$150K in Equity. Can’t get a HELOC
Rental Property Investor · Los Angeles, CA · Member since 2015 · 73 posts · 55 votes
$150K in Equity. Can’t get a HELOC
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Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
7yREFI'ing into a new loan is your only choice that I can think of. Don't think of the higher interest rate,,, etc etc are all minor issues. Think of the lost opportunity if yoiu DON"T refi out that cash and put it into rental properties!!!!
Folks trip over inconsequentials. IE miss the forest for the trees, other analogies too but none come to mind. :)
BUT you do have to be able to afford the new larger loan monthly payments!!! This is a reality. And it would be prudent to be able to comfortably affort the new REFI payment without considering the new income from adding that debt.
Another idea: house hack, by buying another primary residence with a new occupant loan, keep the house with the NACA loan on it as a rental. What's NACA's rules on moving out and renting the house? How are they to stop you? Sounds like you've lived there several years,, might be time to buy another primary and move.
@Jay Hinrichs Jay might have some ideas.
8 Replies
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes7y
REFI'ing into a new loan is your only choice that I can think of. Don't think of the higher interest rate,,, etc etc are all minor issues. Think of the lost opportunity if yoiu DON"T refi out that cash and put it into rental properties!!!!
Folks trip over inconsequentials. IE miss the forest for the trees, other analogies too but none come to mind. :)
BUT you do have to be able to afford the new larger loan monthly payments!!! This is a reality. And it would be prudent to be able to comfortably affort the new REFI payment without considering the new income from adding that debt.
Another idea: house hack, by buying another primary residence with a new occupant loan, keep the house with the NACA loan on it as a rental. What's NACA's rules on moving out and renting the house? How are they to stop you? Sounds like you've lived there several years,, might be time to buy another primary and move.
@Jay Hinrichs Jay might have some ideas.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Curt Smith:
REFI'ing into a new loan is your only choice that I can think of. Don't think of the higher interest rate,,, etc etc are all minor issues. Think of the lost opportunity if yoiu DON"T refi out that cash and put it into rental properties!!!!
Folks trip over inconsequentials. IE miss the forest for the trees, other analogies too but none come to mind. :)
BUT you do have to be able to afford the new larger loan monthly payments!!! This is a reality. And it would be prudent to be able to comfortably affort the new REFI payment without considering the new income from adding that debt.
Another idea: house hack, by buying another primary residence with a new occupant loan, keep the house with the NACA loan on it as a rental. What's NACA's rules on moving out and renting the house? How are they to stop you? Sounds like you've lived there several years,, might be time to buy another primary and move.
@Jay Hinrichs Jay might have some ideas.
Naca loans have a lot of restrictions.. I think one of them is you have to live there for 10 years or else you share equity something like that. Curt you can see she got 2.5% interest which happens with seller buy downs.. that's how I sold some of my properties to naca borrowers.. so she will need to read the fine print of her naca agreements.. the ones I did were in Mississippi and maybe each state is unique. but for those that go through the program Naca is very good deal for the buyer.. no doubt.
- Rental Property Investor · Los Angeles, CA · Member since 2015 · 73 posts · 55 votes7y
@Jay Hinrichs and @Curt Smith Thanks for your input! Yeah apparently your'e supposed to live there for the life of the loan but there are exceptions if I move for another job.. or something similar. Good news is I house-hack since its a fourplex.
It seems I'll just have to see if a refi makes financial sense... Worst case I'll hold and sell it after a few more years (knock on wood for more equity).
- Member since 2025 · 1 post · 0 votes1y
Quote from @Gabrielle Martin:
@Jay Hinrichs and @Curt Smith Thanks for your input! Yeah apparently your'e supposed to live there for the life of the loan but there are exceptions if I move for another job.. or something similar. Good news is I house-hack since its a fourplex.
It seems I'll just have to see if a refi makes financial sense... Worst case I'll hold and sell it after a few more years (knock on wood for more equity).
Hi, NACA owner here. I'm one year in and realizing how stuck I am! It's forcing me into a conventional loan under investment property downpayment amounts & interest rates. What did you end up doing? 😭 also, were you able to change residences yet? How do they expect me to live here for the rest of my life? I thought it was only for 5 years.
- 7yDavid BarnettPro MemberRental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
I'm not familiar with the NACA program, however, we have what appears to be a similar program in Massachusetts that seems to have similar flavors. Is there any sort of subsidy built into the mortgage, or is it just a no-down, low interest rate loan product? The Program in Massachusetts (Soft Second Mortgage) will provide a subsidy if your income is below 80% of the area median income. You can't sell/refinance the property without paying off the subsidy, if one qualifies. In order to get out of it, I had to pay off the subsidy (it was a lien) in order to refinance and take money out of the property. Like others have said, refinance is likely your only option with this special program.
- Rental Property Investor · Los Angeles, CA · Member since 2015 · 73 posts · 55 votes7y
Originally posted by @David Barnett:
I'm not familiar with the NACA program, however, we have what appears to be a similar program in Massachusetts that seems to have similar flavors. Is there any sort of subsidy built into the mortgage, or is it just a no-down, low interest rate loan product? The Program in Massachusetts (Soft Second Mortgage) will provide a subsidy if your income is below 80% of the area median income. You can't sell/refinance the property without paying off the subsidy, if one qualifies. In order to get out of it, I had to pay off the subsidy (it was a lien) in order to refinance and take money out of the property. Like others have said, refinance is likely your only option with this special program.
Thanks for your input... NACA is a no-downpayment/no closing cost program.. Its nationwide. Really great program to get started... I'd even say its worth the limitations....
- Rental Property Investor · Los Angeles, CA · Member since 2015 · 73 posts · 55 votes7y
Originally posted by @Tim Trumble:
Hello all,
NACA places a $25,000 silent-second lien on the property to enforce the owner occupancy requirement. It also prohibits origination of HELOC's unless the funds will be used to repair or improve the property bought with the NACA loan. The restrictions exist to support NACA's mission of neighborhood stabilization. Violating the requirement will cause the lien to be enforced and can potentially even lead to foreclosure.
Tim Trumble
Online Operations, NACA
Thanks @Tim Trumble . Whenever I do choose to sell my property do I need to contact NACA to remove the lein?
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