MassHousing has partnered with the town of Saugus, Saugusbank and the Community Restoration Co. to make grants available to first-time homebuyers who purchase foreclosed homes in Saugus.

Qualified homebuyers who obtain a MassHousing Mortgage through Saugusbank will be eligible for a second loan to assist in rehabilitating the foreclosed property. The second loan will be funded through the Neighborhood Stabilization Program (NSP), which was created through federal economic recovery legislation, according to a statement.

The rehabilitation loan could be forgiven depending on how long the homebuyer lives in the home and the total amount of NSP funds used, MassHousing said.

"This partnership is another important tool in helping the town of Saugus reclaim distressed properties for new homeowners," said MassHousing Executive Director Thomas R. Gleason. "The NSP program will make money available to help homebuyers renovate foreclosed homes that are at risk of becoming blighted."

Homebuyers must be deemed eligible for the NSP program by the Community Restoration Co., a local nonprofit housing agency. There are no limits to the NSP rehabilitation grants, but the cost of renovation must be deemed "reasonable" by the Community Restoration Co.

Homes eligible under the program must be foreclosed or abandoned one-, two- or three-family properties. Borrowers must be eligible for a MassHousing Mortgage, meet income and purchase price guidelines, have a minimum 3 percent down payment for one- or two-family homes, and 5 percent down payment for three-family homes, and complete a homebuyer education course.

A public meeting for anyone interested in the NSP program will be held in the Saugus Town Hall Auditorium on Wednesday, June 30, from 6:30 p.m. to 8 p.m.