Questions about who to get the loan from

[Mickael Castillo]

OK so just to start off, I have had several set back when it come to money raising process to purchase a home (I'm still renting). I hear about two options when it comes to who to get a loan from if I get approved. One is naca, I have been to their seminar about two years ago and it's always been interesting to me but never acted upon. Two is divvy, my wife's choice of who to go through for home buying. Realistically I want a multifamily to start and grow with but as everyone know it's pretty scarce out there. I would appreciate if anyone has ever used any of the two and if the can give me some insights on them. I really am thankful and looking forward to your responses.

[Andrew Garcia]

Hi @Mickael Castillo, you have a few options.

NACA is a great program but has some drawbacks that you should be aware of, 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.

I would recommend against Divvy. The issue with Divvy is that rent-to-own is not as favorable to the consumer as you would think. If you cannot actually buy the house, you just gave them tens of thousands of dollars more in rent payments.

There are also options that you have that you might not be aware of.

1. You can get a gift from someone else for the down payment.

2. If you are a veteran, you can use the VA loan with 0% down.

3. If you are looking in a rural area, you can use the USDA loan with 0% down.

Hope this helps! Let me know if I can be of any assistance.