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New Member
Posts: 4
Registered: ‎06-20-2012
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Re: The Official NACA mortgage thread

Hello all,

I’m new to the myfico forums, but I've been reading this NACA thread for a few days -- man that's a lot of pages!  Here's my status so far:

 

I attended workshop on 5/19, intake appointment on 6/8,  I went in to volunteer at my local office on 6/18 and was able to ask some questions and update info at that time.  I’m hoping to be submitted to underwriting this Monday the 25th.

 

I wondered if anyone had any information on the new construction process.  I’m sure it’s different than buying a resale.  From what I know, I’ll be submitted for underwriting and hopefully become Naca Approved.  I’ll attend the purchase workshop.  At the workshop I will receive the qualification letter with my Max PITI.  From there I can price out my new home and negotiate the terms with my NACA realtor and hopefully go into contract at that time.


That’s all I’ve got — what happens after that?  Do I just wait and twiddle my thumbs while the house is being built?  Do I close on the loan in that time?  I was told by the builder that it will take 4 months to build, so that’s longer than I can stay NACA approved, so will I have to get re-approved? 

 

Any help you can provide would be wonderful.  Thank you all!

Valued Contributor
Posts: 1,063
Registered: ‎05-26-2010
0

Re: The Official NACA mortgage thread

I went through purchase of new construction.  I was NACA Approved in December, went to contract in January and closed in April (property was being built on "spec").

 

You're right, your approval seems to be good for 30 days.  You'll need to be ready to update paystubs and bank statements monthly, and keep up any payment shock savings.

 

In a purchase of a resale home, NACA would inspect the home before approving the contract.  For new construction you won't do the home inspection until completion.  The process was smooth with the inspector uploading the report to HAND and a two or three day turnaround.  There's some different paperwork for termite protection, and if there's a Homeowners or Condo Assciation some details needed.

 

The challenges seemed to come from the fact NACA doesn't do many new construction financings so the personnel aren't as practiced in what to inspect.  In my case my Mortgage Counselor had to hand off to another counselor in another office for the mortgage process (licensing issues) which made it a bit more difficult.

 

You'll see several phases.  First completing the mortgage application which includes completing the contract review and an initial appraisal.  Then underwriting by the lender (mine was CitiMortgage).  Third, getting ready to close which involves a title company chosen by NACA, NACA Underwriting, Lender and with the Mortgage Counselor juggling those three parties.

 

Stay patient, be ready to resubmi things again and again, and you'll get into your new home at a great rate with no closing costs.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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Established Member
Posts: 21
Registered: ‎01-29-2009
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Re: The Official NACA mortgage thread

Good morning. 

 

That’s all I’ve got — what happens after that?  Do I just wait and twiddle my thumbs while the house is being built?  Do I close on the loan in that time?  I was told by the builder that it will take 4 months to build, so that’s longer than I can stay NACA approved, so will I have to get re-approved? 

 

Basically, once you put a contract on new construction, you will go through the Bank App process.  Once you get through the bank app process and you have a ratified contract, you pretty much twiddle your thumbs with the exception of updating your checkstubs, bank statements and cancelled rent checks.  Although it takes 4 months to build, possibly longer, once you sign your contract, you will not have to get re-approved.  You will only need to get re-approved if you cannot find a home within 3 months after your initial approval.

 

Good luck.

New Member
Posts: 4
Registered: ‎06-20-2012
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Re: The Official NACA mortgage thread

Thanks to both of you for the great informtion.  I was concerned about having to get re-approved after waiting for the house to be built.  My wife starts a field placement in August and she will only be able to work 4 days a week instead of 5, so we will potentially be losing some income (although we will supplement with student loans, I don't think they'll let us count this as income).  Our current DTI is sitting pretty at 30%, so losing the $3-400 of income won't hurt too bad. 

 

So after the contract is signed, we then go to bank app -- the bank we'll be using in St. Louis is Citibank.  Hearing that we won't need to be re-approved makes me breath a sigh of relief though.  I could see that throwing a wrench into our process. 

New Member
Posts: 6
Registered: ‎05-04-2012
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Re: The Official NACA mortgage thread

Does anyone know how long you have to be clean on your utility bills.  For some reason I always manage to pay something late (probably b/c I know it doesn't effect my score).  Not defending my lazy ways, but explaining.  I actually have a good/fair credit score, so I wasn't sure if the process varied by score or not.  My most recent late was my electric bill last month (in this case, I thought it was on auto pay but it wasn't).  Everything else is good (phone, cable, cell) etc.

Member
Posts: 14
Registered: ‎05-31-2012
0

Re: The Official NACA mortgage thread

[ Edited ]
I'm not sure how utility bills really count since they aren't reported to the agencies and I don't think you need to keep providing them like you do the bank statements. So I would just pay it up and use an app or something to keep you up to date. I would hate to have something so trivial hold up your progress. . Does anyone know if the process is different with a short sale? If it takes months, as some do, will you need to be reapproved while you wait for the banks responses if it goes over 3 months.
New Member
Posts: 4
Registered: ‎06-20-2012
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Re: The Official NACA mortgage thread

Is it safe to say that if my new construction builders offer a termite pre-treatment I should go ahead and get it?

Valued Contributor
Posts: 1,063
Registered: ‎05-26-2010
0

Re: The Official NACA mortgage thread

In my area (Baltimore City) it's either a code requirement or something inspectors will flag.  Unless the builder's cost is outrageous pretreatment with the warranty associated is something I would do, and of course you can negotiate the item when going to contract.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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Valued Contributor
Posts: 1,063
Registered: ‎05-26-2010
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Re: The Official NACA mortgage thread

Anything hitting your credit score as a late payment is goig to derail any mortgage, not just NACA.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
Take the FICO Fitness Challenge
New Member
Posts: 6
Registered: ‎05-04-2012
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Re: The Official NACA mortgage thread

Not sure if you were responding to me regarding the utility bills, but no, they do not appear on my credit report. I was under the impression that you had to bring NACA evidence of your payment history for utilities.  Are you all saying that is not true?

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