Neighborhood Finance Corporation $10,000 grant plus $2,500 closing credit is the best thing going in Des Moines

By
Real Estate Agent with RE/MAX Real Estate Concepts
http://actvra.in/4fgW

It's official. The tax credit is totally off the table. The senate decided in a vote last week not to even extend it for those who had homes under contract and can't get them closed by the 30th of this month, the final deadline. That to me officially says the tax credit is not coming back. End of story.

However.....if you're an owner occupant buying a home in certain parts of Des Moines, you may be eligible for up to a $10,000 grant, plus a $2,500 closing cost allowance from the Neighborhood Finance Corporation, or the NFC, as it is popularly known. The NFC is a non-profit organization that is funded by the state and only operates in the Des Moinesarea. NFC acts as the lender and holds the loans, so applicants apply directly to, and work directly with the NFC. That's up to $12,500 free money eligible to owner occupants for homes that qualify.

The program is not available for all areas of Des Moines, more affluent areas are generally excluded, but lending zones cover a pretty good swath of the city. SEE MAP

The way the program works is that NFC loans on homes that might need repairs in the form of roofs, gutters, plumbing, electrical, siding, windows, mechanicals, foundations, paving, garages, energy efficiency and other structural repairs. NFC will only loan on homes that are eligible for repairs. A grant of up to $10,000 is allowed to cover qualified repairs. Buyers get estimated from licensed contractors and submit a repair plan to the NFC for approval. If the repairs are approved, the property goes to closing and the grant is awarded as a 3rd mortgage. As work is performed and confirmed completed, NFC goes ahead and disperses fund directly to the service providers. NFC closes the loans at its office and covers buyer closing fees up to $2,500. The closing credit is a straight credit that does not need to be repaid. Closing fees are low because NFC is not in the business of making money of loans, they are in the business of promoting home ownership and proctoring the refurbishing of dilapidated properties in Des Moines.

NFC can be a good option for owner occupant buyers interested in foreclosures because it has far fewer stipulations than an FHA or VA underwritten loan which many REO managers and lenders will not allow.

The grant is forgivable over five years at 20% per year. NFC will mail out an affidavit that the home owner will need to sign that verifies they are living in the property. When the affidavit is returned, NFC will take 20% off of the grant total. After five years of occupying the home the grant is completely forgiven. If the homeowner vacates or sells thr property before the end of the five years, they would need to repay the remaining portion of the grant, not the whole grant mind you, just the prorated portion.

Some major points of the program:

  • Only available for owner occupants
  • Cosigners must occupy the property
  • There is no PMI, loans are 80/15
  • Five percent down payment is required
  • Grants do not need to be repaid if the purchaser lives in the home 5 years
  • The current interest rate is 4.875%
  • NFC lends the money and holds the loan
  • Duplex or multi-family conversions back to single family may be eligible for $20,000 grants
  • Cannot be used on homes that have been awarded grants in years prior
  • Generally requires a 600 minimum credit score

This is a fantastic program this has been available for many years and that is not going away anytime soon. If you are purchasing a home in the Des Moines area and you qualify, you owe it to yourself to determine if the property you're planning to purchase is NFC eligible. You can find NFC on the web at http://www.neighborhoodfinance.org, or you may reach them by phone at 515- 288-5626.

 

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Contact Matt Grohe Realtor® RE/MAX Real Estate Concepts - 3125 Douglas Ave #205 Douglas Ave. Des Moines, IA , or call 515-988-3726 to list your property for sale or to purchase a property in Des Moines, West Des Moines, Windsor Heights, Clive, Johnston, Urbandale, Ankeny, Waukee, Norwalk, Carlisle or surrounding areas.

Online at: http://www.MyIowaHome.com

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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Matt,

i thhought about it. You got a fantastic program there, but I will keep my mouth shut and will not tell my clients about it. I do not want to leave Flrorida. Sorry ;-)

But I am sure may would envy you

Jun 28, 2010 11:51 PM #1
Rainmaker
644,437
Adam Malachi
RLO Millennium Real Estate and Mortgage. - Castle Rock, CO
QSC,CDPE,CIPS,CNE,CRB,CRS,GRI,MRE,SFR

Hello Matt ~

Excellent post! Wow what a great program! I wish all the luck my friend sell lots of homes!

Thanks for sharing,

Adam

Jul 02, 2010 10:39 PM #2
Rainmaker
238,989
Matt Grohe
RE/MAX Real Estate Concepts - Des Moines, IA
RE/MAX Des Moines

Adam and John: You are right about the awesome program. The most surprising thing about it is that in probably 95-10% of cases buyers who get bank financing could get NFC, but probably only about 10-20% go with NFC. Can't figure it out.

Jul 04, 2010 01:10 AM #3
Rainmaker
598,882
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Matt - Sounds like a good program for local Des Moine buyers.  It is so important to get this info out to those that qualify.  I see the same thing here in my market in Los Angeles and Ventura counties.  Programs that so many buyers could qualify for but don't know about because the bank rep that they're using isn't familiar with these types of programs.

Jul 11, 2010 05:36 PM #4
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Rainmaker
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Matt Grohe

RE/MAX Des Moines
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