Here in southern California one of our biggest obstacles to home ownership is the lack of the standard 20% downpayment. What if there was a way to buy a home with NO DOWN PAYMENT? Well, there is!
Last year I wrote a blog post about a little-known program called the NACA Mortgage (Neighborhood Assistance Corp of America). NACA is a non-profit, HUD certified homeownership and advocacy organization whose goal is to help people get and keep homes, and build strong and healthy neighborhoods.
You may have heard about them a few years ago during the foreclosure crisis. NACA sent teams of counselors criss-crossing the United States on "Save The Dream" tours. The teams would set up shop for 2 to 3 days in major cities, usually in a convention hall, and offer counseling and intervention services that helped thousands of homeowners through the complexities of modifying their mortgages and saving their homes from foreclosure.
Now NACA has another idea: A mortgage designed for low and moderate income people (though interestingly enough there are no income restrictions!) to achieve home-ownership with ZERO money down (100% LTV), an interest rate 1% below FHA, NO closing costs, NO points or fees, NO private mortgage insurance, NO minimum credit scores, NO pre-payment penalties, AND the opportunity for REHAB funds to fix the property up after close of escrow.
"DO I HAVE YOUR ATTENTION NOW?"
It's called the NACA Mortgage - they say it's the best purchase product in America! Here is what their website says: "The NACA homeownership program is our answer to the huge subprime and predatory lending industry. When working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers."
FEATURES OF THE LOAN:
* No Down Payment
* No Closing Costs
* No Fees
* No Prepayment Penalty
* No Minimum Credit Score
* Maximum Sales Price in southern California is $400,000
So, is the process of qualifying difficult?
This loan is different from a tradtional bank loans, and it will take a longer period of time usually. To get the ball rolling, buyers MUST attend a 4-hour NACA workshop, AND become a member of NACA. The workshops full up months in advance, but if the buyer can travel some distance, they will be able to attend a workshop soon. They then will be assigned a one-on-one Mortgage Consultant who will guide them through the qualification process. If the buyer happens to have "loose ends", like unpaid medical bills or past-due taxes, their Consultant will guide them through the Credit Resolution process of cleaning up anything needing attention - No matter how long it takes! Many other steps are involved to assure the buyer's success, and the NACA program has checks and balances all along the way. There is also the added bonus of obtaining "Rehab" funds, built into the 15 year or 20 year loan, to be utilized after the close of escrow to bring the house up to standard.
INTEREST RATE BUY-DOWN!
YOU CAN BUY DOWN YOUR RATE TO ZERO PERCENT!
If the buyer happens to have the cash on hand to "buy-down" their interest rate, here is how that works. The interest rate on the NACA loan is automatically 1% below the prime market rate. So, as of today, the rate for a NACA loan would be 3.50%. FOR EVERY 1% THE BUYER CONTRIBUTES, THEY CAN SAVE .25% ON THEIR INTEREST RATE. For example, for a $400,000 home purchase, 1% equals $4000. If the buyer contributes $4000, their rate will be reduced to 3.25%. If the buyer contributes 4% ($16,000) they can buy their rate down a full percentage point to 2.50%. If the buyer contributes just 14% ($56,000), the would end up with a ZERO PERCENT INTEREST RATE. Think about how quickly the buyer will build equity with a ZERO PERCENT mortgage!
HOW TO GET A NACA MORTGAGE
#1: First go online to the NACA website
#2: Find a Workshop you can get to and make the reservation online at the site
#3: Compile the necessary paperwork you will need to bring with you - they will give you a list
#4: Expect to dedicate a good deal of time to obtain this loan.
#5: Find a local Real Estate agent you feel comfortable with. If necessary, educate him or her about the NACA program, so they will be equipped to help negotiate your purchase when all signals say GO. It's fairly new and not widely talked about, so your agent might not know about it
#6: Be attentive and prompt to the requests from your Mortgage Counselor.
#7: When you have your approval letter, find a home and have your offer accepted, coordinate the Inspections necessary with your Mortgage Team AND Agent to ensure the home qualifies. Also, this is the time to apply for "REHAB" funds to be added to your loan!
#8: Close on your mortgage, get the keys, and BREAK OUT THE CHAMPAGNE! CONGRATULATIONS!
FOR BUYERS IN THE CONEJO VALLEY & SURROUNDING COMMUNITIES OF: Agoura Hills, Oak Park, Westlake Village, Thousand Oaks, Newbury Park, Simi Valley, Moorpark, Camarillo, Calabasas
KATHY SMILEY WILL HELP YOU ON YOUR PATH TO HOME OWNERSHIP.
If you would like the TLC and guidance of an experienced and trusted Realtor, contact me by email or phone me at 805-497-7804 to set up a confidential appointment. I want YOU to own a home!