. 18NSP3 Realtor TrainingFAQWhos included in the household size? Everyone living in home; if claimed on taxes, they are included.Who pays the earnest deposit? The homebuyer is responsible for paying earnest deposit no matter the cost, but will receive a refund at the end/applied towards down payment. Caution: HUD wont return earnest money.Whats included in closing cost assistance? COS pays up to 6% of normal and customary closing costs; does not include buying down interest rate.Does the property have to be a HUD home? NSP applies to any bank-owned and/or HUD home.

NSP3 Realtor TrainingFAQCan the homebuyer offer more than the purchase price, then pay COS the difference? NoCan the homebuyer use gift money? Gift money may be used in addition to the $1,000 or 1.75% from own funds.Why cant the property have a pool? We cant guarantee any issues such as fencing, repairs or maintenance costs.Why cant the property have a wood burning fireplace? City policy excludes fireplaces for energy efficiency reasons.How do clients know I am a certified realtor? The City of Surprise has a list of realtors who have completed the NSP training class which is provided to all clients.Can I show homes to clients who have not completed the NSP program? No, lockbox codes will only provided to realtors with clients who have received an approval letter.

NSP3 Realtor TrainingFAQDoes the City of Surprise have a required list of lenders? No, but lenders can be found on HUD.GOV.Are homes in the City of Surprise inventory listed on MLS? No, they are not advertised. Can the one on one counseling be conducted over the phone? No, the one on one counseling must be conducted in person.Can the monies be used to buy down interest rates? NoDoes the City of Surprise pay for appraisals/inspections and warranty? Yes, the City of Surprise will pay for all, but will need to schedule them except for the warranty which is paid at closing and ordered by the homeowner.

NSP3 Realtor TrainingQuestions or Comments?

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