NACA?

[chasmith]

It's best to have a separate savings account where the only activity is saving your payment shock amounts.  In my case I had a savings account which held my funds available to close, for reserves, etc.  I made the payment shock savings by direct deposit to that account.  Open the account now and start the payment shock savings.  Don't make any withdrawals from that account.  That will give you a head start, as I think you'll probably need to show six months.  Also, don't make any new credit applications that generate inquiries.

My credit was pulled for my initial meeting, there's a time limit the credit pull is good for (I don't remember whether 30 days or longer).  A current (not expired) credit pull is needed to movbe forward to NACA underwriting.  Then the lender made two pulls.  But since NACA isn't score driven, and you shouldn't be applying for credit elsewhere (see my comment above), those pulls aren't devastating. 

Earnest money gets applied at closing (to inspection, tax escrow, etc.) so you're sort of double counting on that item.  I paid my inspection, lender paid my appraisal.  Remember that while when you start the bank application phase you'll get GFEs showing closing costs.  When I went to closing all the buyer costs were there, just marked "lender paid".

The NACA process can be challenging but putting aside the question of the funds you wind up with, I found it helped me get better habits.

[tbetters]

You sound just like we did.  "Be proactive and not reactive."  It doesn't work.  NACA is garbage, but I hope you have a better experience than me.  Best of luck.

[chasmith]

I saved $18K upfront in downpayment and closing costs (in MD there's a stiff transfer tax and buyers pay on new construction), used 10K of that to buy down the rate, and I'm saving $400 a month over what I would have paid on FHA financing.

Was it time consuming and frustrating at times - yes.  Was it worth it - absolutely!

[JM-AM]

Naca is not for everyone....

But sometimes we have to face reality, credit scores for many are way down. It takes several months for a few quick fixes to improve scores, but majority are a year and sometimes several years to have some improvement in their scores.

Yes NACA is a long drawn out process, and most likely will not close in a 3 month period. But while you are struggling to improve your scores and even if they do not improve, NACA is still doable to obtain a loan if you follow the steps given. Yes they are annoying asking you to update your information monthly, but that is how they monitor your progress. Yes you have to do a little volunteer work, well for what they offer in rates, no down payment, no closing cost, and the option to buy down your rate to almost 0, a little service from participants is well worth it in my opinion.

We all at one time or another run into financial problems, and sometimes these problems set us back for several years. NACA gives you an opportunity to still become a home owner even in your worse predicament. You just have to be patient and tolerant of the lack of communication since they are busy and trying to help thousands at the same time.

I am sorry you had a bad experience with NACA, but once again this program is not for everyone. But the ones that do survive the process NACA puts them through save thousands of dollars compared to any other traditional loan offered.