Our neighboring State of Indiana has taken a novel approach with the same NSP monies. Encourage people to come in and buy those homes, fix them up and live in them. Indianapolis has offered additional incentive and the net result is monies are those same monies are being spent to encourage home ownership while retaining the historic housing stock.
The program works like this:
IHCDA will offer up to $15,000 (not to exceed 20% of purchase price) to assist home buyers with the acquisition and/or rehabilitation of a foreclosed residential property located within an area of greatest need.
These funds may be used in conjunction with the IHCDA First Home product, FHA, VA, USDA, or prime fixed rate product. No adjustable rate or subprime mortgage products will be allowed for the purchase of these homes.
Home buyers may use these funds for closing costs and down payment assistance related to the purchase of a foreclosed home or residential property that will be used as the primary residence.
To be eligible for rehab funds a residential structure must not meet local building code and therefore is unable to be purchased in its present condition.
Buyers may use both acquisition and rehabilitation assistance in the purchase of a home, but the combined assistance may not exceed $15,000.
These funds will be in the form of a zero-interest, non-amortizing, second mortgage loan. These funds do not have to be repaid as long as home buyers use the home as a principal residence for at least ten years. If the home buyer sells the home within the first five years, the subsidy is repayable to IHCDA on a shared net proceeds basis. If the home buyer refinances within the first five years, the entire subsidy is repayable to IHCDA. After year 5 and through year 10, the home buyer will retain 20% in equity of the award amount per year.
This funding will be available to home buyers that are at or below 120% of area median income and who intend to occupy the home themselves.
Home buyers will be required to participate in 8 hours of pre-purchase education provided by an IHCDA certified counselor.
IHCDA will be coordinating with lenders/servicers, Fannie Mae, Freddie Mac and HUD to list foreclosed properties on a centralized Web site. Visit http://www.indianahousingnow.org/ and click on the Market Stabilization Program link to determine if a foreclosed property is in an eligible neighborhood. Lenders will be required to sell the properties listed on the site at a discount that meets or exceeds NSP guidelines.
An additional incentive is being offered in Indianapolis:
Federal Home Loan Bank of Indianapolis's Program:
The Federal Home Loan Bank of Indianapolis’s (FHLBI) Neighborhood Stabilization Assistance (NSA) program is offering matching grants of up to $10,000. The main qualification for the NSA program is that the home buyer must have already secured IHCDA funds. Once IHCDA funding is secured, proceed by contacting an FHLBI member financial institution
In short Cincinnati has the wrong approach and we need to encourage this type of program in Ohio.