Yes. It is not only possible but encouraged for Members to combine grant funding with their NACA Mortgage. There is a lot of grant funding available through cities, towns and states. These grants – which are often called down-payment and closing cost assistance (DPA) –can also be used to buy-down the interest rate with the NACA Mortgage. This is the most effective use of grant funds.
Typically, when these grants are used for closing costs, the lenders inflate the closing costs. When they are used for a down-payment, the lender inflates the down-payment requirement. With NACA there is no need to spend government or other grant funds for the closing cost and down payment since there are none. The NACA Mortgage enables members to use these funds to significantly reduce NACA’s already below market fixed interest rate. As a result, Members are obtaining very low fixed interest rates, and many receive rates of less than one percent. NACA have approved grants in Atlanta, Charlotte, Las Vegas, Houston, Boston and other areas nationwide. Members should identify grants in the areas they want to purchase and work with NACA staff for NACA to be approved and Members can use it with the NACA Mortgage.
Members should ask their NACA Counselor to find resources and grants in the area of purchase. Members are encouraged to do their own research in their purchase area so that they can identify any other grant and financial assistance programs that might be available to them. Grants information is frequently available at the city, county and local housing authority websites and offices.
After identifying a grant program, NACA Counselors and local Office Director work with the provider of the grant to access these funds for the Members. NACA has been very successful in working with both government and private entities to access funds for its members. It can take some discussion to explain the NACA program since it can meet with skepticism as it sounds too good to be true, including the aggressive interest rate buy-down which is the most effective use of these funds.
NACA strongly supports accessing all grants for its Members. Members should provide the grant information to the NACA local Office Director or Regional Director and work with them to facilitate accessing grant funds. Once approved, NACA will input the grant information into the NACA Lynx system and obtain approval from the lender which is not a problem.
To resolve any questions or issues please contact NACA Member Services at 425-602-6222 and if they are unable to resolve the issue escalate the request to the National Office in Boston at 617-250-6222.
Most grants require a lien to ensure that the homeowner stays in the house for a period of time or other conditions. Most liens will not require any payment after the homeowner lives in the home for a certain period of time. If the homeowners sells before this time, he/she may need to repay some of the assistance.
NACA strongly supports this recapture lien, since the intent of such assistance is to encourage long-term homeownership. NACA will subordinate the NACA lien to a lien required for accessing grants.