Upper Darby, PA · Member since 2013 · 146 posts · 7 votes
Has anyone worked with NACA before to get an OO mortgage. It looks awesome on paper; however, whenever something looks to good to be true I like to put the feelers out a bit. Below is the link to the website if that helps jog anyone's memory.
https://www.naca.com/nacaWeb/index_main.aspx
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
We've sold over a dozen houses to NACA buyers (it was our secret selling weapon for a couple years when we knew many of the NACA real estate agents very well)...
The program is for real, despite it sounding too good to be true. The downsides are that the approval process will take some time and patience (group meetings, 1-on-1 financial counseling, long approval process, etc), but if you can deal with the time and all the meetings, you'll potentially get a zero-down mortgage with a near-zero interest rate.
The best part is, NACA has a fantastic track record. Their default/foreclosure rate over 10+ years is less than 1%, as they are very serious about ensuring that they don't over-leverage their borrowers (their DTI requirements are strict), and they have contingency plans for borrowers who get into payment trouble (they'll actually take over payments for periods of time until the borrower gets back on their feet).
If you're a NACA borrower, you will be required to volunteer at future NACA events (certain number of hours per year) and NACA isn't available in all cities, so not everyone is going to have them as a resource. Also, you can't ever rent out your property if you have a NACA loan, so you can't ever convert your property to a rental.
Also, NACA tends to focus to lower-income areas and lower-credit borrowers, but it's certainly not restricted to those areas or buyers. In fact, my sister-in-law -- who makes a lot of money and had lots of financing options -- bought an expensive duplex in a nice part of Buffalo using a NACA loan...no money down and an interest rate below 2% (used seller contributions to buy down the rate).
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
12y
We sold a house to a NACA borrower about a year ago. Like you say, sounded too good. We closed without issue. Like USDA loans... sometimes there are deals out there that seem too good to be true, but they are for those people who fit the golden slipper.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
We've sold over a dozen houses to NACA buyers (it was our secret selling weapon for a couple years when we knew many of the NACA real estate agents very well)...
The program is for real, despite it sounding too good to be true. The downsides are that the approval process will take some time and patience (group meetings, 1-on-1 financial counseling, long approval process, etc), but if you can deal with the time and all the meetings, you'll potentially get a zero-down mortgage with a near-zero interest rate.
The best part is, NACA has a fantastic track record. Their default/foreclosure rate over 10+ years is less than 1%, as they are very serious about ensuring that they don't over-leverage their borrowers (their DTI requirements are strict), and they have contingency plans for borrowers who get into payment trouble (they'll actually take over payments for periods of time until the borrower gets back on their feet).
If you're a NACA borrower, you will be required to volunteer at future NACA events (certain number of hours per year) and NACA isn't available in all cities, so not everyone is going to have them as a resource. Also, you can't ever rent out your property if you have a NACA loan, so you can't ever convert your property to a rental.
Also, NACA tends to focus to lower-income areas and lower-credit borrowers, but it's certainly not restricted to those areas or buyers. In fact, my sister-in-law -- who makes a lot of money and had lots of financing options -- bought an expensive duplex in a nice part of Buffalo using a NACA loan...no money down and an interest rate below 2% (used seller contributions to buy down the rate).
Commercial Real Estate Broker · Corona, CA · Member since 2013 · 7 posts · 8 votes
12y
Yes, but is is not really 0.0% it is something like 0.385% and was when the rates were a little lower. It costs points to buy it down, which can be negotiated up front in your offer. You must also have a NACA approved Broker.
Upper Darby, PA · Member since 2013 · 146 posts · 7 votes
12y
Thanks for all of the feedback. I'm not sure if they would work for my situation since I plan on buying a small multifamily (2-4 units). Since @J Scott said you aren't able to convert them to rentals I don't think that would work out for me. Thank you for all the information though.
Thanks for all of the feedback. I'm not sure if they would work for my situation since I plan on buying a small multifamily (2-4 units). Since @J Scott said you aren't able to convert them to rentals I don't think that would work out for me. Thank you for all the information though.
It's fine if you plan to live in one unit for the duration of your ownership...
Ok. Since I have a few months before I purchase it might not be a bad idea to look into NACA. Even if they do take a long time or it's a drawn out process I have at least 3 months but prob closer to 6 months. It seems at least worth it to look into it.
Brooklyn, NY · Member since 2013 · 5 posts · 16 votes
12y
Hi Elisha,
I'm looking into NACA as well for my first multi-unit property. I've read a lot positive and negative on forums. I am looking for a fixer-upper and have read that dealing with their HAND dept for the rehab loan is the worst part of the deal, but for the savings I am willing to give it a go. FHA 203k is my backup. I'm up for the due diligence required and will update this thread on how it goes with them as a buyer. Attending the initial meeting this coming Saturday. Best Wishes to You!
@J Scott @Faith Brashear @Chris Martin Thanks for sharing! It's great to hear from people with positive real life encounters with the NACA program :)
I had my first meeting at the beginning of the month (the big information session). I have my follow-up one-on-one meeting on the 27th. I will also try and update this post after that meeting.
