FAQ

Who is NCST?

NCST is a non-profit organization that works to restore vacant and abandoned properties to productive use and protect neighborhoods from blight. Our programs facilitate the rehabilitation of vacant but structurally sound homes, enable safe, targeted demolition when necessary, and support creative and productive re-use of vacant land.

How does NCST support the work of my local housing community?

NCST is primarily involved in four distinct activities: (1) The expedited transfer of foreclosed properties and distressed asset from financial institutions (Sellers) to local housing providers (Buyers). (2) The provision of financing through the REO Capital Fund – a fund that aggregates monies from private philanthropic and social investment sources to support the financing needs of community stabilization programs. (3) The support of non-profit and private sector housing providers, state and local governments and federal agencies to develop effective programs that help return more renovated foreclosed or abandoned homes back to local housing stock. (4) The work of a housing advocate – we provide a national voice on behalf of our sponsors and the broader housing community. Together we find solutions and strategies to ensure that neighborhood stabilization programs are effectively implemented and successful.

What services does NCST provide to state and local programs seeking to stabilize distressed communities?

NCST offers local housing providers (Buyers) streamlined access to the REO inventories of financial institutions (Sellers).

  • How NCST assists Buyers with acquiring properties:
    • Save you time and effort – We act as a single point-of-contact with Sellers, which saves you time and effort as you avoid negotiating with multiple entities to purchase REO properties.
    • Simplify the process – We provide a standardized process for identifying, inspecting and evaluating property offers from Sellers.
    • Offer exclusive property access and pricing – We provide you the opportunity to access REO on a First Look basis, before Sellers offer properties to the broader market.
  • NCST Supports Buyers’ Financing Needs. Through the REO Capital Fund, we support financing for the purchase and rehabilitation of foreclosed and abandoned property. Product types include bridge financing for government receivables or acquisition and rehabilitation financing. We can provide flexible financing for short- and intermediate-term needs, and offer important advantages:
    • Leverage More Capital – Through flexible sources of funds, localities can increase the impact of their public funding and increase the scale of neighborhood stabilization activities.
    • Access to Flexible Financing – REO Capital Fund financing can provide cash for quicker acquisition transactions of REO properties, to facilitate acquisition and renovation, and to increase available financing for homeownership and rental projects.

What services does NCST provide to financial institutions (Sellers) seeking to help stabilize distressed communities?

NCST works with Sellers to facilitate the transfer of foreclosed, abandoned and distressed assets in a seamless, cost-effective manner to local housing providers that intend to stabilize their communities and provide new affordable housing opportunities. We can also help identify responsible approaches to providing mortgage capital for new mortgage-ready buyers and investors.

How does the NCST Property Acquisition Program work?

NCST has programs designed to help Buyers acquire significant numbers of foreclosed and vacant properties from sellers. The primary program is First Look, which gives Buyers the opportunity to inspect and acquire foreclosed and vacant properties before they are listed for sale through traditional means. This program offers an adjusted purchase price that reflects savings passed on to the buyers from the sellers, as they avoid a prolonged holding period.

NCST also operates the Neighborhood Stabilization Initiative (NSI), through which we partner with the Federal Housing Finance Agency (FHFA) and Fannie Mae and Freddie Mac to stabilize neighborhoods hardest hit by the housing downturn. The NSI operates in 28 strategic markets that continue to have large concentrations of distressed and low-value REO inventory.

Who are participating Sellers?

At this time, our main Sellers are Fannie Mae, Freddie Mac, Bayview, and Ocwen. Over the last 10 years many of the leading financial institutions in America participated with NCST, supporting the transfer of foreclosed and abandoned properties.

Who are eligible buyers?

NCST partners with non-profit (501c3)*, local housing providers (“buyers”) that serve low- to moderate-income communities and neighborhoods affected by high levels of foreclosure and abandonment. Eligible buyers have a commitment to revitalize communities through property acquisition and rehabilitation, and provide opportunities for quality affordable homeownership or rental housing.

*NOTE: In rare circumstances and in certain markets, NCST may work with for-profit organizations working in partnership with local nonprofit organizations.

How does NCST select and qualify its buyers?

We maintain and uphold a strict set of guidelines, as we want to ensure the success of organizations participating in our programs and of local efforts to restore neighborhood vitality. Each of our Buyers should meet the following eligibility requirements:

  • A community presence and at least two years of real estate project development experience
  • Sufficient capital resources from public or private resources
  • The capacity to assess, acquire, manage, rehab and convey local properties
  • A housing-related business strategy that not only involves the purchase, rehabilitation and sale of a home, it must also convey a broader scope that includes foreclosure prevention and community social investments
  • A concentration in a clearly defined geographic area so a visible impact can be achieved
  • Solid relationships with government agencies, nonprofit organizations and other local stakeholders

How does NCST define its Buyers’ market areas?

