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Neighborhood Stabilization Program


Purpose of Program

The US Department of Housing and Urban Development created the Neighborhood Stabilization Program (NSP) to respond to rising residential foreclosures and property abandonment. The City of Cape Coral will use NSP funds to assist with acquisition, repair, and resale of foreclosed homes.

Home Buyer Benefit

Perspective home buyers will have the opportunity to purchase homes that received necessary repairs. Homes will be sold at an affordable price.

Eligible Applicants

Must meet income guidelines. These limits are based on the income and assets of all residents in the household and adjusted on an annual basis.

The home must be the primary residence of the client. The City of Cape Coral will check the property’s homestead status through the Lee County Property Appraiser on an annual basis. Must not own another home. Must have legal right to reside permanently in the United States.


Qualified buyers will receive assistance in the form of a subsidy (second mortgage to be provided by Cape Coral Housing Development Corporation and City of Cape Coral).

Clients will be responsible for obtaining the first mortgage from a financial institution in the minimum amount of $105,000 in accordance with the City of Cape Coral Lender Guidelines. The NSP assistance will be used to bridge the gap between the amount of the client’s first mortgage and the sales price of the property.

First Mortgage Products

Minimum 30-Year Fixed Rate (No Balloons or ARMS) conventional mortgage loans

Veterans Administration loans (VA)

Federal Housing Administration loans (FHA)

United States Department of Agriculture (USDA)

Maximum PITI Debt-to-Income Ratio of 33%

Maximum Total Debt-to-Income Ratio of 45%

Reasonable Closing Costs included

Homebuyer Minimum-Maximum Assistance

Middle Income Category: 7.5% to 30% of Sales Price*

*plus reasonable closing costs

Buyer Contribution

$2,000 before or at closing.

Resale Provisions

The NSP subsidy received by a client will be secured by a subordinate second (NSP) mortgage for a specified time period of 5-15 years based on the amount of assistance. During this lien period, the second (NSP) mortgage is a “silent” (zero interest, no payments required) mortgage as long as the client uses the property as the primary residence. The second (NSP) mortgage will be forgiven at the end of the lien period.

NSP subsidy must be repaid if the property is sold prior to the end of the lien period or if the property is rented or refinanced without prior approval of the City of Cape Coral.

Homebuyer Education

Homebuyers must complete eight hours of first-time homebuyer counseling through a HUD approved counseling agency.

Homebuyer Program

We offer a variety of programs to assist income qualified families to achieve their dream of homeownership.

Owner Occupied Rehabilitation

We offer Owner Occupied Rehabilitation to very-low and low income individuals in need of repairs. The typical repairs are health and safety issues. Read More >

Homebuyer Workshop

We offer HUD approved Homebuyer Workshops in English and Spanish. The curriculum covers Pre-purchase through Post –purchase. Clients need to call the office to reserve a spot for the class.