Neighborhood Incentive Program (NIP)

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					City of Durham
Department of Community Development




    Neighborhood
      Incentive
    Program (NIP)



                                2010
Revised July 2010
        Neighborhood Incentive Program
                    (NIP)
To encourage investment in targeted neighborhoods, the City of Durham created a
Neighborhood Incentive Program (NIP) Program. This program is intended to
complement the City’s efforts to revitalize its inner City neighborhoods not only by
providing a financial incentive, but also by eliminating a major obstacle to the purchase
of older homes. HUD regulations require that when their funds are used for the
purchase of a home built prior to 1978, the home must be tested for lead based paint
and any hazards abated. Because abating lead hazards seldom results in an equal
increment in the home’s value compared to the abatement costs, the NIP program
incorporates a limited grant for lead abatement.

      Under the NIP program, income eligible households will be able to purchase a
      home built before 1978 located in a central city neighborhood and receive a
      second mortgage loan of up to $30,000 and a grant for lead hazard abatement of
      up to $16,000. All required lead hazard abatement will be supervised by the
      Department’s lead specialists.

      If the home is located in a central city neighborhood and was built after 1978, the
      amount of the second mortgage loan will be up to $25,000.

      Specific elements of the program are as follows:
   1. Total household income cannot exceed 80% of median income for Raleigh-
      Durham area ($57,050 for a family of four).
   2. Minimum down payment required is $500.
   3. A loan term of 30 years and an interest rate of 2%.
   4. Maximum City second mortgage loan amount of $30,000 or 30% of the purchase
      (whichever is less) if the property is located in a central city neighborhood and
      built prior to 1978; Purchasers are eligible to receive a grant of up to $16,000 to
      abate lead hazards in home built prior to 1978.
   5. Maximum City second mortgage loan amount of $25,000 or 25% of the purchase
      (whichever is less) if the property is located in a central city neighborhood and
      built after 1978
   6. Maximum loan amount cannot exceed 95% of FHA Loan Limit
      https://entp.hud.gov/idapp/html/hicostlook.cfm
   7. Loan term: 30 years, non-deferred
   8. Qualifying Ratios: 35 and 43
   9. Total household gross income cannot exceed 80% of the median                 family
      income for the Raleigh-Durham, Chapel Hill area

      Targeted neighborhoods are Northeast Central Durham (NECD), Southwest
      Central Durham (SWCD), and Walltown. The guidelines will include maps which
      clearly delineate the neighborhood boundaries.


Revised July 2010
           Combined Maximum LTV:          100% of the after rehabilitation
            appraised value. The first and the second mortgage combined cannot
            exceed the appraised value of the property or after rehabilitation of
            appraised value.

           Conditions of First Mortgage: Adjustable rate mortgages are not
            allowed. No cash back/refund to the buyer from the loan closing will be
            allowed. No owner financing.

           Eligible Closing Cost:    Closing cost can be financed if the property
            appraises for more than the sales price. The difference between the
            appraised value and the sales price can be used to finance closing costs,
            but only if necessary.

           Participant’s Contribution Requirement: The applicant must contribute
            a minimum of $500 of their own money. The applicant may be required to
            contribute additional funds for closing costs and other expenses.

           Residency/Citizenship: Residency/Citizenship: City /County residency
            not required at the time of application. Applicant must be a citizen or legal
            alien of the United States. Legal Alien must provide:
                1. A valid copy of a green card and social security card;
                2. Evidence of application of citizenship.
                3. Tax Identification Numbers are not acceptable.

