|There is a young couple really interested in our home, but they are working through an organization called NACA. I don't think they are income- or credit-challenged (a standard mortgage broker had them prequalified and then they said "but we'd like to stick with NACA.") which makes it odd they are working through this group.
Essentially, NACA is a program for low-middle income folks that appears to focus on budgeting and being sure they can afford the house they eventually buy. It also provides quite low rates, and 100% financing without PMI, but there is a "membership fee" involved and "participation" by the borrowers in the future for training, peer counseling, etc.
There are also some tie-ins, such as they must have a NACA-approved agent and a NACA-approved inspection. If you read between the lines (and you don't have to really even squint), it appears the organization is designed to protect folks from predatory lenders and overpriced distressed properties (which ours is not, although it's priced higher than others in the historic neighborhood based on size and condition).
I'm just wondering what we're in for. The couple has had my listing agent show them the house three times, the parents have all seen it, etc. But now a new buyer's agent will have to get into the process? I also wonder if there will be a hardcore push for concessions of some kind, given the "approved" agent and inspector. Or, it could be that the agents and inspectors aren't anything special, but have just paid a fee to get the referrals from NACA.
So, has anybody worked with this group before?
|I know quite a bit about naca. we once thought about buying a house through it. the part about predatory lending is on the nose. The organization was started to help folks NOT lose their homes because of predatory lending. Basically, they require the buyers use a buyer's agent and guide them through the whole process. There is even a program for renovation $$ for the buyers, if necessary. All naca buyers have been prequalified. If they decide they want your house, and it passes inspection, there is a better chance than usual that they will buy without any weird happenings. Naca puts participants through a lot of counseling, info sessions and lectures on the enormous responsibility of being a homeowner. By the time the average family gets through this, they are usually very serious about buying. I have heard a realtor friend of mine say "oh, I've known people who worked with NACA" in a cryptic way, but it could have been sour grapes because of the lack of normal realtor/financing/broker connections. I'd be interested to know what anyone else knows about NACA or how they feel about the organization.OH, and one other thing. NACA encourages the purchase of older homes in older neighborhoods because it is constantly trying to improve inner city and at-risk neighborhoods through home-ownership. From all I've heard, its a great program. |
the web site is www.naca.com.
|Oh, and one other thing. they prefer to work through naca because naca offers one whole percentage point below market as the intest rate. if you check their web site, they tell you what the interest rate is at that moment. They have a deal with bank of america. or at least that is who they used to have a deal with.|
|Thanks, Mary. It looks like a decent program, and I can see the merits in it. It just looks like it's a bit of a time-consuming process. But, we don't have any others champing at the bit for this house, so I don't mind waiting to see how this plays out. |
I guess my biggest concern is getting the buyer's agent involved at this point, and then dealing with the inspection. I'm hoping it's more of a "we've vetted this inspector" process and not something like FHA or VA where I know I would have to be jumping through a lot of hoops on this 1925 home.
I feel good about the couple and the fact they have already had both dads over to the house climbing in the attic and basement. Per my REA, they're awaiting their qualification, so they've already been through the counseling and budget phase. I really would love for them to have the house as I think they'd be good for the neighborhood, and I know they'd give the great old house the love it needs.
|OK. I have more than a bit of a concern. |
I have reviewed the requirements to perform NACA home inspections. First and foremost…… for an entity that seems so committed to making certain that the buyer is "protected", it appears as if the only qualifications to become a NACA HI is the ability to take digital photos, upload them, and to use a specific software (that can be downloaded at no cost) to use email…...and upload all to the web. In other words……not much more than the ability to fog a mirror.
In addition, their description of a "home inspection" appears to focus on the utilities and energy efficiency...both of which are beyond the scope of a home inspection...and, both of which few if any HI's are even remotely qualified to perform...even if they are excellent and fully experience HI's.
A meaningful assessment of "utilities" and/or energy efficiency is a complex analysis...….requiring specialized education and training…engineering capabilities in terms of load analysis, etc…and as such generally cost around 500 to 700 dollars.... on top of the cost of a home inspection.
It is not reasonable to assume that NACA HI's are getting paid $1000 a pop (give or take)....especially since they make a point of stating that the HI must have "competitive" rates, while dangling the "lots of business" carrot as the "incentive" for those "competitve" rates.
As the expression goes...one invariably gets what one pays for...
In addition, since the site seems geared toward those purchasing homes on the low end price range (e.g. they only give Newark NJ as a NJ location)…it is usually a given that such homes are often the least energy efficient due to age and lack of upgrades and/or maintenance….and unless such buyers have tens of thousands to expend on serious energy upgrades (solar panels, high efficiency furnaces, etc), the very obvious need for new windows or caulking or weather stripping is hardly the result of an inspection for energy efficiency…it’s merely citing visible defects.
Last but not least, there seems to be zero requirements for the HI to be licensed if the state they practice in regulates the profession.
That said, I am not at all optimistic that the unsuspecting buyer will have the option of obtaining a meaningful home inspection…and that is very troubling to say the least….in that it appears as if they may be led to believe otherwise. Which makes one wonder…what else about NACA is not as it "appears" to be?
I am having this researched further...I will post back with any additional info.
|interesting. I'm not sure about home inspections because we were involved several years ago and their web site wasn't quite as extensive as it is now. |
And they do deal with "lower priced homes" because they are working with folks who are buying their first homes and they want to make sure they can afford it. Also, one of their main goals is to help older (often inner city) neighborhoods recover from neglect. Here, in SA where the housing prices are not so outrageous, I think they allow plenty of financing for a house. But in some places, where a starter home is $400K, I guess maybe they aren't going to offer so much financing.
|Thanks, all. Our neighborhood is one that could be deemed inner-city. It is slowly making a comeback, so seems like an area NACA would want to focus on. Our home is one of the nicer, larger, more well-maintained ones. I've run a history of the untility bills and have made it available as a "take one" for those who view the house -- very reasonable for 2,600 square feet, ca 1925. It's all brick with a concrete tile roof. There is blown insulation in the attic and storm windows on half of the house. The furnace/AC are less than ten years old. We're in the South, so weatherproofing for the cold and snow is not as big of a deal here. |
At a list price of $149,900 (don't laugh, you coastal folks!) it is a lot of house, but on the higher end of its market. There was one of similar size that closed this week for the same price, and one a bit larger about to close at $165K, so the comps will be there. But, still inexpensive in the scheme of things.
If you'd like to see the place, go to www.liveinalabama.com and put in MLS no. 349870.
|Sounds like a wonderful house! Those potential buyers are lucky. good luck!|
|I am a licensed Realtor in GA currently working with two buyers going through NACA. I also purchased my first home with NACA 12 years ago, and I've volunteered to go to workshops and talk about the program countless times over the years. |
The program is not just for "low to moderate" incomes. At the time I purchased my home through NACA I was single and earning more than $60,000 per year. Because I exceeded their income limits, I had to purchase in certain target areas. This worked out well for me, because the area I most wanted to be in was one of those target areas.
The process of becoming "NACA qualified" took months for me, but once I was qualified I was rock solid. All home sellers should appreciate this type of buyer -- as an agent I have seen closings fall apart all the time because (1)the lender went out of business, (2)the buyer didn't have enough money to close, or (3)something "appeared" on the buyer's credit that wasn't expected. Once I was NACA qualified I closed in 30 days.
My loan was with Bank of America, it was a 30 year fixed rate, the rate was lower than I could have gotten anywhere else, and my loan was never sold. I lived in my house for 8 years before selling it for something larger (which I got without NACA).
Just thought I'd chime in on the discussion here. :)
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