What is the NACA home purchase program? How can I benefit from the program? What are the pros and cons of the NACA home purchase program? What are the requirements for the NACA home purchase program? If all these are your questions, read this article to find your answers.
What is the NACA Home Purchase Program?
The NACA Home Purchase Program is a lively program that easily connects low- and average-income borrowers to affordable home loans. Another thing included in this program is housing education.
In simple words, it is an important program that properly educates buyers on the importance of home purchases and even provides affordable financing. NACA stands for the Neighborhood Assistance Corporation of America. This is quite important for first-time buyers, who could use the knowledge to their huge advantage.
What is included in the NACA Home Purchase Program?
In addition to facilitating affordable finances, the NACA program covers a variety of topics in its discussions. It will cover: what the NACA program is, the steps to getting started in the NACA program, and the eligibility requirements.
Who Can the NACA Home Purchase Program Help?
NACA was built for people who had really bad credit and limited assets. It would help them greatly with all the necessary information they would need moving forward.
In addition, the NACA program is a non-profit advocacy organization that helps homebuyers who face difficulties with initial capital when buying a home. Above all, NACA also offers affordable and compelling loans to people with below-market interest rates.
Benefits Of the NACA Homebuying Program
The NACA program comes with its own set of benefits that suit the individuals they work with. Here are some of the best benefits that the NACA home-buying program has to offer:
- There are no closing costs.
- There are also no deposits required.
- They offer loans at below-market interest rates.
- There is no private mortgage insurance (PMI).
- There is also no credit score minimum.
- It has no fees.
- There is also a 15- or 30-year fixed rate option.
What Are the Requirements Needed for The NACA Credit?
When it comes down to NACA, they don’t necessarily rely on credit scores. What happens instead is that the program thoroughly examines your payment history over the past 12 months. What they are looking out for is whether you have paid your rent and other responsibilities consistently. The following are the requirements that borrowers must meet in order to participate in the NACA program:
Income Limits
The NACA program doesn’t have income restrictions set up for the borrowers. This is because their target audience is low- to moderate-income individuals and communities.
Debt-To-Income Ratio
Everyone should know the rules about their total monthly and future mortgage payments. It states that your total monthly and future mortgage payments shouldn’t exceed 40 to 43 percent of your gross monthly income. That is what the debt-to-income ratio, abbreviated DTI, measures. NACA also limits the borrower’s mortgage payment to 31% of their gross monthly income.
Eligible Property Types
You can easily use the NACA Home Purchase Program to buy a primary residence that is occupied. This means you can purchase single-family homes, mixed-use buildings, condo units, and more. However, you can’t use the program to buy a second home or an investment property. You also can’t use the program if you own other properties.
NACA Membership
When you begin the process of purchasing a home through the NACA program, you must first become a member of NACA. All the membership dues are now $25 annually. However, as a member, you will also have to pledge to volunteer for NACA’s advocacy campaigns in your area.
How Does the NACA Home Purchase Work?
You should be aware that obtaining a NACA mortgage to purchase a home differs from other types of home loans. Here are the steps to take to purchase a house with NACA:
Attend A Homeownership Workshop
This is the first step you must take before applying for a mortgage through NACA. Attending a workshop provides quality information about owning a home. It also carefully explains how the NACA program works in detail. If you want to join a workshop, you have to visit here. You can’t also attend a virtual workshop if you can make it to a physical one.
Meet A Housing Counselor
Another requirement that needs to be met before you can purchase a house through the NACA program is to meet a housing counselor. The counselor you meet with will assess your income and current debts to determine whether you are financially prepared to purchase a home. If you aren’t qualified, the counselor will give you instructions on how you can be qualified for NACA.
Become NACA-Qualified.
Following your counselor’s instructions, you should be headed towards being NACA-qualified. Once you are, you will need to attend a home purchase workshop to learn in-depth about the purchase of a home.
You will also be assigned a real estate agent who will work with you to find a house within your budget. Do note that a NACA qualification lasts for 6 months.
Request For a Qualification Letter
If you succeed in getting a house, you should contact your housing counselor to request a qualification. The letter proves that you’re qualified to buy a home.
Get A Home Inspection
A NACA-approved home inspector and pest control company will visit your purchased property. This is because those that NACA finances must always be in good condition. Also, any issues with the house will be fixed before closing.
Meet With Your Mortgage Consultant
The next step would be meeting a NACA-approved mortgage lender to finalize the home loan application process. Your mortgage consultant will confirm that you’re still NACA-qualified.
They will also check your income, debt load, employment, and credit history. This is to ensure your records are still positive. Then, the lender begins processing your loan before a scheduled closing date.
You Can Always Post Purchase Assistance
You can always participate in the NACA’s Membership Assistance Program, also known as MAP. This is what is known as “post-purchase assistance,” as it also includes an extra homeownership and budgeting guide. These are very vital steps to take in your NACA Home Purchase Program.