Wednesday, May 7, 2014

What is the NACA program?

I recently became a qualified Realtor for a home ownership program called NACA, which stands for the Neighborhood Assistance Corporation of America. I am pretty passionate about this program because I personally know how difficult it can be to qualify for a mortgage these days and this program, while not easy and not "free money," places home ownership in the grasp of many who might otherwise not be able to have it.
I thought I would give a few points of the program!
1) NACA is not a "low-income" program, a grant, a subprime mortgage program, or an entitlement program. It is actually quite the contrary.
2) NACA doesn't look at your credit score, but rather your most recent two year credit history. If you have been through a financial hardship, such as a divorce, four years ago and your credit score has suffered because of it, but you have positive payment history in the last two years, this would be a great program for you.
3) Since this program qualifies people for homes they can afford based on budgets and bank statements, a down payment from the buyer is not required to show seriousness of paying your mortgage. The two banks used for their mortgages are Bank of America and Citibank. The rate of foreclosure in this program is less than 2%, so banks are more than willing to lend to those who show responsible borrowing. The bank pays for your down payment and closing costs. The only amount the buyer is responsible for are prepaid amounts, like home owner insurance and taxes.
4) There are no income restrictions or maximums to be a NACA member. However, the maximum NACA will qualify any member for on a home is $235,000.
5) The current interest rate for a NACA mortgage is 3.45%, for any member who completes the program and is approved. ANY member. While a down payment isn't required, a member can buy down their interest rate. Every 4% you pay at closing gets you 1% off your interest rate. So, on a $100,000, if you put down 4%, your interest rate would go from 3.45% to 2.45%. The difference in monthly payments would be $50 a month for the entire life of the loan. On a $200,000 loan, the difference in monthly payments is $100 a month. If you put down 8%, your interest would go down 2%. Yep, you heard that right. And it's not a catch.
6) Approval is based solely on the buyer's willingness to show fiscal responsibility. If you are someone with great credit history and steady income, you could be closing on a house within 60 days with no down payment or closing costs. It's as simple as that. If you have a little bit to go to get there, they will work with you to see that you will get approved and put you on a plan.
7) Membership dues are $20 each year until you close on a home, plus the $10 cost of your credit report. If you close on a house this year, you will not pay any more membership dues.
If you are interested in getting started, let me know. I would love to help anyone would is ready to buy a home, but perhaps would have trouble coming up with the 3.5% for an FHA loan or 5% on a conventional loan. This is also great for people who would like to sell their house and buy a new home, but simply can't lose a lot on the sale of their home, plus pay a down payment and closing costs for a new home.

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