Los Angeles, CA · Member since 2013 · 25 posts · 1 vote
12y
@Nefera Croom...I'm so glad you posted this and asked all those questions. I was considering doing the same thing, as in purchase a multi-fam property. Please keep us posed on the meetings. I have my initial meeting at the end of this month. I will be nice to get the inside scoop before each step of the process.
Real Estate Investor · Austin, TX · Member since 2014 · 25 posts · 6 votes
11y
Hi Ladies this seems like a good post, most of all of you were seeking out information on NACA, could anyone relay their experience or if they were able to close a deal with NACA mortgage? Thanks
Upper Darby, PA · Member since 2013 · 146 posts · 7 votes
11y
They are a good group and worth it financially if you're willing to jump through them. Unfortunately, my fiancé and I needed to move and couldn't wait the additional time they wanted to "prove" we were ready to be homeowners. The reason we were told we had to wait 6 months was because I was 1-2weeks late on my AT&T bill. I wrote a letter explaining it why the situations happened and those were the only bills. They are tough but a good group.
Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
11y
A cousin of mine got a mortgage with them. It was not 0%. She did get a great rate but it was a long process. She is happy she did it but it took a year.
Wholesaler/ Investor · Houston, TX · Member since 2014 · 491 posts · 113 votes
11y
Great information so far. I'm just hearing about NACA and starting to really research them and see if this would be a good route for a first time newbie investor like myself.
I know this thread began last year, but, we bought our first home through NACA in 2012 and have never been happier. We were able to buy down our rate to 1.875%. The HAND/Rehab Dept is a tricky part of the process BUT it was all worth it and their process is thorough for a reason. They want to make sure people purchase decent, livable properties and have an affordable mortgage which means homeowners are less likely to lose their homes. We started in May of 2012 and closed on December 28, 2012.
I just went to the first required meeting for the NACA mortgage program. It provided a very lot of information, and they were able to lay out everything that is required to qualify. They made it seem as if the process can take as little or as long as you let it take, but that the quickest estimate was 90 days from initial meeting to closing.
I am looking to find a multi-family house and then live in one unit while renting out the others. I think that NACA offers a very unique opportunity for first time homebuyers to gain equity while putting very little down upfront. It was mentioned many times that this mortgage program is not for investors, but I believe that by searching for the right home that meets certain criteria, a home purchased through the NACA could indeed by a good investment.
I look forward to hearing from anyone if they have any other insight. @Faith Brashear can you provide any other info about the NACA that hasn't been mentioned already?
I closed on a 3-family home in Brooklyn through NACA in July 2015. I was preapproved by NACA's underwriters (Citibank) August 2015 but had a few deals fall through. The seller, who represented an investment group, was reluctant to sell me the house because of NACA's reputation. However, it was seller who needed to delay closing in the end. My interest rate is 2.5%. At closing I only had to pay taxes, insurance, and mortgage interest and I was able to finance the necessary renovations in the mortgage. I have a good friend who had about the same timeline I did for purchasing, but ended up going through a different program because of issues with uninformed and unresponsive counselors in DC . I will say that yes, the process is tedious, and there is a high counselor turnover, but the savings made it worth it IMHO.
Also, I ended up dealing directly with the seller's agent as many realtors had grown frustrated that I would not budge on my criteria in a tough market. This was not a problem for NACA.
NACA paid for a great attorney who walked me through from accepted offer through closing.
My timeline
Jan 2014 Attended NACA workshop
March 2014 - First scheduled NACA meeting but counselor had left NACA, was reassigned to new counselor
April 21, 2014 First NACA appt with new counselor (this counselor was not well versed with NACA)
May 2014 - Reassigned to new counselor (This was the counselor who helped get me qualified by the underwriters. He was much better than my 2nd counselor)
I decided I wanted to be approved for a higher purchase price amount so I took on the payment shock challenge for 3 months.
August 2014 - I was qualified for the higher amount and began house hunting
April 2015 - Offer accepted on my current home (Brooklyn market is tough and I was picky)
July 2015 - Closed on home (I had to have multiple contractor bids on the scope of work that was required, seller had some delays)
Best of everything to you! If you have some flexibility with your timeline the savings are definitely worth the patience.
Brooklyn, NY · Member since 2016 · 46 posts · 11 votes
10y
@Nefera Croom Hi, I am currently in the NACA process but due to the extremely high prices in Brooklyn or New York for that matter I have been searching New Jersey for a multi family. What area of Brooklyn did you find your home that was able to qualify under the NACA housing limits?
Brooklyn, NY · Member since 2013 · 5 posts · 16 votes
10y
@Allana Alex I'm in East New York near the Broadway Junction subway stop and the LIRR East New York stop. When I was house hunting I considered homes in East Flatbush, Canarsie, Remsen Village, Cypress Hills, and East New York. All in all, NACA really needs to update their purchase price limits. The limits have increased in the last year. When I closed the limit for a 3 fam was around 560k. I vaguely recall being told that the purchase limits are supplied by HUD or some other federal agency. That doesn't seem to be the case as FHA has much more reasonable purchase price limits. As long as a buyer can meet the rigorous qualification, it seems silly that the limits remain so low.
