NACA Mortgage

[Elisha Keller]

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

[J Scott]

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).