All Forum Posts by: Carley M.

Look into the NACA program. You would be unwise to get a loan with a prepayment penalty. That means you can never refinance. NACA has extra hoops to jump through but there’s no income limits and there’s no closing costs or down payment. Have you considered a 4-Unit quad instead of a duplex? If you have the lifestyle for a 1-2 bedroom apartment, the investment will generate true income. It can pay its own bills, even a management company, pay for its repairs, it’s mortgage, and still have money left over. NACA also lets you count 75% of rental income to determine how much house you can afford - so you can look at a wider range of properties. I closed with NACA on my quad in November 2016. They even gave me a loan for repairs.

Hey Jennifer Ouch - I saw your question about the 4-plex. Yes, I plan on continuing to live here for the long term. I’m tired of moving. Any future property I buy (down payment comes from excess income on the quad) will be managed remotely by me (looking in same neighborhood) or I’m training my adult son to be a superintendent so I can have him live onsite and help me with the day-to-day management. Feel free to message me off-line. 😊

I’ve recently contributed to several threads where NACA was discussed fairly thoroughly as far as pros and cons. It’s a national program. Search the forums for NACA and probably most of your questions have already been answered. There is also a NACA executive that posted too. Hope that helps.

I've posted on several threads regarding my experience with NACA and my suggestions for being successful in the program despite the staff, who are often the obstacles. Feel free to stalk my posts. If you want to know anything specific, let me know. I'm happy to share.

@Eric Weathers - any income you make must (of course) be reported on your income taxes. There are debt ratios and cost of housing has to be under 40% of your income, but they use 75% of the rental income (on a multi-family) and include that as part of your income/earnings when they are doing the calculations.

Aaron L. - they sometimes send emails asking for volunteers, but telling people about NACA, referring people to the program, etc counts as volunteering. No one keeps tabs.

@Lana G. - From my experience, NACA is only concerned with the last 12 months. They make you write letters of explanation, but I haven't had them require past due accounts be negotiated or repaid. Could be that they were small accounts, I don't know. @Tim Trumble would have to answer that for you.

@Aaron L. - I had to go through the same process, but it didn't take as long because there wasn't a lot of explaining or clean-up work for me. Getting to loan submission ISN'T the delay, it is the rehab estimates and the back and forth with the Bank underwriters who request documents from NACA and then wait .... and wait .... because the MC has long since put away your file since he already submitted it to the bank. I have a friend that is 2 weeks from their original closing date (which I tried to tell him was a bogus date, not adjusted for delays) and had to have docs submitted TODAY or his loan would be denied. His MC is on vacation and no one from the office is calling him back. His loan isn't dead. It will have to be resubmitted, but this is another delay. He will be lucky to close in September - which sucks because he has 3 kids (2 entering high school) and they're switching to a new school district with the move.

@Aaron L. - I have excellent credit and a good job. I'm a forensic CPA. The program has no income limits or credit score requirements.

If you move out of the house, NACA requires you to refinance. If you're not able to refinance, how would you be moving? I know that there are some circumstances where you can apply for a waiver of the condition. @Tim Trumble would need to give you more specifics.

@Tim Trumble - I completed NACA and am currently helping 4 of my friends through the process. I have found that the Rehab portion of the loan is what slows down the process by WEEKS. At the time of the home inspection, no one tells the buyer they should have their chosen General Contractor present to prepare a bid for the work identified by the home inspector. Getting a bid done separately can be delayed by over a week while you wait for the home inspection, then the contractor will need 1-2 weeks to prepare the bid, hopefully there's no delays getting the seller to give access, and FINALLY the appraisal has to be done. That takes another 1-2 weeks AFTER WHICH yet ANOTHER appraisal generally has to be done (subject to the repairs) to determine how much loan the buyer will qualify for (110% subject to value). If there's still room for wish list items, that could slow the process down even more with additional bid time, etc. That schedule, even if everything moves along as expected, is SIGNIFICANTLY longer than 28 days to close. My estimate is that needing a rehab loan (and all of the homes I'm working with need it) adds about 3-6 weeks EASILY to the closing date. During that time, no one is updating the sellers or providing a real idea as to the actual timeline of the loan. Everyone keeps moving toward this artificial date that NACA has attached to the file, without adjusting for delays, and there is no management of expectations, which just makes everyone frustrated and generates more negativity toward NACA.

Regarding the process itself, it is not clearly communicated to the buyers by NACA that THEY are responsible for making sure their loan keeps moving - long after the MC has completed their portion and directed their attention to new applicants. None of the people I am working with were advised to review their Lender Conditions from the web access. Relying on the MC to remember to look at your Lender Conditions (on average once a week), results in even further delays.

There is also not sufficient training provided to the MCs and their response of "NO" to everything they are unfamiliar with causes unnecessary frustration because at that point the NACA employees become the obstacle to homeownership. I can't tell you how many times I've had to take a NO to a basic request and DIG to find out the real reason for the denial only to find there was a simple solution that changed it to approval. It shouldn't be a battle but it often is because the only person who cares about the loan closing is the borrower - who are generally uneducated and unequipped to navigate the poorly documented NACA buying process.

I have CLEARLY given this a lot of thought and analysis. I would be more than happy to talk to you offline if you feel that such a discussion would actually be beneficial and could make an impact on the way the process works.

The loan program is amazing. The NACA process needs some work. I'm willing to help make it better if I can.

Tim - There is another thread where the discussion has evolved to the discrimination by realtors/sellers against NACA borrowers because of the reputation NACA has. I'd really like your input. How is NACA addressing this discrimination? Is NACA aware that the approval letters are causing more uncertainty and raising questions about the borrower's fitness? Clearly that wasn't the intention, but that's how it is being perceived by the sellers.