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Housing Authority
38250 Sierra Highway, 2nd Floor
Palmdale, CA 93550

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Neighborhood Stabilization Program / Homeownership Assistance Program

This program is designed to provide low and moderate income families with a loan, for closing costs and the amount needed to meet HUD's affordable monthly housing cost guidelines, when they purchase a NSP Assisted Property. Applicants cannot currently own a home. The household must have sufficient income and credit worthiness to qualify for primary financing. Applicant is required to make a minimum 1% investment.

Program Description

The NSP Homeownership Assistance Program (HAP) is funded by the U.S. Department of Housing and Urban Development (HUD) Neighborhood Stabilization Program (NSP) for the purpose of assisting in the redevelopment of abandoned and foreclosed homes. The City of Palmdale (City) has purchased and rehabilitated homes that had been abandoned or foreclosed upon. These homes have had minimum rehabilitation and are available for purchase by qualified low and moderate income families. The HAP loan is specifically designed to assist qualified households with closing costs and the amount needed to meet HUD's affordable monthly housing cost guidelines when purchasing a NSP assisted home in the City of Palmdale.

Loan Limits

The HAP loan provides deferred payment principal and interest second trust deed loans, based on need, in an amount not to exceed $150,000 to make monthly housing costs affordable and for closing costs. After a maximum of 15 years occupancy by the borrower, if the borrower is in compliance with NSP regulations and program guidelines, the loan is forgiven. An annual owner-occupancy certification and monitoring shall be performed.

The HAP loan may not exceed 50% of the purchase price of the property plus closing costs.

Income Restrictions

An applicant's gross annual household income must not exceed 50% OR 120% of area median income (subject to change annually) depending on the particular NSP home being purchased:

Family Size Income Limits
50% of area median
Income Limits
120% of area median
1 $33,950 $81,400
2 $38,300 $93,000
3 $43,650 $104,650
4 $48,450 $116,300
5 $52,350 $125,600
6 $56,250 $134,900
7 $60,100 $144,200
8 or more $64,000 $153,500

Based on April 2018 Family Median Income for Los Angeles County

Affordable Housing Cost Requirement

Affordable housing cost is a percentage of the monthly gross household income used toward the total cost of owning a home. The first trust deed loan payment including taxes and insurance can not exceed 30% of the total gross monthly household income.

Home Buyer Education Requirement

Applicants are required to complete eight (8) hours of HUD approved in-class Home Buyer Education prior to entering into a purchase agreement. This is to insure that the buyers are educated regarding the responsibilities and obligations of homeownership. The Home Buyer Education certificate must be completed within one (1) year prior to Program application submission.

Repayment Terms

The NSP Homeownership Assistance Program is a 5, 10 or 15-year deferred payment loan secured by a second deed of trust. The loan term of 5, 10, or 15 years is based on the amount of assistance provided. A five, ten, or fifteen (5,10, or15) year CC&R is recorded on the property. There are no monthly payments (principal and interest) and the loan is due and payable when the property is sold, rented, or a change in title occurs prior to the five, ten, or fifteen (5, 10, or15) year affordability period. At the end of the loan term, if the homeowner is in compliance with NSP regulations and program guidelines, the loan is forgiven.

Frequently Asked Questions

  • How do I apply to purchase a HAP qualified home?
    Go to the main Neighborhood Stabilization page to see if applications are available and then view the Application Process, Homebuyer Qualifications, and Key Points PDF. You may also contact the City of Palmdale-Neighborhood Services, Terry Rascoe at 661/267-5161 by email at trascoe@cityofpalmdale.org.
  • Is credit history important?
    Yes, credit worthiness is considered in the approval process. A minimum 620 credit score is required.
  • What types of properties are eligible?
    Only homes that have been purchased and rehabilitated by the City through the Neighborhood Stabilization Program are eligible.
  • How much down payment does the applicant need to qualify for the program?
    The applicant is responsible for the lender required down payment. The program requires that a minimum of 1% of lender required down payment be from the applicant's own funds.
  • What are the terms of the HAP loan?
    The HAP loan is a no interest loan, with no monthly payments. After 15 years, if the borrower is in compliance, the loan is forgiven.
  • Do I only have to pay back the HAP Promissory Note amount?
    If you refinance with cash out or sell the home you will be required to pay the HAP Promissory Note. But, if after 15 years you still own and occupy the home the loan will be forgiven.


You may seek financing from any lender of your choosing and are in no way prohibited from seeking financing from a lender who is a financial institution or licensed real estate broker or brokerage company licensed to do business as a lender in the State of California. For a list of experienced NSP-HAP lenders please contact Heather Nichols or Terry Rascoe at 661/267-5161 or email at hnichols@cityofpalmdale.org or trascoe@cityofpalmdale.org

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38300 Sierra Highway, Palmdale, CA 93550 · 661/267-5100 · 661/267-5122 - fax

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