NACA Mortgage Timeline- From Intake to Keys in 68 Days

[bears85]

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.

[cv91915]

Thank you for posting so much detail and background. I'm sure this post will be helpful to others.

 

Congrats on the house!

[Daddy]

CONGRATULATIONS!!!!!!!!!!

 

That is an AMAZING deal!!!

 

Did your MC mention anything about the 15-year wealth-building mortgage? Did they say anything about trying to buy the rate down to 0.125% or 0.00625%?

 

My wife and I closed with NACA in May, 2015. 0.125%, 15 year. Home cost $214,850. It's now worth $250,000 and we owe $176,000.

 

NACA is the best thing around.

 

Congrats, again!

[bears85]

Yes, our MC gave me all my options. While I did not take advantage of the 15 year option with my monthly payment being what it is I plan on paying extra every month towards the principal. This way if there is ever a period of time where my finances drop, hopefully never, I will be able to still afford a lower mortgage payment.

 

That is awesome that you have that much equity already. I agree on NACA being the best thing around. I heard so many negative things about it but after going though it I feel that NACA puts all the responsibility on you to get qualified. When discussing NACA with a few people they couldn't believe I got a conventinal mortgage with that interest rate 2 years out of BK7. On top of that no closing cost, PMI, or down payment.

 

I just hope my timeline helps others who are on the fence on this program.

[Daddy]

Yes, our MC gave me all my options. While I did not take advantage of the 15 year option with my monthly payment being what it is I plan on paying extra every month towards the principal. This way if there is ever a period of time where my finances drop, hopefully never, I will be able to still afford a lower mortgage payment.

 

That is awesome that you have that much equity already. I agree on NACA being the best thing around. I heard so many negative things about it but after going though it I feel that NACA puts all the responsibility on you to get qualified. When discussing NACA with a few people they couldn't believe I got a conventinal mortgage with that interest rate 2 years out of BK7. On top of that no closing cost, PMI, or down payment.

 

I just hope my timeline helps others who are on the fence on this program.

 

The thing I love about the program is that it is actually designed for the consumer. The default rate is almost non-existent. You do not have to pay BS PMI, which ONLY benefits the banks.

 

I have run into people who are frustrated with NACA. They decide they can't wait the extra month to close with NACA, so they go the traditional route. So they are willing to throw away $50,000 or more because they are impatient. It's just crazy to me.

 

Congrats again on getting such a steal of a deal.

[Amber79]

This sounds amazing! Congratulations!

[tiggerlgh]

I think that is one of the fastest times I have seen and in a sellers market would still be too long if they wanted a quick close. But if you can make it work it’s a great deal.

[seriousbusi]

I have been in the 'counseling' part since November, 17. I have provided all the documentation requested, I turned over everything within hrs. from the first session. On my 2nd session, after I provided all the info re: employment verification they requested by sending me a form that I had never heard of before, and I turned it around within an hour. Next session, they still hadn't gotten it and I made it happen within hours. I have maintained current all CC, Bank and paystub uploads. Every time that I meet with the counselor it is something else that they want which was not mentioned before. The process has been maddening and now it is February. I have no shock, have saved more than $8k since it started. I am afraid to continue because I believe after I am qualified it will be a worse nightmare. Any suggestions?

[Techguy74]

After reading your post, I looked into NACA and scheduled myself for one of their workshops.

 

After signing up, I decided to do a search for reviews of this program, I have only found THREE (3) positive reviews for this program, yours being one of them.

 

I am wondering if I should even bother trying to go through this, after all of the reviews I just read.

 

I also read, if you do end up successfully purchasing a home through the program, they automatically put a lien on your house to make sure you comply with all aspects of the program; is this true?

Edited February 18, 2018 by Techguy74

[bears85]

After reading your post, I looked into NACA and scheduled myself for one of their workshops.

 

After signing up, I decided to do a search for reviews of this program, I have only found THREE (3) positive reviews for this program, yours being one of them.

 

I am wondering if I should even bother trying to go through this, after all of the reviews I just read.

 

I also read, if you do end up successfully purchasing a home through the program, they automatically put a lien on your house to make sure you comply with all aspects of the program; is this true?

The lein is in place to make sure someone does not purchase and then rent out the property. If you go to sell your house there is no lein to pay off. This keeps any investors out of the program as well. I was skepital at first and read the reviews. Here are my thoughts on the program:

• The program is mainly up to the individual on how quickly it can be done. If you have no 30+ day lates on your credit report, have 12 months of positive tradelines on your report and rent, and are able to save for payment shock it will go quicker.
• Be proactive and submit any paperwork or requests as soon as possible.
• If you are in a sellers market this may not be the program for you. The reason is that the closing can take a bit longer than a traditional bank to do as well as some of the NACA conditions such as using their title company.
• It seems that I lucked out and got a really good mortgage counslor and office (St. Louis). My MC and the office manager were very on top of everything. I could email them a question and have a response back within a few hours. Or I can call and get an immediate office. When I got to the closing and was assigned a closing counslor I communicated with him only two or three times. The office manager was the one who was answering all my questions. I do not think this was typical from what I read but that is the way they handled it. I have read reports of people having issues with some offices so I cannot answer for that.

