@bbb925 wrote:
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.
You shouldn't be putting earnest money down before you are NACA Qualified. I paid my earnest money (was $10,000) with the contract, paid from the savings account where I was keeping the funds needed to close / payment shock money. The earnest money continued to count toward my available funds and came back to me at closing, as I said I used it to buy down the rate.
There really are no closing costs., I wondered because as my bank application was processed I kept geeting GFEs showing costs, but at closing all except the prepaid taxes and insurance, and the inspection fees, were marked "lender paid". There is also no PMI, I pay $50.00 monthly to tne Neighborhood Stabilization Fund and will for 10 years, that compares to over $250.00 monthly I would have had to pay for FHA.
HAND reviews all inspection reports. For my new construction I used a NACA approved inspector who sent his report electronically to HAND. There was a list of items and a reinspection required, but turnaround was rapid and everything was very professional. You won't be involved in having HAND manage your construction the way they would a rehab.
You will work with your counselor to maintain qualification during construction. For me it meant providing the monthly statements I had been providing during qualification when asked and wasn't a big deal. But in fact, as I see Tim Trimble replied, once you're under contract and start the bank application phase,things move in parallel. Your final appraisal and inspection are done as soon as the home is complete and the Certificate of Occupancy has been issued.
If you are organized, patient, and do exactly as your counselor asks you will do well. NACA is understaffed and overworked, and there is a priority helping folks threatened with foreclosure (the HomeSave program) but for me it was absolutely worth the effort. Go to your workshop March 2 and work with your counselor and everything willwork out for you.
