Rental Property Investor · Kansas City, KS · Member since 2016 · 114 posts · 57 votes
Hello! It's time to roll up my sleeves! I am looking at different first time homeowner programs to get into my first house hack!
I know with
FHA
3.5% down with seller assist up to 6%
Smoother process (I heard) than NACA
Since it's federal of course there is a lot of red tape
Have to stay for 1 year
NACA (still need to do more research)
0% down , no down payment, no closing costs
Longer drawn out process than FHA
Have to stay three years? ( not sure on this one)
Buy out clause close to 25k?
I would like to get into a fourplex but a duplex would do! I want to get into something by the end of the year.
Should I go with FHA since they are more proven and used in the investing community and possible get into my house hack quicker?
Should I got with NACA that would help me preserve capital, but have a longer process, but possibly have me in the same place for 3 years which is what I don't want lol
Investor · Buffalo, NY · Member since 2016 · 100 posts · 71 votes
8y
I’ve recently contributed to several threads where NACA was discussed fairly thoroughly as far as pros and cons. It’s a national program. Search the forums for NACA and probably most of your questions have already been answered. There is also a NACA executive that posted too. Hope that helps.
Ottawa, IL · Member since 2016 · 242 posts · 107 votes
9y
@Rodney Harris - Never heard of NACA so I'm guessing it's an area thing (like we're out in the country so we have a rural development - USDA loan type here) I'm guessing this is similar to USDA but honestly not sure so I'll just shut up on that one.
However, FHA is a little bit less smooth than you might think. FHA has guidelines for live ability issues, so it's hard to fund distressed properties with it. Also, you'll have PMI for the life of the loan, which can add a few hundred dollars or more a month for the whole life of the loan (unless you refinance - which costs too) and you are forced to escrow taxes with FHA. So there's some things to consider on that end.
Personally, I always say go conventional when possible (sometimes it's not for people who claim cash as income or have lower credit scores or DTI issues) but if it's just down payment, there's so many 3.5% conventional programs out there now. And you can always ask for seller concessions to cover closing costs (though I don't really recommend that unless you really don't have that capital or need if free for immediate repairs!). So talk to some lenders on that and compare all the numbers in terms of payment and life of the loan stuff.
Investor · Buffalo, NY · Member since 2016 · 100 posts · 71 votes
8y
I’ve recently contributed to several threads where NACA was discussed fairly thoroughly as far as pros and cons. It’s a national program. Search the forums for NACA and probably most of your questions have already been answered. There is also a NACA executive that posted too. Hope that helps.
Columbia, SC · Member since 2016 · 20 posts · 5 votes
8y
NACA is slightly complicated. I've had two clients go thru the program 1. Didn't get her home 2. Did pay a bill on time and had to start the 6 month process over. If you're already renting it may be a bit easier bc you'll have receipt of constant payment. Always look for other first time homebuyer programs thru a lender bc in my opinion it's the same thing less hassle of someone keeping a track of your accounts and what you're spending. NACA will require you to justify purchases. So research other programs and time limits and then decide.
New to Real Estate · Maplewood, NJ · Member since 2018 · 3 posts · 2 votes
8y
@Rodney Harris
Congratulations Rodney!
I’m currently debating both programs myself. I am looking to get into a fourplex in the next 6-9 months. Would you mind sharing details on how long the process was with FHA?
@Rodney Harris
Congratulations Rodney!
I’m currently debating both programs myself. I am looking to get into a fourplex in the next 6-9 months. Would you mind sharing details on how long the process was with FHA?
I went FHA and I had a really good local mortgage broker. Closed in 3 weeks. The appraisal was about a week. Everything went smooth! FHA is pretty standardized in what they do so as long as you have your finances in order and the property isn't terrible (structurally) you will be fine. I had to put a cover on an HVAC and have a specialist come out for me to put it back on. That was a 1 day thing.
Other than that. Make sure you have good credit and down payment x2 so if the down payment is $9000 you need want to have another $9000 so $18k total Just to be safe. This is what I follow and I know everyone wont go this smooth! Hope this helps man! Good luck!