The Official NACA mortgage thread

[bbb925]

How will NACA work if buying a "to be built" home?  We are looking into new construction homes and know the process to build the home can take 3 months to a year. So if we go to our first Workshop to start the NACA process March 2nd in California should we put down earnest money with the builder on our own and hope NACA

 comes through by the time the house is complete and we can close? Let me also stipulate that we are not building on our own land or anything like that, we are just moving to a new housing community where you pick one of the models and design features you want and lot and they start constructing it. It's not a construction loan. I get you wait until you are approved and pick your home at that point if you are buying used homes but with new construction how does it work? Thank you for any help.

[bbb925]

What happened to all the NACA cheerleaders and users? Has it fizzled out? Is it not popular any longer? I have read up to 170 pages worth of stories and have another 200 to go. So don't know if anything bad has happened as I'm a front to back page reader. I'm afraid I will miss something if I skim and go random..lol! Anyways, I have an appt. set up but was wondering if anyone knows someone that is doing this or has recently completed this process? Would love to get some current feedback. Thank you!

[chasmith]

I'm certainly a believer, I closed on my new home last April.  I pid no closing costs or downpayment, got a rate below 3% on a 30 yr fixed mortgage, and my total payment is less than my previous rent for a brand new, energy efficient home.

This thread may be too cumbersome.  If you search for NACA across the board you'll see some activity. 

[bbb925]

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@chasmith wrote:

I'm certainly a believer, I closed on my new home last April.  I pid no closing costs or downpayment, got a rate below 3% on a 30 yr fixed mortgage, and my total payment is less than my previous rent for a brand new, energy efficient home.

This thread may be too cumbersome.  If you search for NACA across the board you'll see some activity. 

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Chasmith,  I want to purchase a new home too. How did you do that with Naca when you only have the 90 day approval? Did you have to recertify or was your home a spec home and was already built? Any insight would be awesome as you succeeded at buying a new home and that's ultimately what I want to do. Would you mind telling me how it all went down for you?

[JM-AM]

Technically while it may be possible to have a new built, I do not think you would be finished with NACA program in that short period of time.

Most who use NACA, meet with a counselor which is free (last I knew), speak about the program, learn about whats involved, any cost or fees associated with it, requirements, and about how long the overall process takes.

Some have been fortunate enough to be finished with the program sooner then others, but the process isnt a quick they are going to approve you in 30 days. Being realistic, from anything I know about NACA, it will take you approximately 8 months on the quick end to who knows how long.

They do offer excellent rates, no down payments, no closing cost, no PMI, but you will pay I believe $50 a month in addition to your normal payments (not sure how long you pay this).

Unless things have changed since I followed their requirements several years back, your credit scores really do not play a big part of their requirements.

[chasmith]

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@bbb925 wrote:

Chasmith,  I want to purchase a new home too. How did you do that with Naca when you only have the 90 day approval? Did you have to recertify or was your home a spec home and was already built? Any insight would be awesome as you succeeded at buying a new home and that's ultimately what I want to do. Would you mind telling me how it all went down for you?

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I was close to NACA qualification when I found new construction that was just starting.  I would say you shouldn't even be looking for homes until you're qualified, it's just too painful to see things you like when you can't move on them.  You really must not try to go to contract before you're NACA qualified.

So I was qualified in December, went to contract in January and closed in April.  What happens is, you must keep providing bank statements, making payment shock savings and everything you did to qualify until the new home is ready.  The inspection process is a bit different as well because they are much more used to buyers getting the inspection at contract time.  My BK7 had been discharged in November two years earlier so December was the earliest I could get qualified, although I had done all the prep work over many months before.

But credit scores aren't considered, and I was able to put the money I would have had to use for closing into buying the already low rate down some more.

[bbb925]

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@chasmith wrote:

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@bbb925 wrote:

Chasmith,  I want to purchase a new home too. How did you do that with Naca when you only have the 90 day approval? Did you have to recertify or was your home a spec home and was already built? Any insight would be awesome as you succeeded at buying a new home and that's ultimately what I want to do. Would you mind telling me how it all went down for you?

---

I was close to NACA qualification when I found new construction that was just starting.  I would say you shouldn't even be looking for homes until you're qualified, it's just too painful to see things you like when you can't move on them.  You really must not try to go to contract before you're NACA qualified.