Real Estate Agent · Hackensack, NJ · Member since 2014 · 321 posts · 412 votes
10y
I had buyer clients use NACA about 2 years ago. How the process goes probably relies on that particular office. In my case, the process was arduous. Most sellers in my area didn't want to deal with them. When its a seller's market, the seller rather take an offer with a buyer putting a down deposit and not have to jump a million hoops that NACA requires.
The particular NACA we dealt with was severely understaffed and every part of the process was time consuming and dragged on. I know they are advocating for the buyer, but the repairs they require are petty and ridiculous. Many of the repairs they required were very minor in nature and a buyer could repair themselves after closing. Luckily we had a seller who was patient and liked my buyer clients.
The interest rate is great, not having to put a down deposit down, and access to Bank of America foreclosures before they hit the market are the key positives, but its hard for sellers to accept offers from clients using NACA. Maybe its easier in less expensive/urban areas where its more common.
Brooklyn, NY · Member since 2016 · 46 posts · 11 votes
10y
@Nefera Croom Wow!! Broadway junction area! You did really well. That area is really starting to change I hear, must be exciting to be a witness to all of the changes that are going to add to your investment. I grew up in East Flatbush/Canarsie so I really wanted to get away and have something different and most importantly be very close to a subway. There appears to be some opportunities in Cypress Hill at present. I always hoped to live in a neighborhood where I could walk up the block and go to a bar and walk home when I was done, or pick up a baguette at a nearby pastry shop. You may soon have that where you are if you don't already.
As such I find myself focusing my attention on Jersey City where I think I may be able to find these amenities and get a bargain on the house. I will definitely do some research on East New York, broadway junction is such a convenient transportation hub, which is excellent for the renters.
North NJ · Member since 2015 · 100 posts · 28 votes
10y
hi. Im in Brooklyn and have my first one on one NACA qualification meeting next month. I did the workshop earlier this summer. This thread really gave me more insight on the program from the poin of views expressed. Its sounding positive. I didn't really know anyone who has dealt with them in the past to hear feedback from. Im definitely looking to use the program to purchase a multi-family. Ill keep u posted.
We've sold over a dozen houses to NACA buyers (it was our secret selling weapon for a couple years when we knew many of the NACA real estate agents very well)...
The program is for real, despite it sounding too good to be true. The downsides are that the approval process will take some time and patience (group meetings, 1-on-1 financial counseling, long approval process, etc), but if you can deal with the time and all the meetings, you'll potentially get a zero-down mortgage with a near-zero interest rate.
The best part is, NACA has a fantastic track record. Their default/foreclosure rate over 10+ years is less than 1%, as they are very serious about ensuring that they don't over-leverage their borrowers (their DTI requirements are strict), and they have contingency plans for borrowers who get into payment trouble (they'll actually take over payments for periods of time until the borrower gets back on their feet).
If you're a NACA borrower, you will be required to volunteer at future NACA events (certain number of hours per year) and NACA isn't available in all cities, so not everyone is going to have them as a resource. Also, you can't ever rent out your property if you have a NACA loan, so you can't ever convert your property to a rental.
Also, NACA tends to focus to lower-income areas and lower-credit borrowers, but it's certainly not restricted to those areas or buyers. In fact, my sister-in-law -- who makes a lot of money and had lots of financing options -- bought an expensive duplex in a nice part of Buffalo using a NACA loan...no money down and an interest rate below 2% (used seller contributions to buy down the rate).
Could you explain what is meant by "used seller contributions to buy down the rate "?
We've sold over a dozen houses to NACA buyers (it was our secret selling weapon for a couple years when we knew many of the NACA real estate agents very well)...
The program is for real, despite it sounding too good to be true. The downsides are that the approval process will take some time and patience (group meetings, 1-on-1 financial counseling, long approval process, etc), but if you can deal with the time and all the meetings, you'll potentially get a zero-down mortgage with a near-zero interest rate.
The best part is, NACA has a fantastic track record. Their default/foreclosure rate over 10+ years is less than 1%, as they are very serious about ensuring that they don't over-leverage their borrowers (their DTI requirements are strict), and they have contingency plans for borrowers who get into payment trouble (they'll actually take over payments for periods of time until the borrower gets back on their feet).
If you're a NACA borrower, you will be required to volunteer at future NACA events (certain number of hours per year) and NACA isn't available in all cities, so not everyone is going to have them as a resource. Also, you can't ever rent out your property if you have a NACA loan, so you can't ever convert your property to a rental.
Also, NACA tends to focus to lower-income areas and lower-credit borrowers, but it's certainly not restricted to those areas or buyers. In fact, my sister-in-law -- who makes a lot of money and had lots of financing options -- bought an expensive duplex in a nice part of Buffalo using a NACA loan...no money down and an interest rate below 2% (used seller contributions to buy down the rate).
Could you explain what is meant by "used seller contributions to buy down the rate "?
A NACA buyer can lower their interest rate (potentially to near 0%) by paying a fixed fee upfront ("buying down the rate"). It's pretty common for a buyer to ask a seller to contribute money at closing to be used for this purpose.