Is the NACA program the way to go for a first time buyer?

[Edgar Gonzalez]

Hey everyone, I am new to Real Estate investing. I just recently got in contact with a loan officer to help me find a lender. But this morning as I was driving to work, I was listening to the BiggerPockets podcast episode 590 and the guest mentioned he used the NACA Program to get into his first investment. I was looking into this program a bit and was just wondering if anyone else used this program to get started in real estate investing and also why isn't this program being talked about more? Thanks in advance.

[Andrew Garcia]

Hi @Edgar Gonzalez first, welcome to the real estate investing community! I am a mortgage broker so I can help you with this.

There are a few issues with NACA. Specifically for investment properties. The biggest issue is that they require that you live in the property as long as you have a NACA mortgage. So if you ever decide to move out and make it an investment property, you would need to refinance into a conventional, DSCR, net rent, or some other program. By then, rates could be in the 3s or in the 13s. It's a risk that you have to be willing to take. Additionally, they have stricter underwriting guidelines and lower loan limits. If you plan to live in the property until you die and need the assistance, it can be a good program but for your needs, it might not be the one for you.

There are other issues but I wanted to give you some information now. If you want to learn more about the pros and cons or simply compare your lending options, feel free to reach out.