General and Eligibility
NACA focuses on low-to-moderate income homebuyers called “Priority Members” and low-to-moderate income areas “Priority Areas”. Thus everyone is eligible adhering to the following:
- Priority Members: Homebuyer’s whose income is less than 100% of the median income for the Metropolitan Statistical Area (“MSA”). Priority Members can purchase their home anywhere.
- Non-Priority Members: Homebuyers with income equal to or greater than the median income for an MSA must purchase in a US Census Tract where the median income is less than 100% of the median income for that MSA (“Priority Area”).
In high cost areas the median income threshold may be higher. Each NACA office covers a number of MSA’s, with each one encompassing a large geographic area that allow for many homeownership opportunities. This eligibility criteria allows NACA to focus on those who need NACA the most.
NACA’s eligibility requirements consist of the following:
- No member of the household can have an ownership interest in any other property at the time of closing,
- Occupy the home over the life of the NACA mortgage,
- Participate in five actions and activities a year and at least one prior to NACA Qualification and one prior to closing in achieving NACA’s overall mission of economic justice; and
- Be willing to abide by NACA’s terms of membership, participation, and eligibility.
NACA and its membership are benefiting from the people who have fought and died in the struggle for civil rights and economic justice. NACA continues this struggle through the active participation of its membership. Because of its advocacy and state-of-the-art operations, NACA’s purchase program is even better than it sounds.
The Purchase Program Homebuyer Workshop and basic counseling are free, however NACA membership is required to have access to the NACA mortgage, additional counseling and other services. The current annual membership fee is a nominal $25 per household for as long as the Member is the Purchase Program and has a loan through NACA. There is also a nominal fee for credit report pulls refunded at closing by the lender.
Yes. There is no limit on purchasing other properties as long as the Member lives in the property purchased through NACA and they continue to have the NACA Mortgage. If the Member refinances or pays off the NACA Mortgage they would not have the occupancy requirement.
At the time of closing, the house purchased with the NACA mortgage must be the Member’s only home. After closing, the property must be the Member’s primary residence that he/she occupies. NACA takes out a lien on the home to ensure this requirement. This does not prevent any Member from selling their house, refinancing, or purchasing additional property after closing as long as they meet the occupancy requirement.
No. NACA only provides a single mortgage product with two term lengths: 30-year, 20-year and 15-year.
NACA believes that everyone who wants to be a homeowner should adhere to the same underwriting standards. Everyone who adheres to NACA’s requirements has access to the NACA Mortgage’s exceptional terms regardless of previous or current financial circumstances.
NACA Members who own a home purchased with the NACA mortgage can purchase a new home through NACA with the same NACA Mortgage after a period of at least five years. Members must meet the eligibility requirements including not owning other properties at the time of the closing and participation. For subsequent home purchases with the NACA Mortgage, a major underwriting factor will be their on-time payment of the original NACA Mortgage. The Member may need to reimburse NACA depending on how long they had the NACA Mortgage.
Priority Members are low-to-moderate income members that have a combined income less than the median family income for the MSA where they are purchasing a home. Non-Priority Members have combined income is equal to or greater than the median family income for the MSA where they are purchasing a home.
Timeshares do not violate the occupancy requirement unless the Member is the property owner through deed or mortgage on the property. Otherwise the Member is still eligible for the NACA Mortgage.
The purchase price plus any repair escrow funds (i.e. for repairs to be completed after closing) cannot exceed the approved Maximum Mortgage Amount. The current limits for 2023 are $548,250 for a single-family home in most areas and up to $822,275 in high cost areas. There is a considerably higher limit for multi-family properties.
No. A Member cannot purchase a home above the Maximum Purchase Amount, even if the Member pays the difference in the max amount and the home listing price out of pocket.
Yes. NACA puts a $25,000 soft-second lien on the property to ensure that the Member lives in the property for as long as they have the NACA Mortgage. In addition, it ensures any required repayment of any assistance provided by NACA for the mortgage payment.
NACA will subordinate its second lien for the Member to obtain a home equity loan for property repairs and other items. NACA retains total discretion to approve such secondary financing based on whether this financing is necessary and affordable. For example, it does not make sense to pay off unsecured credit card debt through a home equity loan that reduces the Member’s savings in the property (i.e. equity) and exposes member to risk on debt (i.e. non-secured credit card debt) where non-payment would have no impact on ownership of the home. NACA also will subordinate its second lien when funds from a grant are part of the purchase transaction and it is required by the grantor.
The NACA mortgage product is not limited to first-time homebuyers. Members must still adhere to the requirement that they do not own another property when closing on a home purchased with the NACA Mortgage.
No. The NACA Mortgage product cannot be used to purchase second homes. The NACA program is designed to help low-to-moderate income families and people purchase in low-to-moderate income areas become homeowners. No member of the household can have an ownership interest in any other property.
No. No member of the household can have an ownership interest in any other property. A household member is anyone 21 years or older who will live in the property purchased through NACA.
NACA allows Members to purchase a home twice through the Purchase Program as long as there is a minimum period of five years between.
Yes. NACA provides an extraordinary benefit for people with a section 8 voucher called Homeownership Through Public Housing Assistance (“HOT-PHA”). The Member would use their Section 8 voucher to make the mortgage payment. Since Section 8 holders purchasing a home with a 30-yr mortgage can only receive the Section 8 benefits for 15 years, the HOT-PHA program pays off the mortgage in less than 15 years. NACA is able to help Members achieve this by using the Section 8 monthly payment to pay the mortgage payment (i.e. PITI) plus any additional principal. The Member would need to meet all the other NACA underwriting and qualification requirements. To date a number of housing authorities are utilizing the HOT-PHA program.
NACA supports obtaining the 8-hour HUD certificate for homebuyer education without having to go through the entire NACA program. The participant is not required to be a Member. The first step is to attend a NACA Homebuyer Workshop (“HBW”). Upon completion of the HBW the next step is to make an appointment for an Intake counseling session. After that is to do a follow-up counseling session. If the total of the HBW and counseling sessions are eight hours or more, the NACA Counselor can provide the eight counseling certificate. If the participant only does the HBW, NACA would provide the four hour certificate.
Members who want to sell their home obtained through the NACA Purchase Program and release the NACA lien send an email to [email protected]. Members who do so will get a response within 48 hours.
NACA used to have a $50 monthly “NSF” fee for the first 5-10 years of the mortgage. This is no longer the case for new mortgages purchased through NACA.
NACA Members do not pay Private Mortgage Insurance (“PMI”); instead they have access to NACA’s comprehensive post-purchase program through the Membership Assistance Program (“MAP”). This is provided as a free service for Members for as long as they have their NACA mortgage.
Some Members with a NACA mortgage may need to continue paying a $50 monthly fee which can range from five to ten years depending on the mortgage amount. This applies to NACA homeowners with a mortgage that closed with Bank of America before January 1, 2014 and CitiMortgage before March 1, 2012. For more information including how much longer they are required to pay, contact the NACA Membership Assistance Program (MAP) at 281-968-6222 to speak to a representative.
No. Property or other real estate investors are not eligible for the NACA Purchase Program. The NACA program is designed to help low-to-moderate income families and people purchase in low-to-moderate income areas to become homeowners. No member of the household can have an ownership interest in any other property.