           First-time Home Buyers Definition
            All participants must be First-time Home Buyers: First-time homebuyer
            means an individual or an individual and his or her spouse who have not
            owned a home three years prior to the purchase of a home except that:

                    1. Any individual who is an displaced homemaker may not be
                       excluded from consideration as a first-time homebuyer under this
                       paragraph on the basis that the individual, while a homemaker,
                       owned a home with his or her spouse;

                    2. Any individual who is a single parent may not be excluded from
                       consideration as a first-time homebuyer under this paragraph on
                       the basis that the individual, while married, owned a home with his
                       or her spouse or resided in a home owned by the spouse; and

                    3. An individual may not be excluded from consideration as a first-time
                       homebuyer under this paragraph on the basis that the individual
                       owns or owned, as a principal residence during the three-year
                       period if a dwelling unit whose structure is:




Revised July 2010
                           a) Not permanently affixed to a permanent foundation in
                              accordance with local or other applicable regulations; or
                           b) Not in compliance with the State, local, or model building
                              codes, or other applicable codes, and cannot be brought
                              into compliance with such codes for less than the cost of
                              constructing a permanent structure.

           Real Estate Ownership:
            Applicants are ineligible if they own any other property listed as real estate
            such as a rental property, vacation property, land, etc. Applicants who
            have ownership interest in heir property will be reviewed on a case by
            case basis.

           Eligible Property:
                1. Applicants cannot purchase a mobile home or trailer;
                2. Applicants cannot purchase a duplex, a dwelling where part of the
                    property will be a rental unit, or a dwelling that has the potential to
                    be a rental unit;
                3. The property must be in the city or county limits of Durham;
                4. The City will not finance a construction loan. The property must be
                    an existing home; and

           THE PROPERTY MUST BE IN COMPLIANCE WITH MINIMUM
            HOUSING CODE STANDARDS PRIOR TO LOAN CLOSING.

             NOTE: The City of Durham Minimum Housing Code does not address
             possible lead hazards, or other possible environmental hazards.
             Inspection by the City of Durham for Minimum Housing Code Compliance
             does not indicate that the dwelling is “safe.” It only indicates that the
             dwelling has been inspected for conditions, which would violate the
             Minimum Housing Code. The City makes no claim that a dwelling is safe
             from environmental hazards as a result of passing the Minimum Code
             requirements, and the City assumes no liability for any environmental
             hazard damages, including those from lead-based paint or plumbing
             fixtures, as a result of conducting such an inspection.

             All dwelling built prior to 1978 are presumed to contain some lead-based
             paint, and may include other materials, which may contain lead. If your
             dwelling was built before 1978, information can be obtained through the
             City of Durham Department of Community Development and the North
             Carolina Department of Health and Human Services. Such information
             will address lead-based paint hazards, health effects, methods of
             treatment and programs that are available for remediation.

           Liquid Assets: Liquid Assets are limited to $20,000 (does not include
            pension, IRA, 401K’s or life insurance with cash value).

Revised July 2010
                              Reasonable Accommodations
Anyone who requires an auxiliary aid or service for effective communications, or a
modification of policies or procedures to participate in the City program, service, or
activity, should contact the office of Stacey Poston, ADA Coordinator, Voice: 919-560-
4197 x21254, TTY: 919-560-1200; Stacey.Poston@durhamnc.gov, as soon as
possible but no later than 48 hours before the scheduled event.




Revised July 2010
          




Revised July 2010
Revised July 2010
Revised July 2010
Revised July 2010
                             city of durham
                   Highlights of
          Homeownership Purchase Programs
                     CDBG/HOME/Bond/ADDI Funds
The homeownership purchase assistance programs are designed by the City of Durham,
Department of Community Development to assist prospective homebuyers in purchasing their
primary residence and becoming first time homebuyers. The following information depicts
highlights of the City of Durham Reference Guide:

     Applicants must “read”, “sign” and “date” the Highlights of the Homeownership Purchase
      Programs before submission to the City of Durham.

     Applicant must submit the original Pre-Application for homeownership. Copies are not
      acceptable.
     Total household income cannot exceed 80% of the HUD area median income for
      Durham (family of four - $57,050) as amended from time to time.
     Must be a first time homebuyer (have not owned a home in the past 3 years).
     Must purchase property within the City or County limits of Durham.

     Maximum City Second Mortgage assistance is up to $20,000 or 20%, whichever is less.

     Interest rate on all first time homebuyer second mortgage loans is 2%.