So I was qualified in December, went to contract in January and closed in April.  What happens is, you must keep providing bank statements, making payment shock savings and everything you did to qualify until the new home is ready.  The inspection process is a bit different as well because they are much more used to buyers getting the inspection at contract time.  My BK7 had been discharged in November two years earlier so December was the earliest I could get qualified, although I had done all the prep work over many months before.

But credit scores aren't considered, and I was able to put the money I would have had to use for closing into buying the already low rate down some more.

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I looked at model homes to see prices and different areas with tax rates. We found out that they will be releasing a new phase come March, which is too soon for us due to we won't even attend our first workshop until March 2nd, but the house wouldn't be done until August or September. They also mentioned a July phase as well which would be a December or Januray completion. I know I can't do anything until I have a qualification letter in hand but just want to be prepared for what to expect.

$5000 earnest money is expected at time of lot pick out and home plan to start building. I would totally put that down today if I knew NACA would let me and we would be qualified by the completion date but I take it that is not ok to do.

 Once we are NACA qualified, are we allowed to put that money towards the start of building our home instead of keeping it in the reserve fund they want you to have? Will that money be returned to us or applied toward our closing cost or to buy-down the interest rate? That is the part that has me confused.

So once Naca approval letter is in hand, you are telling me that if we just continue to send in pay-stubs and bank statements that will suffice so that in 6 months from qualification and our home is done being built we can close and not have to reapply because everything was kept up to date?

You also stated "The inspection process is a bit different as well because they are much more used to buyers getting the inspection at contract time", what do you mean by that? Is it a hassle due to closing happening months later? Or inspections are crazier with new homes?

 I apologize for being a question freak in advance, I just really appreciate your responses and trust your advice as you have been through the process. Everyone I speak with has only bought used homes or foreclosures, so they can't help me with any answers. I want to prevent using HAND if possible. I heard horror stories about that...lol

Thanks again for your help. It's a breath of fresh air to get answers from someone who has completed the program with a new construction purchase.

[bbb925]

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@JM-AM wrote:

Technically while it may be possible to have a new built, I do not think you would be finished with NACA program in that short period of time.

Most who use NACA, meet with a counselor which is free (last I knew), speak about the program, learn about what's involved, any cost or fees associated with it, requirements, and about how long the overall process takes.

Some have been fortunate enough to be finished with the program sooner then others, but the process isn't a quick they are going to approve you in 30 days. Being realistic, from anything I know about NACA, it will take you approximately 8 months on the quick end to who knows how long.

They do offer excellent rates, no down payments, no closing cost, no PMI, but you will pay I believe $50 a month in addition to your normal payments (not sure how long you pay this).

Unless things have changed since I followed their requirements several years back, your credit scores really do not play a big part of their requirements.

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We would go FHA or conventional if need be as we are not in any hurry but for the facts that you stated, is why we are totally interested in exhausting the NACA route. No money down, no PMI, no closing costs and the number one reason being the interest rate is much lower than any other and we can essentially buy it down to 0% interest I was told. So that alone is AMAZING!!!...lol... I am very detail oriented and organized. I have everything already ready to go that I have read they want from the NACA thread. I don't have anything to explain on my credit, I have printed out every bank statement from each account, credit card statements, explained any amount over $100 withdrawn from the accounts. We have one of our checking accounts set up just for them with $10,000 just for them to see for our reserve. We won't need a payment shock because we pay $ 2000/mth now and plan to either keep it the same or go lower. I have a copy of every utility bill, we have a copy of our voter registration printed out. I have a print out of future payments for deferred school loans.  I mean I have everything including the color of our underwear in this file of course that will change on a daily basis, hope that's not a issue...lol. I know it's not dependent so much on me but the MC to get us through at this point but if I can have everything ready and submitted the day we meet with them and she scans it in right there, I hope we will be ready to move forward in the next few months. I pray it will go smoothly. I can wait as we are only moving about 2 miles away from where we are at. We already sold our old home and are renting this home as we wanted to see about the area. We like it here so we want to buy. It seems house prices are on the rise again and I want to get in before it's too late.

Thanks for the feedback! Everyone is so smart here and helpful, I love it!

[bbb925]

Just found out in California you can buy down the interest rate to 0.0625%...That is practically nothing! Love it. I thought we could buy to 0% but apparently not. Just in case anyone wanted this info I thought I should state the facts!

[chasmith]

The buydown to .0625% is national not just CA.