NACA Home As 1st Rental Property?

Question

Before discovering the idea of REI, I purchased a home in unincorporated McDonough for $176K @ 2.5%. The loan was acquired through a mortgage program named NACA. The loan prohibits using the property as a rental, so I'm considering refinancing the loan and using it as my first rental, and using my cash reserves (I'm currently paying down debt and plan to save around $25K) to purchase another investment property as owner occupied, rehab it (sweat equity), and then put it up for rent as well.

Is this crazy?

Thanks.

Is this crazy?

Thanks.

Didier Bizimungu · Answer

That's what I did. Just refinance into a standard loan after a year or force equity and you're free to turn it into a rental after you move out.

Regina Love · Answer

I don't think its a bad idea, but I would weigh out my options to play it as safely as possible. Will you be paying off the Naca lien in order to move out and use the home as a rental property?

Im actually currently researching this same subject and Im trying to figure out what the best plan of action would be. Have you figured anything out yet? Especially pertaining to Nacas life of the mortgage occupancy requirements . . .

Leanna Green · Answer

The benefit of NACA is that you are allowed to buy down your mortgage interest to basically 0%.

Leanna Green · Answer

It is not crazy... but if you are using NACA (I know of this program), why not purchased a 4 family home and live in one unit and rent the other 3 units out. NACA DOES allow you to use the property as a rental, but NACA DOES NOT allow you to move out of the property without getting another loan (I think you must plan to stay in the property for a number of years).

Edwin Ballard Jr · Answer

I don't think that's crazy.