NeighborWorks

Back in October I posted "Reflections," in which I voiced my decision to change my living arrangements sometime between July and October of this year (ie. after session ends and before I turn 30). I am open to renting or buying, and have been keeping up with both markets the past few months. 

Each has its advantages. Renting costs less up front, but does not build equity. It's also more fluid...while it's easier for you to move should your situation change, there's also the chance that your rent could go up when you're ready to renew your lease. Buying is scary because you're responsible for all maintenance & repairs, not to mention coming up with a 10-20% down payment. But you're building credit, equity and you get to deduct the interest on your mortgage. And it's yours. :)

I've been keeping an eye on the rental market and have found several interesting possibilities. But in the spirit of keeping my options open, I have been looking into purchase related opportunities...one of which is the NeighborWorks program. 

What is NeighborWorks, you ask? They are a "housing agency that works with prospective homebuyers in many ways. We have several different programs available depending on each consumer’s situation. We help consumers with down payment, closing cost, and property rehabilitation through the use of low interest loans and/or second mortgages." 

They offer some properties for sale and provide homeownership classes for those who quality. 

Guess who qualified?! 

Last night was my first of four homebuyer classes. They are scheduled on Mondays and Wednesdays from 6-8pm for two consecutive weeks. So far, so good. It wasn't as boring as I expected...but it was just the first night. :)  If nothing else, I figure attending these classes will help open up opportunities for me to buy something, if I decide to do that instead of just renting. 

After the intro class last night, I told mom if a) I decide to buy and 2) everything falls into place just right, I will have hit the jackpot by finding this program. Technically, mom heard about NeighborWorks, so she found it...but I'm taking advantage of it. 

Some highlights from last night:
1.) There are 3 "areas" you can buy a home (all of which need to be within the city limits of Lincoln). There are Neighborhood Revitalization Strategy Areas (NRSA), which are the parts of town they're trying to boost and keep from...well, turning into slums. Another designation is Low to Moderate Income Areas (LMIs), which are parts of town that are ok, but they'd like to see updated and increase the own-to-rent ratios. The last is "everywhere else." It's a technical term. :)
2.) A First-Time Homebuyer Program loan through the NeighborWorks program:
- Does not require a monthly payment (it's more like a grant than a loan).
- Is a 0% interest loan.
- Has a minimum amount of $1,000.
- Has a maximum of $15,000 in the NRSA areas, which is completely forgiven after 5 years. One fifth of the loan is forgiven for each of the first 5 years you live in the house. 
- In the LMI areas of Lincoln, there's a maximum of $12,000, of which half is forgiven over 5 years. The other half is a "floating loan" attached to your mortgage and that only needs to be repaid if you sell the house, turn it into a rental or refinance to take money out of the house (if you refinance just to lower the interest rate, that's fine). 
- In the rest of Lincoln, there's a $8,000 maximum, with one half being forgiven after 5 years and the rest being that "floating loan." 
- These loans can be used for part of the required down payment, closing costs and rehabilitation required by the NeighborWorks Construction Manager.
3.) Going through one of their lenders, you only have to come up with a 3% down payment...of which you only need to invest $1,000 of your own money...and the lender does not require private mortgage insurance (PMI), which most lenders require when the down payment is less than 20%! That's a HUGE deal and worth taking the classes just for that! 

I'm sure the next 3 classes are going to be filled with all the things that scare people off of buying a house...figuring out your mortgage payment, a budget, how much you should have in savings for repairs and (uuugh) property taxes. So I fully expect at least some of my enthusiasm to dwindle after Wednesday.

***

I enjoy browsing Zillow.com and have found some condos and townhouses I really like. I've decided I don't want a free-standing house (at least for now) and I like the idea of a homeowners association (HOA) taking care of mowing the grass and shoveling the snow. Some even cover the cost of basic cable, exterior water and insurance as well. 

My hypothetical price range is under $100,000. I'm also looking for at least 2 bedrooms, 2 baths and preferably a two car garage. Some of my current favorites are:


2457 S 27th St. - $88,500
The sale is pending on this one, but I'm still keeping my eye on it. It's two bed rooms, only one bath, but it's in a good location and I love how it's been updated. The built-in and the woodworking around the windows are awesome.

3312 S. 48th St. - $92,500

This is the only single family, free standing house on the list. It's been on the market for about 2 years and needs some work, which would make it perfect for this program, since I'd have money to put into it! It's 3 beds, 2 bath, is 1,484 square feet, has beautiful hardwood floors, built-ins, a fireplace, a finished basement and looks like a castle. :)

4055 Morgan St. - $120,000
This one just came on the market last week and is out of my chosen price range, but I'm kind of in love. If the price drops in the coming months, I will be very interested in seeing it. The open floor plan is great, it has 3 bedrooms, 2 baths and is about 1600 square feet. It also has a two car garage and would be a really easy drive to work.

4000 S. 56th, Apt 244B - $94,900

This condo recently went off the market, but it's one of my all time favorites. Since it wasn't sold, I'm hoping it will pop back on the market in the next few months. It has 3 bedrooms, 2 baths, laundry room, living room and dining room and is 1403 square feet. 

4015 NW 54th St. - $94,500
This is a funky little duplex in the northwest side of town. It's 4 bedrooms, 1.5 baths and 1,575 square feet. One of those rooms would totally be a walk-in closet. Just sayin'. :) I don't love the lack  of garage, but it does have a carport.

Enjoy and happy Tuesday! 

~ Katie