NACA vs FHA/MassHousing Loan for first Property

[Steve Shiner]

Hi BP Community, 

I'm trying to determine the best strategy for starting out as a real estate investor. My mortgage options are FHA, NACA or a MassHousing (Fannie Mae in MA) Loan. I want to leverage these loans in order to purchase my first two multi-family properties, househacking each over a two year period. I'm currently going through the NACA pre-approval process and although it is a massive pain in my ***, I know the terms will be worth it (0 money down, 0 closing costs, below market interest rate, and no PMI). The problem is that NACA requires home occupancy for the life of the loan, and it potentially will disqualify my ability to use an FHA or Fannie Mae loan on my second purchase.

That is why I'm considering using an FHA loan on my first purchase, living in the multi-property for one year, and then using a Fannie Mae loan for 5% down to buy my second property. Although the mortgages and PMI would be more than using a NACA.

I would like to use NACA in order to get off on the right foot financially, however I'm not sure it will work out long term. I guess an option would be to refinance the NACA loan when I am ready to buy my second property if I want to use a low money down option. That, or to take my chances with NACA finding out that I moved out of the home. Can anyone shed some light on their experience with NACA and similar situations? Or for you experts, what you believe to be my best option?