     Must contribute at least $500.

     Must attend a Homeownership Education Workshop that is approved by the City of
      Durham, Department of Community Development.
     Sworn Police Officers/Sheriffs must complete all phases of training prior to loan
      closing.

     Property must meet minimum housing code and HUD Housing Quality Standards.

     The borrower is responsible for securing first mortgage financing and any purchase
      expense not provided by the City.

       Maximum One- Family Mortgage loan limit under, Section 203(b) is calculated at 95% of
        U.S. Department of Housing and Urban Development, FHA Mortgage Loan Limits.
        Published and review on a quarterly basis at
        https://entp.hud.gov/idapp/html/hicostlook.cfm. In order to access correct loan amount,
        please insert Durham for County status.

Revised July 2009
     Applicants must be a U.S. Citizen or a Legal Alien.

     Applicants must attend an Education Workshop and obtain a certificate of completion.
      Additionally, applicants must receive one-on-one housing counseling and obtain a
      certificate of completion.

     Subordination Agreements for residential mortgage loans will only be executed by the
      City Manager for the purpose of lowering the first mortgage interest rates.
     During the affordability period, in the event that the property is sold or title is transferred
      by conveyance, will, operation of law or otherwise, voluntarily or involuntarily, when the
      first mortgage is refinanced, or no longer the principal residence of the homebuyer, the
      City of Durham shall recapture all or portion of the subsidy to the homebuyer to include
      interest.

     The period of affordability for First Time Homebuyer 2nd mortgages up to $20,000, is ten
      (10) years and the term of the loan is 30 years.

The use of HOME funds requires that a period of affordability be determined as it relates to the
resale of the property. The affordability period is based on the amount of HOME funds
provided.

                    HOME Funds Provided                           Affordability Period
                          <$15,000                                       5 years
                      $15,000 - $40,000                                 10 years
                          >$40,000                                      15 years

     Household income will not be re-verified at the time of closing unless more than six
      months has elapsed since income eligibility was determined.

     Most recent check stubs for applicant or co-borrower must be attached to the completed
      application when submitted for processing.

     If applicant is 18 years old and unemployed, please request an Income Affidavit verifying
      no income for that person.

     Must submit with the application the source of income documentation such as:
      Paycheck stub, social security, pension, supplemental security income (SSI), and child
      support. If you receive multiple sources of income, please submit all sources. If you are
      self employed, you must submit three (3) years of tax returns.

     If there is anyone in the applicant’s household 18 years old or older and employed,
      verification of income must be provided. Please attach to the application the most recent
      check stubs. If the person is a student, verification of this information must be provided.
      Individuals receiving social security, disability, retirement or other sources of income are
      required to provide proof of this income at the time of application.

     Applicants must meet all the requirements stated in the City of Durham’s Reference
      Guide as amended and updated from time to time.
Revised July 2009
                                 City of Durham
                   Homeownership Purchase Assistance Programs

    Program               Mortgage            Subsidy Amount             Interest         Required             Residency
                            Type                   Up to                   Rate          Contribution         Requirement




  First Time                  2nd                 $20,000                    2%               $500                      No
  Homebuyer
Neighborhood                   2nd         $30,000/$16,000                   2%               $500                      no
  incentive                                for abatement if
program (NIP)                                property in
                                               central
                                            neighborhood
Neighborhood                   2nd             $25,000 if                    2%               $500                      no
  incentive                                 property outside
program (NIP)                                  of central
                                             neighborhood




  Individual
 Development                Grant                  $7,500                   N/A               N/A                       No
Accounts (IDAs)
  Side by side                 2nd                $20,000                    2%               $500                      No
  Acquisition
  Section 8                    2nd                $20,000                    2%               $500                      No
Homeownership

   Eastway                     2nd                $25,000                    2%               $500                      no
   Village

 I hereby have read and understand the criteria of the City of Durham’s Homeownership Purchase Programs. Please
 submit this signed document with your application to City of Durham, Department of Community Development at 807
                                nd
 East Main Street, Building 2, 2 Floor in Durham, or mail to P.O. Box 25494, Durham, NC 27701