Neighborhood stabilization efforts are most effective when concentrated, which is why our Buyers are required to focus in their targeted neighborhoods. These areas are defined by where our Buyers provide services specific to housing counseling and affordable housing redevelopment, and by broader city or county revitalization programs. In rural areas or small communities we often identify a larger regional nonprofit to partner with Buyers to ensure a full range of services is provided.

If a Buyer is participating with NCST, does this limit their ability to acquire properties from other sources?

No. Buyers may purchase properties from brokers, directly from financial institutions, or from other sources.

How many properties must a Buyer purchase to participate with NCST?

Buyers are not held to a minimum purchase requirement; however, the objective of NCST is to assist local Buyers in addressing the factors contributing to market distress. Buyers are encouraged to acquire a sufficient volume of properties to achieve the benefits from geographically concentrated acquisition activity.

How are property closings executed?

NCST does not acquire title to property. We facilitate the transfer of properties by providing standardized documentation and transaction procedures.

How many local entities can participate within a jurisdiction?

A state, large city, or multi-county program may have more than one entity participating as a Buyer, but the geographic boundaries of the areas where the different Buyer entities operate typically should not overlap.

What do you mean by “left-behind neighborhoods?”

“Left-behind neighborhoods” are communities with a high rate of vacant, abandoned and distressed properties that depress the value of nearby homes, create health and safety risks, lower local tax revenues and complicate challenging neighborhood stabilization efforts. A growing divide permeates the U.S. housing recovery, especially in many working class communities – our nation cannot ignore these neighborhoods.

Foreclosure numbers are down, yet it seems like a lot of properties go through NCST. Why do the financial institutions still use your programs?

Foreclosures are down from previous high volumes. However, many communities have not recovered; in fact, some neighborhoods have more abandoned homes than they did before – this is what we call left-behind neighborhoods. In many areas there remains a lack of buyers and a lack of available financing, or a combination of both. These communities have a high rate of vacant and distressed properties, which depresses the value of nearby homes, creates health and safety risks, lowers local tax revenues and complicates challenging neighborhood stabilization efforts.

I have heard in the news about “zombie properties” – what are these?

A zombie property is a property for which a foreclosure case was filed, but has not yet been resolved. Neither the borrower nor the servicer has clear control of the property, and neither has a strong incentive to assume responsibility. Zombie properties are likely to be poorly maintained or blighted, pose a public safety hazard, and threaten the stability of the neighborhood and the community. We work with community buyers and financial institutions to resolve these properties via The Reclaim Project.

Does NCST work with Real Estate Professionals?

Yes. We fully recognize and value that Real Estate Professionals are the eyes and ears of their local housing markets and neighborhoods. Many of our community buyers are real estate brokers, or employ real estate professionals on their staff. We understand and appreciate that real estate professionals are in the forefront for changing negative perceptions about a neighborhood – an important role in the rebranding and ultimate revival of a community.

How does NCST’s work benefit Real Estate Professionals?

When a neighborhood is stable, that means property values are maintained, neighborhood schools perform better, local businesses thrive and the area becomes desirable for future homeowners and renters. This is good news for the neighborhood, for homeowners and for local real estate professionals.

How does NCST follow-up on its Buyers’ end purchasers?

We use a web-based program called REOTrack to verify the purchaser is a targeted owner occupant at 120% of Area Median Income (AMI) or below. Every Buyer is required to enter detailed information about the purchaser into REOTrack. This information may include restricted deeds, property liens, and rental agreements. NCST also follows up on each sale using a combination of post-closing reporting and site visits to ensure our Buyers appropriately use properties to stabilize neighborhoods.

I believe that one of NCST’s Buyers is guilty of fraudulent activity – what should I do?

NCST has no tolerance for fraud. We go to great lengths to vet our program participants to ensure they comply with all guidelines. If you uncover a suspected instance of fraud, please notify us immediately. Provide very specific details about the alleged fraud in an email to inquiries@stabilizationtrust.com. We will take the appropriate actions to research and remediate any fraud.

We’ve heard about communities that have a high HUD Neighborhood Risk Score – what does that mean and how does HUD determine the score?

Basically, the HUD Risk Score is an index from multiple sets of data to help determine if a neighborhood is at risk. The HUD Risk Score index incorporates home value changes, number of residential vacancies, mortgage delinquency rates, the prevalence of non-conventional high-cost loans, unemployment rates and area median income. Keep in mind that rising home values are only one measure of a neighborhood’s health. There is no better data available that incorporates the level of detail found in the HUD risk score model. Further, the data inputs in the model have a much lower variance rate than home values and do not need to be updated as often as a model that relies solely on point-in-time data.

Are NSP and NCST different?

Yes, they are different. The Neighborhood Stabilization Program (NSP) is a grant program established by HUD to stabilize communities that suffered from foreclosures and abandonment. NCST is a national nonprofit (501c3) organization. NCST and NSP formed the first ever public-private partnership of its kind, joining together to make the HUD National First Look REO property acquisition program available to all NSP grantees. This program allowed NSP grantees an exclusive window of access to indicate interest in and make offers on newly available REO properties.

How can I contact you or get started?

Please contact us today using our online form.