Below is a brief timeline of my NACA journey along with additional details. My starting point was a BK7, student loans in IBR with a $0 payment, and buying a foreclosed house in 68 days. I am hoping my timeline can help others in a similar situation.
October- Went to NACA workshop.
11/10/17 – First intake apt. Only items on action plan were a letter stating why I filed BK7 and a printout of my voter’s registration. Had this back to my MC within a few hours.
11/13/17 – Mortgage Counselor submitted file to underwriting
11/16/17 – Underwriting approved and was able to get in the Purchase Workshop that evening. I got the call at 3pm that it was approved and the class started at 6pm. I made the 2 hour trip to get in the same day. I brought in a MLS of a house I had my eye on for a while. The people were selling it a few months prior but it was now a foreclosure. After the workshop my MC gave me a printout of 3 separate property specific letters to take with me, each with a different offer I planned on asking for.
11/17/17 – Looked at the house and made initial offer. Listing was for $94,700. Offered $84K since it was a foreclosure (tried getting a deal). Went back and forth with a few counter offers and this part took longer due to the holidays and settled on $90,700 with the seller (Freddie Mac) paying 3% toward the interest rate buy-down.
11/27/17 – MC emailed me a new property specific letter with the new $90,700 and 3% details. Gave the letter to the real estate agent and I then signed the P&S contract and gave $500 escrow check. As soon as I got home I called the home and termite inspector that I had been looking into. I had been looking around for home inspectors prior and finally found one who was already NACA approved. He was over an hour away but agreed to do the inspection. Also set up a termite inspection for the same time as the home inspector.
11/29/17 – Home inspector and termite inspectors came and then I emailed the P&S contract to my MC with the seller’s signatures as well as the termite report. There were a few addendums that needed to be addressed such as a Radon report and sellers initials on a couple pages. This was done back and forth via email between myself and the realtor. Because of this it took a few days.
12/5/17 – Submitted Bank Application. Interest rate was 3.625% so with the 3% buy down I am locked in at 2.875%. Secured homeowners insurance later that day.
12/6/17 – Hand Cleared. There were two minor issues that I was able to send a letter back to HAND that stated “waive” on them.
12/22/17 – Finally got the appraisal back and it came in at over $124K so we go into this house with over $30K worth of equity. Waiting on the title now. I now know why my initial $82K offer was rejected.
12/28/17 – Title finally came back. Since it was a foreclosure it took them a bit longer to verify all the information.
1/7/18 – Status UW Approved
1/9/18 – UW CTC
1/10/18 – CTC-Final. Received my closing disclosure and to my surprise I was getting $500 back at closing. My initial cash to bring at closing was $1400 which depended on home insurance and taxes. Closing set for 1/16/18 (MLK day 1/15).
1/16/18 – Closed on house. Took all of 20 minutes to sign the papers.
The total amount out of my pocket was $500. That was $400 for the home inspection and $100 for termite inspection.
Here is a little background as my situation is probably different that a lot of people. I had several things working against me to begin with but I was determined to get me and my boys into a house. This may be long but I want to help as many people as I can. I filed BK7 in July of 2015 due to me filing divorce from my wife. I have full custody of my 4 boys and it has been just me and them since 2009 since she picked other things over her family. My BK7 was discharged 11/10/15. I already had a plan to buy a house in 2 years and I had my eyes set on a FHA loan at the time. To do this I made sure I got my credit score up. While trying to get my credit score up I went to Myfico site and was researching mortgage loans when I saw a NACA thread. This was about a year after my discharge. I read the posts and contacted TTrumble and asked him a few questions. We exchanged a few emails about the NACA program and he pointed me in the right direction. From that point on I researched everything I could find on NACA.
20 months after my BK7 was discharged my credit scores between the 3 bureaus were 701, 714 and 725 with perfect payment history and over $50K worth of Credit Cards that I paid if full when I used them except keeping a small balance on only one of them. I also have $63K in student loans on an IBR plan at $0 a month. My income in a bit over $40K and rent was $500 a month. No car payments as I paid in cash with an Income Tax refund in 2016. This is what I went into the NACA process with.
I waited until about a month before my BK7 would be discharged to attend the purchase workshop. At the purchase workshop I found out that when paying in full on my credit cards that counted as payment shock. I was already saving an additional $300 a month starting 6 months prior but this was a bonus. At the purchase workshop they set me up with an appointment a week away at the local office. I lived over 2 hours away (I’m in Illinois and the office is in St Louis) so I told them I like to do all of this over the phone. Because of that my initial intake was set for 11/2 which was fine as it was close to my 2 year discharge day. The funny thing is at my phone intake the mortgage counselor could not process my check payment over the phone. There was an issue with the routing number. They set my next appointment up for the following week which was 11/7/. 11/7 came and still there was the same issue with my routing number. I immediately called the St. Louis office to see when the soonest I could go in to do my initial appointment and they had an opening for 11/10. This ended up being perfect as that was exactly 2 years since my BK7 was discharged. I felt things were lining up for me and it ended up being the best thing that happened for my situation.
At my initial NACA intake I had everything that they asked for except for my letter that stated why I filed BK7. I had all my papers separated and sticky noted. From Tax returns to every tax transcript that I could get from the past 2 years. Even if I did not know if I needed to bring something in I still brought it. This sped up the process quite a bit as well as having perfect credit since my BK7. I also had a letter from my student loan lender (Fedloan) stating how much my payments would be if I were on the extended fixed plan. Since NACA cannot use a $0 payment this was something I already researched.
Everything after the intake was done over the computer except for the purchase workshop, and closing. I used a non NACA realtor who was the realtor for both me and the seller. There were no NACA approved home inspectors around and none of the ones I contacted wanted to become one. Luckily the guy I contacted from the NACA list agreed to come down over an hour away. He worked with NACA one other time and did not have any issue doing it again.
A lot of people complain that the NACA program is too slow and the time it takes. Going though it I know why it takes longer but luckily I was prepared well in advance. For instance if you filed BK7 and you had perfect payments for 20 months and then month 21 you had a 30 day late, guess what, the clock starts over. It is up to the individual how motivated they are in my opinion.
I was luckily also that I work in an office and have access to a computer, printer, and scanner within arms- reach. As soon as I got an email from my M C I had what they needed back within minutes. A few examples were a LOE of why middle name was on my credit report and a better signature on a scanned document. If it wasn’t for the holidays this would have been done even sooner. So with as much things were against me NACA still got me in a house in days from start to finish very quickly. My payments with home insurance and taxes are right at $652 a month. Another thing I had going for me which was very important was the dedication the St. Louis office Jon and Morio. They were on top of everything and I never had to resend any documents as they had everything put in the first time. When I was in the closing stages I only communicated with my closing counselor via email maybe 2 or 3 times. Both John and Morio made sure everything was getting put in and communicated until the very end. I cannot thank then enough.
Any questions feel free to ask.