I felt for me it was the best program no matter if I had to wait or jump though any additional hoops. Not having to put down a down payment, having no PMI, and getting a lower interest rate were all worth it to me. My area is a small market so my experience probably would have been different if I was competing for homes to purchase as well. IMO I would go to the workshop just to at least start the process. You can always go a different route if you feel that it is taking longer than you like but at least you would have your foot in the door with NACA,

[bears85]

I have been in the 'counseling' part since November, 17. I have provided all the documentation requested, I turned over everything within hrs. from the first session. On my 2nd session, after I provided all the info re: employment verification they requested by sending me a form that I had never heard of before, and I turned it around within an hour. Next session, they still hadn't gotten it and I made it happen within hours. I have maintained current all CC, Bank and paystub uploads. Every time that I meet with the counselor it is something else that they want which was not mentioned before. The process has been maddening and now it is February. I have no shock, have saved more than $8k since it started. I am afraid to continue because I believe after I am qualified it will be a worse nightmare. Any suggestions?

 

Are you uploading the documents through your webfile? I had issues from the start with the webfile so I instead emailed them to my webfile with the assigned email address and cc'd my mortgage counslor. I would then follow up the next day with my MC to verify it was in my file. I cannot answer for the qualification because I got qualified 3 days after my first intake. After you qualify you will attend the home purchase workshop. I feel it is better if you have a realtor who has been though the NACA process before or who is NACA certified. My real estate agent was not and it was a learning process with her. After the fact she stated she would do it again because it is not that much different other than having specific wording on some paperwork.

 

I would follow up with your MC to see where you stand in the process. If you are not getting results talk to the office manager.

[Techguy74]

I do have a 30 day late/charge-off on my report dated 5 years ago. As I understand it, the program does not want any late payments less than one year old; is that correct??

 

I am going to attend a workshop this upcoming Sunday - I will try this process and see where it takes me. Right now my median mortgage score is 632

Edited February 20, 2018 by Techguy74

[bears85]

I do have a 30 day late/charge-off on my report dated 5 years ago. As I understand it, the program does not want any late payments less than one year old; is that correct??

 

I am going to attend a workshop this upcoming Sunday - I will try this process and see where it takes me. Right now my median mortgage score is 632

Correct, they go by the last 12 months unless you have a bankruptcy in which case it is the last 24 months.

 

They do not factor in your mortgage or credit score at all. They will tell you what it is but it is not used anywhere in the process.

[Fergie73]

Can anyone tell me the income requirements of this program? I went to a workshop over a year ago and I do not remember. My fiance worked as a w2 bathroom installer last year and previously a freelance contractor for many years before than and now does plumbing work on a commission bases. He just started the commission job in February and was wondering if this would be an option for us now or if we would have to wait until next year to do this program?

[Techguy74]

There are no income requirements per-se. they look at your overall debt and income to tell you what you could qualify for.

 

They do not provide the mortgage, that is provided by the two lenders they work with, Citi and Bank of America.

 

Now one of the things you have to stay on top of is Minimum Required Funds in your bank account(s) and payment shock.

 

Payment Shock is the minimum savings you have to show month over month to cover the difference between your current rent payments and your potential mortgage. As an example, if your rent is currently $1000 per month and your potential mortgage payment is $1900, you would have to show you are saving 900 dollars per month for 3-6 months.

 

That approach would show you are preparing yourself to pay the $1900 mortgage.

 

There are a lot of other requirements as well, which is why so many people get frustrated about the program.

 

Do a google search for NACA, their website provides all of the details.

[citygirl8]

Can anyone tell me the income requirements of this program?

The details are on their website. There is no minimum income requirement. You or the house you buy have to meet one of three requirements, though:

• Your income is less than 80% of your area's median income
• The house you are buying is in a census tract where the median income is less than 80% of your area's median income
• The house costs less than a max amount NACA has set

In my city with very high median home prices and a very low max amount--outside of the few qualifying census tracts, the NACA home price limit is about half of the FHA loan limit for this area--it's really unlikely that anyone could meet the requirements. Only about 10% of the census tracts meet their criteria. Some of them are so far out from downtown, you might as well not pay the premium for a city address, and in many you'd still need to make about 150% of median income to afford most 3-bedroom homes. And if you don't make that kind of money, there's little you can afford at all, no matter where it is in the city.