 ________________________                                                                    _______________
 Borrower Signature                                                                          Date


 ________________________                                                                    _______________
 C0-Borrower Signature                                                                       Date


 *Anyone who requires an auxiliary aid or service for effective communication, or a modification of policies or
 procedures to participate in the City program, service, or activity, should contact the office of Stacey Poston, ADA
 Coordinator, ,, Voice: 919-560-4197 x21254, TTY: 919-560-1200; Stacey.Poston@durhamnc.gov as soon as
 possible but no later than 48 hours before the scheduled event.
 Revised July 2009
                                                               CITY OF DURHAM
                                              Neighborhood Incentive Program (NIP)
                                                          (CDBG, or HOME FUNDED)
                                                             PRE-APPLICATION
Date:______________               Lender:______________________________________________             Phone#: _______________________

                                                           BORROWER INFORMATION

Borrower:                                                                                               __________________
                                       Last                               First                             Middle



Co-Borrower:                                                                                             __________________
                                       Last                               First                             Middle

Current Address:                                                           , Durham, NC_____________________________________

Phone Number: Home                                         Work_______________________________________________

Number of years/months at Current Address:                        Current Monthly Rent $_______________________

Are you an U.S. Citizen?       or a legal alien?          Race:                    Sex:__________________________

Marital Status:                 Single                              Married

Who is the Head of Household?:                                                      Family Size:________________________________

                                       HOUSEHOLD INFORMATION: List all persons in the household

            NAME                       DOB (MM/DD/YY)              RELATIONSHIP                        SOCIAL SECURITY #

                                                                       Applicant




                                                    EMPLOYMENT INFORMATION
                                       LIST A MINIMUM OF TWO (2) YEARS EMPLOYMENT HISTORY
Borrower’s Current Employer:_________________________________________________________________________________________
Address: ____________________________________________________             Phone:    ____________________________________________
Gross Monthly Wages/Salary:                                               Length of Employment:_________________________________
Co-Borrower’s Current Employer:______________________________________________________________________________________
Address: ____________________________________________________             Phone:     ___________________________________________
Gross Monthly Wages/Salary :                                              Length of Employment:_________________________________
Borrower’s Previous Employer:_________________________________________________________________________________________
Address: ____________________________________________________             Phone: ______________________________________________
Gross Monthly Wages/Salary:                                               Length of Employment:_________________________________
Co-Borrower’s Previous Employer: ____________________________________________________________________________________
Address: ____________________________________________________             Phone: ______________________________________________
Gross Monthly Wages/Salary:                                               Length of Employment:_________________________________

                    ATTACH A COPY OF APPLICANT’S AND/OR CO-APPLICANTS LAST 30 DAYS OF PAY STUB(S)
                             AND DOCUMENTATION OF ALL OTHER INCOME TO THE APPLCIATION
                                                   INCOME and FIXED EXPENSES INFORMATION
         Other Monthly Income:                                                 Monthly Fixed Expenses:
         Social Security                           $        _                  Car Payment             $ __________
         Public Assistance                         $                           Installment Loans       $ __________
         Child Support/Alimony                     $                           Child Support           $ __________
         Interest/Dividends                        $                           Alimony                 $ __________
         Other:                                    $                           Any Other Debts         $ __________
         See above for gross monthly               $__________                 Total Monthly Expenses: $ __________
         wages/salary:
         Total Monthly Income:                     $
                              LIQUID ASSET INFORMATION: Checking & Savings accounts, stocks, bonds, etc.
   CHECKING/SAVINGS                                AMOUNT                                  BANK                                  ACCOUNT #




TOTAL LIQUID ASSET(S):$ _________________________________________________________________________________ ______

                                                                             INCOME
Family
Size             1                     2                    3                     4                    5                    6                 7       8
80%         38,000               43,400                48,850               54,250               58,600                62,950          67,300      71,650

