The Georgia Dream NSP Purchase Program is a forgivable second mortgage program of up to $14,000 for qualified purchasers of foreclosed homes in certain counties in Georgia.

The NSP in the program’s title stands for “Neighborhood Stabilization Program”.  Often when neighborhoods contain bank owned property the home values of neighboring homes are negatively affected by having their property values significantly reduced.  The main goal of this program is to help stimulate the sales of these bank owned properities and reduce the foreclosures within neighborhoods to help bring equilibrium back into the neighborhoods.

As with many programs, the catch is in the words “qualified purchasers”…what exactly makes up a qualified purchaser?  Well…

• The individual buying the property must be buying from a bank, a government entity, or an eligible nonprofit.
• Only homes in counties that have been identified as an “area of greatest need” are eligbile.  This list is based upon volume and includes all metro Atlanta counties.
• Eligible buyers must have a total household income less than 120 percent of the area median income.

The criteria is determined on a county to county basis.  The list of maximum incomes is available at the Georgia Dream Website.

As opposed to the Federal First Time Buyer program in which purchasers receive a stimulus of up to $8,000 credit which is not required to be paid back; the Georgia Dream Loan is an actual second mortgage.  The Georgia Dream Loan amount is up to 10 percent of the home’s purchase price, not exceeding $14,000.  Although the loan is not an instant credit, it is designed to be forgiven over a period of 5 1/2 years, provided the borrower lives in the house during this duration.

It gets better…

The program can be combined with the federal credit for a total benefit to the purchaser of up to $22,000 on a house purchased for $140,000.  The second mortgage proceeds can even be used for the down payment or closing costs…likewise the federal credit can be used as a down payment too!