Preserving Worcester's Neighborhoods
Worcester's neighborhoods were not immune to the devastating effects of the national housing crisis. As a result, the City of Worcester implemented a progressive action plan to stabilize and preserve neighborhoods in the face of rising foreclosures. A community-wide strategy was launched in January of 2008, with a goal to bring all resources - federal, state, local and private - to bear to assist in saving our neighborhoods. To learn more, read Worcester's
SAVE Our Neighborhoods Plan.
In January of 2009, the City of Worcester was awarded $2.39 million from the Department of Housing and Urban Development (HUD) for the rehabilitation and redevelopment of foreclosed and abandoned properties. The City also applied and received a matching grant of $2.39 million from the State's Department of Housing and Community Development (DHCD) to support neighborhood stabilization efforts.
These funds, coupled with additional private and public resources, will support the purchase and redevelopment of foreclosed properties in areas hit hard by the national housing crisis, as well as the demolition of recurring problem properties that pose a public safety threat and impede private market investment.
The City Manager's Executive Office of Economic, Neighborhood & Workforce Development will administer these funds. Click here to send an email.
There has never been a better opportunity to invest in Worcester's neighborhoods. Learn more about all of the programs available to eligible buyers.
Investing in Worcester's Neighborhoods
Massachusetts Housing Partnership - SoftSecond's Funds for Fixer-Uppers Program - Buy a Foreclosed Property
For a limited time only, SoftSecond has expanded eligibility and offers rehab funds when a homebuyer purchases a foreclosed property as his/her primary residence if it's in an eligible neighborhood. SoftSecond has waived its first-time homebuyer requirement, raised its income limit to 120 percent of median income and offers rehab funds of up to $20,000 per unit or $40,000 per property.
Funding is through the federal government's Neighborhood Stabilization Program. Read the Funds for Fixer-Uppers Q&A for more details and this Map of Eligible Locations. For more information, go to the
MHP website or contact the NeighborWorks HomeOwnership Center of Worcester at 508-791-2170 or info@hocw.net.
MassHousing Purchase and Rehab/NSP Program at a Glance
Eligible Homebuyer:
First time homebuyer with total household income below 120% of area median adjusted for family size.
Eligible Properties:
Single-family detached (no condominiums) and 2- and 3-family homes that are vacant and have been foreclosed upon (foreclosure must be complete, i.e., title transferred); transferred in lieu of foreclosure; or abandoned per NSP rules (mortgage or tax foreclosure initiated, no mortgage or tax payments for at least 90 days and vacant for at least 90 days).
Financing:
First mortgage will be financed through the MassHousing Purchase and Rehabilitation loan program. The second mortgage will be provided by NSP funding.
Downpayment:
All borrowers purchasing a single-family or 2-family unit must have 3% of their own accumulated savings into the transaction. For 3-unit properties, 5% of borrower funds is required, however 3% must be the borrower funds and the remaining 2% may be from gifts and grants.
NSP Grant Limitation:
The maximum grant amount for single-family detached units allowed is $20,000. $40,000 is the maximum amount allowed for 2- and 3-family homes.
Additional Financing:
City funds including City's NSP funding may be added to assist in the rehabilitation costs and will be in the form of a subordinate mortgage. The additional City NSP funds do not impact the limit on funding levels listed above.
Homebuyer Counseling:
Homebuyers must receive at least 8 hours of homebuyer counseling from a HUD-approved or CHAPA-certified counseling agency. The counseling certificate from the counseling agency must be submitted to the lender prior to loan closing.
Recapture of NSP Funds:
As long as the homeowner continuously resides in the property as a primary residence, the NSP Rehab loan shall be forgiven in accordance with the following schedule:
- For NSP rehab funds under $15,000, on each anniversary date of the closing, one fifth (1/5) of the NSP Rehab Grant shall be forgiven;
- For NSP rehab funds totaling $15,000 or more, on each anniversary date of the closing, one tenth (1/10) of the NSP Rehab Grant shall be forgiven.
Participating Lenders for Purchase and Rehab Program:
- Spencer Savings Bank
- Bank of Canton
- BayState Savings Bank
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Q
If I'm the first approved applicant for a particular property, does this preclude others from applying and/or approval?
A
No, there may be multiple applicants applying for eligibility on the same foreclosed property. Receiving an approval of eligibility does not give an applicant favored status as a buyer or preclude another applicant from being simultaneously approved for the same property.
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Q
Do I absolutely need to get an approval before making an offer?
A
No, but an approval must be given prior to closing on the title. However, please note that without the benefit of a prior NSP staff review, you risk purchasing a property that may be determined ineligible.
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Q
How is the duration of the affordability term determined?
A
The affordability term is based on the amount of federal funds allocated per unit and NOT based on total project cost. For example: A traditional 3-family property equals three units. The City can commit NSP funds in the amount of $20,000 per unit and therefore, the total NSP funds committed would equal $60,000.
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Q
May I refinance the property during the term?
A
Yes, however, the terms of the new primary mortgage must be considered "conforming."
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Q
If I pay off the loan during the affordability period, will this nullify the deed restriction?
A
No, the restriction stays intact through subsequent sales, refinancing and/or early pay-off of loan debt. Only a subsequent foreclosure will nullify the affordability period.
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Q
May I cross-collateralize this property during the affordability period to acquire additional property?
A
No, since only a subsequent foreclosure will cancel the affordability restriction you may not use the equity in the subject property to directly finance other property, as doing so opens up the property to risk associated with other investments. However, one is free to refinance a reasonable amount of equity out of the property for such or similar purposes.
Before & After Photos
Before
After
Additional Resources for Neighborhood Stabilization
