Home Buying in Chicago>Question Details

Jj, Home Buyer in Bucktown, Chicago, IL

Has anyone used NACA?

Asked by Jj, Bucktown, Chicago, IL Wed Oct 29, 2008

Has anyone, buyers or brokers, used Neighborhood Assistance Corporation of America? Is the no down payment, no closing cost, no PMI fixed 30 year loan too good to be true?

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0 votes Thank Flag Link Wed Aug 5, 2009
i am currently going through the NACA program now. I can definately tell you that it is a program that takes a lot of patience. They are every much in demand and take a lot of time to even process your paperwork. You have to first go to a workshop and sit through a overview for a few hours, then wait for them to process your application and call you for a first consultation. It can take months.
When they say no money down that doesn't mean you can just move in. You do have to pay for the appraisal(s), you do have to pay the deposit on the home of your choice to take it off the market and you have to pay the escrow in advance, but there is no closing costs. If you have saved money already then you get that back at closing because the people doing the closing have no idea that you don't pay that. The mortgage company they use which are either citigroup or bank of america have agreed to pay the closing costs. If you have the patience to go through with it I say go for it.
0 votes Thank Flag Link Mon Nov 3, 2008

The percentage point on the website is not the local percentage for Chicago....that is considered the national average. For Chicago it is lower. That percentage point is what the national average is for all mortgages where NACA has its services and no it is not one percent below prime...I said that but that is not right....I meant to say that whatever the rate is here in Chicago then it will be 1% below that market rate. It is a really good program and if anyone is interested I suggest you contact NACA directly. Jeff if you said a couple of things that were incorrect and I suggest anyone who is interested should contact NACA. Also, the point of not allowing a line of credit etc is to protect the buyer....the percent of people who start having problems with paying their mortgage after a second mortgage or line of credit is unbelievable...If someone plans on taking a line of credit out on their property then this is not for you. I would run fast from any agent who said that it is still fine to do so in this market, but agents will tell you anything...so there is no acception to agent on this website. Also a lot of agents do not like to work with NACA because NACA is very harsh on what percentage buyers agents receive and will even tell agents to use part of it as a credit if the commission is absolutely ridiculous, but not in all circumstances such as the general 2.5 percent...that is why you should use a NACA agent....trust me I had a regular agent before (two) and they are not going to be for you like a NACA agent. I am a firm believer that agents are out there only to make money and some will argue with you about that until they are running out of breath, but of course that is how they make a living so who can blame them? Anyhow, only use a NACA agent:) Jeff it is funny how you call these assistance programs....you should brush up on the program...I am not sure what kind of "assistance program" they would fall under lol. Also if you have any doubt just call Bank of America or Citimortgage and they will reluctantly tell you that it is the best program and there is no devil in the mix etc, but it is your job to discourage!
0 votes Thank Flag Link Thu Oct 30, 2008
It sounds like the best thing since sliced bread.

Some facts all from the website: The condo limit for Chicago is $275,000, which is a big limitation in many Chicago areas. FHA/Fannie loan limit is $417,000.

Second, once you purchase you pay $50/month "membership fee" for between 5 and 10 years. That is equal to a quarter bump in the interest rate.

Third, it does not appear you can obtain a second loan (or line of credit) which many people need or want.
NACA puts a lien on your home and won't say for sure whether they would subordinate to any future 2nd lender.

Fourth, their published rate for yesterday is 6.5%- this is current market rate for FHA/Fannie for many lenders and NOT one percentage point below market. Paying a point lowers the rate a quarter just like any other loan out there, this is not unique to NACA.

Finally, they do have some great press, but if you google NACA you can read some not so cool real stories on various threads.

Hey, if it works for you I am happy but the devil is always in the details on these assistance programs.
Web Reference: http://www.1sthomegroup.com
0 votes Thank Flag Link Thu Oct 30, 2008
Actually, I am with NACA and I just got reapproved last week....So I guess I am respectfully correcting you. Yes, they do accept no money down because NACA's interest rates are automatically 1 percent below prime. They won a lucrative lawsuit years ago (I think in the 80's) and that is why they are able to do this. If you look on their website you will see tons of links from CNN, Fox News, MSNBC where they have been interviewed and said to be the best program over the years. No it is not to good to be true at all, but honestly they are super busy so as long as you get through the approval process (about 2 months) then you are fine. Also, if you are skeptical just call CitiMortgage or Bank of America because that is who they finance their loans through and both banks will tell you it is the best program. Also each 1 percent you put down buys down your interest rate by a half a percentage point and you can actually buy down to 0 percent. It is not a joke and it has been all over the news since I was a kid in I think the '80s and as a matter of fact they were just featured on WGN and ABC chicago news as the people to go to if you are trying to save your home. You will find plenty of links about them everywhere and they have been around for at least 20 years, but since they are swamped they kind of keep it on the low, but they are more and more in the spotlight because of the crisis! NACA.com....I approve because I actually know:)
0 votes Thank Flag Link Wed Oct 29, 2008
I believe that the lenders no longer allow for down payment assistance from non-profits, effectively ending the era of no money down loans.

I'd love for someone to tell me otherwise, I have clients that need these loans still?
Web Reference: http://www.1sthomegroup.com
0 votes Thank Flag Link Wed Oct 29, 2008
I can refer you to agents and buyers that have used NACA if you contact me privately at mike@mjsinspections.com. -Inspector Mike Savage
0 votes Thank Flag Link Wed Oct 29, 2008
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