 

Getting rid of PMI is a huge monthly savings and being able to use money you've set aside for closing costs to buy down the interest rate is also a big deal, so it could be a great deal--if I ever found something that met the requirements. They also don't really work in this area, so it would be a big investment to travel to get qualified. Unfortunately, because they work so slowly, you have to get qualified first. But if they have an office near you, you're in a market that will tolerate a slow closing, and they have realistic criteria for your city, it can be a great deal.

Edited April 7, 2018 by citygirl8

[bayareagirl]

I purchased a 4 plex fixer upper in 2003. In this program you are able to by a single family up to a 4 Plex. When you qualify they will give you information on how much you can afford in each instance. 70% of the current rents on a multi unit can be applied to help the buyer's income to help them qualify.It was a a very long and tearful process between the rehab appraisals needed and meeting all of the city regulations. The seller extended our contract twice. But, the wait was well worth it. NACA program did not require perfect credit. I wrote a a brief statement that my late payments were due to my mother being ill and I needed to help her pay bills or she would lose the family house. All on the loans were funded with BofA at the time at 1% lower than the posted rate at BofA. There is a fund that everyone pays into, its a monthly fee added to your mortgage. Mine was $50.00. The fee now correlates with the amount of your mortgage. But, you can apply and tap into this fund if you have difficulties paying your mortgage. I can be used twice during the life of the loan. All rehab work must be completed by a licensed contractor. Also, the realtor that assists in the sale must be NACA approved as well. This is another way of saying they agree to give a percentage of their fee to NACA. This was a great program for me! I recently discharged ch13, and I still own my building!

[mendelssohn]

After reading your post, I looked into NACA and scheduled myself for one of their workshops.

 

After signing up, I decided to do a search for reviews of this program, I have only found THREE (3) positive reviews for this program, yours being one of them.

 

I am wondering if I should even bother trying to go through this, after all of the reviews I just read.

 

I also read, if you do end up successfully purchasing a home through the program, they automatically put a lien on your house to make sure you comply with all aspects of the program; is this true?

 

That's probably because they are known for taking forever to close. There are many real estate agents out there who will advise their clients against accepting an offer with NACA financing for this reason.

[Daddy]

TechGuy, did you count me as a positive review?

 

If you look around, you will see far more than 3 positive reviews.

[Daddy]

Closed in May 2015. 15 year mortgage, 0.125% rate. $11,800 buy down ($7500 from builder, $4300 from me). $0 down payment. $0 closing costs. $0 PMI.

 

$214,850 original balance. $173,500 current balance.

 

Whatever it takes, finish the process.

[oncredit]

Closed in May 2015. 15 year mortgage, 0.125% rate. $11,800 buy down ($7500 from builder, $4300 from me). $0 down payment. $0 closing costs. $0 PMI.

 

$214,850 original balance. $173,500 current balance.

 

Whatever it takes, finish the process.

Blessed Jesus!! Those figures are awesome! I am praying I can do the same!

[Daddy]

 

Closed in May 2015. 15 year mortgage, 0.125% rate. $11,800 buy down ($7500 from builder, $4300 from me). $0 down payment. $0 closing costs. $0 PMI.

 

$214,850 original balance. $173,500 current balance.

 

Whatever it takes, finish the process.

Blessed Jesus!! Those figures are awesome! I am praying I can do the same!

 

 

It's a lot harder now because rates are higher and homes are much higher. However, it is still very possible. Ask any questions you think of and we will help you out.

[oncredit]

 

 

Closed in May 2015. 15 year mortgage, 0.125% rate. $11,800 buy down ($7500 from builder, $4300 from me). $0 down payment. $0 closing costs. $0 PMI.

 

$214,850 original balance. $173,500 current balance.

 

Whatever it takes, finish the process.

Blessed Jesus!! Those figures are awesome! I am praying I can do the same!

 

 

It's a lot harder now because rates are higher and homes are much higher. However, it is still very possible. Ask any questions you think of and we will help you out.

 

 

Do you mind stating who your builder was. If you don't want to mention the builder, please send me a private message. I am seeking the exact same deal you have. I want to buy down the rate as low as possible for a 15 year loan. A contribution from builder would be awesome!!!

[paperchase10]

We tried NACA her in Atlanta and it was complete joke. We did the orientation then about a month later met with a counselor who uploaded our paperwork gave us instructions for the next meeting.

We get a email saying our second meeting has to be rescheduled and the first counselor is no longer employed. They were suppose to follow up with us to reschedule never heard from them this was about a year ago.

[mendelssohn]

We tried NACA her in Atlanta and it was complete joke. We did the orientation then about a month later met with a counselor who uploaded our paperwork gave us instructions for the next meeting.

We get a email saying our second meeting has to be rescheduled and the first counselor is no longer employed. They were suppose to follow up with us to reschedule never heard from them this was about a year ago.

 

The terms can be great if you can close a mortgage, but they are known for being extremely slow to the point where your offer on a home is weaker if you state that you are using NACA financing.