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NSP Lender Overview

What is the Volusia County NSP Home Purchase Program?

• The Volusia County NSP Home Purchase Program is designed to help qualified, creditworthy persons purchase a County-owned NSP home that has been repaired/renovated.
• Is financial assistance available to help the potential homebuyer purchase an NSP Home?
  Yes. Purchase assistance for gap financing, down payment assistance and closing cost assistance based on their income and need is included. Click here to see the amounts.
• How would the potential homebuyer receive this assistance?
  The assistance is provided as a deferred payment loan with a term of 15 years at 0% interest. The buyer will sign a Note and Mortgage for the amount of the assistance provided. The Mortgage will be recorded as a lien against their property.
• Will the buyer have to repay this assistance?
  The buyer would have to pay back the amount of the loan if they stop living in the house because they sell or rent the home, or otherwise stop living in the house, before the end of the 15 years. Also, if they sell or rent the home in the first 10 years they will have to pay back a portion of any profit they receive, in addition to the full amount of the assistance.

Where are the NSP Homes located?

• Volusia County’s NSP Homes are currently located in neighborhoods in the following areas:
  • Westside: DeBary, DeLand, Orange City
  • Eastside: Edgewater, Holly Hill, New Smyrna Beach, Ormond Beach
• The City of Deltona has a separate NSP program. Please contact them at 386-878-8614 for more information.
• The NSP Homes are listed for sale with the County’s selected listing brokers based on whether the homes are located on the eastside or westside of Volusia County.
• Click here for the listing brokers’ information.
• Click here for a list of available NSP Homes.

Who can buy an NSP Home?

• Who is eligible for the NSP Home Purchase Program?
  Households can apply for approval to purchase an NSP home if they meet ALL the following guidelines:
  • Are a first-time homebuyer (have not owned a home within the past three years)
  • Have not had a foreclosure sale in the past seven years
  • Meet NSP income limits - Click here
  • Qualify for a first mortgage loan with a lender that meets NSP mortgage guidelines
  • Are able to contribute up to $1,500 towards the home purchase (Their lender may require additional funds).
  • Agree to occupy the home as their primary residence for 15 years
• Can a private investor purchase an NSP Home?
  No, the NPS Homes are not available for sale to private investors.
• Can a cash buyer purchase an NSP Home?
  No, the NSP Homes are intended to be sold to households that need a first mortgage and purchase assistance in order to buy the NSP Home. In general, verifiable cash and other assets (combined with gifts from family members, if applicable) should not exceed 15% of the purchase price. Tax deferred accounts may be excluded from the asset limitations.

What requirements does the NSP Home Purchase Program place on the first mortgage?
The first mortgage lender is required to certify to Volusia County that the first mortgage loan complies with the following requirements:

• Maximum affordable loan: The primary loan is for the maximum affordable amount for which the applicant is eligible for under their present underwriting guidelines.
• No sub-prime loans: The loan must conform with bank regulators’ guidance for non-traditional mortgages.
• Fixed-rate loan: The loan must be a fixed rate.
• No-prepayment penalty: The loan must not have a pre-payment penalty.
• Affordability: The applicant’s proposed monthly housing debt service (PITI) must not exceed 30% of the area median income (adjusted for family size).
• Front-end and back-end ratios: The current approved front-end and back-end ratios are provided below. Exceptions to these ratios may be approved by Volusia County.

• Escrows: Property tax, hazard insurance and any other assessment must be collected on a monthly basis, and held in escrow for payment by the first mortgagor.

What are the features of Volusia County’s subordinate loan?

• Volusia County’s funds will be provided as a subordinate loan with a 15-year term with 0% interest. The loan is deferred and forgiven, if occupancy conditions are met. Sample Mortgage and Note.
• The subordinate loan cannot exceed the first mortgage or be more than 50% of the purchase price. The loan can be in a third position in limited circumstances.
• The maximum assistance amounts are as follows:

Shared Appreciation feature:

• The County of Volusia will share in a portion of the net appreciation if the home is transferred within 10 years of purchase.
• The percentage of net appreciation to be shared between Volusia County and homebuyer is provided below:

What is the process to buy an NSP Home?

• How does a potential homebuyer buy an NSP Home?
  A contract to purchase an NSP Home will only be accepted from an Approved NSP Buyer.
• How does the potential homebuyer become an Approved NSP Buyer?
  The potential homebuyer must contact an approved NSP Affordable Housing Partner to find out if they meet the requirements, and submit the required information to Volusia County Community Assistance. The Approved NSP Buyer letter is issued by Volusia County Community Assistance following their review of the submitted application.

What is an NSP Affordable Housing Partner?

• Who are the Affordable Housing Partners (AHP)? The AHP is a group of housing counseling agencies, lenders and real estate agents that were trained by Volusia County Community Assistance about the NSP Home Purchase Program, and that are interested and have experience helping first time homebuyers purchase a safe, decent and affordable house.
• What is the role of the NSP Affordable Housing Partner?
  An Affordable Housing Partner is responsible to:
  • Help the potential homebuyer fill out the Volusia County NSP Home Purchase Program Application, and gather required documentation
  • Determine if the potential homebuyer meets NSP income limits, including obtaining third-party verifications
  • Help ensure the homebuyer is qualified to get a mortgage
  • Schedule the required homeownership counseling class (The buyer must have 8 hours of homebuyer education classes, or have a valid certificate from a Volusia County approved HUD certified counseling agency, before they will be determined to be an Approved NSP Buyer)
  • Submit the COMPLETE file to Volusia County for review and approval

How will the Approved NSP Buyer know how much assistance they will receive to help make the home more affordable?

• The Approved NSP Buyer is required to get a first mortgage in the maximum amount that is affordable for them. The Approved NSP Buyer may not qualify for the maximum amount of purchase assistance.
• After the lender has issued the financing commitment, Volusia County Community Assistance will send a commitment letter to the Approved NSP Buyer that states the amount of assistance that will be provided.
• The amount of closing cost assistance is set according to the Approved NSP Buyer’s income level.

How long will this process take?

• We estimate that the application and qualification process takes from two-four months, because verification from third parties of all sources of income and assets is required, and the homeownership counseling course must be taken.

IMPORTANT CONSIDERATIONS

• Volusia County will not accept purchase offers unless the potential buyer is an NSP Approved Buyer.
• Interested persons are encouraged to apply early to become an NSP Approved Buyer.
• The NSP homes are sold on a first ready basis.

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