                                                          FIRST-TIME HOME BUYER PROGRAM
                                                     20% SECOND MORTGAGE PROGRAM
                                         Maximum Sales Price cannot exceed 95 % of FHA Loan Amount
          Maximum City 2nd Mortgage: $30,000                                       Maximum City 2nd Mortgage: $25,000
          Lead abatement Grant up to $16,000                                       Maximum Income: 80% of the median income
          Maximum Income: 80% of the median income                                 Interest Rate: 2% fixed
          Interest Rate: 2% fixed                                                  Term 30 years, Non-deferred
          Term 30 years, Non-deferred                                              Underwriting Ratios: 35 and 43
          Underwriting Ratios: 35 and 43                                           Home must be built After1978
          Home must be built Prior 1978
                                                                   PROGRAM HIGHLIGHTS
You may not qualify for this program if you have substantial late payments, past due accounts, or judgments/collections on any credit in the last twelve (12)
months. You must have a good rental history, and/or good utility credit history. Liquid assets cannot exceed $20,000. Outstanding medical collections
totaling up to $1000 are forgiven, any medical judgments, and any other outstanding past due accounts, collections, or judgments will disqualify you from the
Program. Outstanding medical collections greater than $1000 must be paid prior to loan closing. Applicant(s) must be a first time home buyer (have not
owned home within the past 3 years). Participants must complete a three-night/day homeownership education workshop and one/two hour individual
counseling sessions.

The house to be purchased must be within one of the three targeted Durham County neighborhoods: Northeast Central Durham (NECD), Southwest Central
Durham (SWCD), or Southside. The house to be purchased must meet the Department of Community Development Housing Quality Standards and the City
of Durham Minimum Housing Code and have a certificate of compliance at the time of closing. Applicant(s) do not have to be a residence of Durham at the
time of application. Applicant(s) must be a citizen or legal alien (s) of the United States, and meet all requirements stated in the City’s Reference Guide.

The City of Durham’s Neighborhood Incentive Program (NIP) is a subsidy program designed to assist very
low to moderate income individuals/families in purchasing their primary residence and becoming homeowners.
This program is funded with federal HOME , CDBG, or Bond funds. Under this program the borrower will be responsible for securing a first mortgage to
finance any purchase expense not provided by the City. The borrower is required to contribute a minimum of $500 to the purchase of the property and to pay
all closing costs that are not financed. The Neighborhood Incentive Program (NIP) loans have a 2% interest rate. These loans must be repaid over a 30-year
term.

Subordination Agreements for the City of Durham’s residential mortgage loans will only be executed by the City Manager for the purpose of
lowering interest rates.
                                                             CREDIT REPORT INFORMATION
                           Participants in these Programs must meet minimum credit requirements. If you are not familiar with your
                             credit situation, please get a copy of your credit report and review it. A copy can be obtained from:
                             Equifax, P.O. Box 740241, Atlanta, GA 30374-0241 (1-800-685-1111) or Experian, P. O. Box 8030,
                                                             Layton, UT 84041, (1-800-682-7654).

                         I/We, the undersigned, do hereby certify that all information given in this application is true and accurate to the
                         best of my/our knowledge. I/We understand that the City of Durham and/or its agent may rely on the accuracy
                          thereof in acting on this application and that any fraudulent information may result in disqualification from the
                           program. I/We also hereby give my/our permission for the City of Durham and/or its agent to access my/our
                                     credit report(s) and make inquiries as to my/our credit, income, assets, and employment.

                                                                                       _________________________________
         Signature of Borrower                                                               Signature of Co-Borrower


               Date                                                                                         Date
                             THE CITY OF DURHAM DEPARTMENT OF COMMUNITY DEVELOPMENT IS AN EQUAL OPPORTUNITY LENDER
                                             All applications are to be mailed to the following address:
                                             City of Durham, Department of Community Development
                                                           First Time Home Buyer Program
                                                         P.O. Box 25494, Durham, NC 27701
                                                                  (919) 560-4197 TDD


                      Revised July 2010

				
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