Wednesday, January 31, 2007

You say “Naahh-cah,” I say “Nya-Cah”

Our friend Michael the contractor told us about the Neighborhood Assistance Corporation of America (NACA). He found out through his landlady at the time, a 21-year-old homeowner named Komani. After causing one too many mortgage lenders to break into hysterics at the regular old banks—you’re how old? You want to buy what? Ahahahaha!—Komani decided to give NACA a try. She is now the proud proprietor of a three-story, brick beauty close to downtown Buffalo. She also works at Righteous Babe Records and has a lime green dining room—you want to be her friend, trust me.

Steve and I decided to find out more about this NACA program and soon found ourselves signed up for a three-hour workshop that would serve as an official (and required) introduction to the organization. We saw an inspirational, if not borderline propagandized, video on the origins of NACA and left as True Believers. Here’s what the “History” page at NACA’s website has to say:

The Neighborhood Assistance Corporation of America (NACA) is a non-profit community advocacy and housing services organization. NACA’s confrontational community organizing and revolutionary mortgage program have set the national standard for effective neighborhood stabilization programs that make home ownership a reality for working families.

The confrontational community organizing they’re referring to is THIS and THIS. They basically spent lots of time camping out in the corporate offices of predatory loan lenders (i.e. the former Fleet bank). Anyway, NACA’s requirements aren’t ridiculous but the process is designed to be slow-going and extensive. Unlike the predatory loan lenders they’ve fought against, NACA doesn’t want you to buy a house you can’t afford.

To be sure that their members don’t get stuck with a money pit—well, an extraordinarily deep money pit—there are numerous checks throughout the process. For instance, we had to make a budget and submit our monthly pay stubs, our bank and credit card statements, our credit reports—our ENTIRE financial history, in short. If we hadn’t been paying our credit cards on time, our counselor would’ve told us he wanted to see six months of on time payments. That kind of check. Another example: when we finally found a house, we had to get our housing inspection approved by NACA so that they could determine if we were getting too much or just enough to handle.

NACA pays for your attorney fees and the search and survey of the property. All their counseling—including credit resolution—is free and if all NACA counselors are like ours, you’re in for a treat as sweet as a hot fudge sundae with whipped cream. (Actually, there’s an ice cream shoppe right next to the Buffalo office. To us, this made NACA even better/more credible.) The organization doesn’t pay for any home inspections and you will have to save up some cash for things like a deposit, first home insurance payments, and taxes. Not one to be thoughtless, NACA counselors make sure you’ve got this money in the bank before they pre-approve—before you can even begin working with a realtor.

The full version of their services is available here.

Sound too good to be true? Well, Steve and I definitely left our first workshop feeling like somewhere, in the fine print perhaps, they were going to want each of our first born babies or maybe the ashes of our favorite dead relative. We wondered, What’s the catch?

Here’s the catch: You’ve got to live in your house for the life of your NACA loan but can rent out any additional units AND You can’t own any other property when you apply for the NACA loan AND There are certain limits on income levels so all you rich muthers need not apply AND You’ve got to participate in something like five NACA “actions” a year.

NACA actions include sticking a sign on your front lawn, saying that you bought your house through NACA. Great, we thought, this will fit in wonderfully with the seven other signs we’ll have on the yard during election season—no prob! Occasionally, we might be asked to speak about our experience at a NACA workshop. Again, we were on board: I love talking about myself and my feelings, I thought, I’ll be there anytime you’ll have me! Me, me, me! Yet another possible action would be participating in a demonstration against whatever evil, neighborhood-destroying force NACA has designated the enemy. I don’t think I have to explain too much: this action resonated deep within our communist-hippie souls and we both stood up in our chairs, began shouting the What-Do-We-Want/When-Do-We-Want-It chant without even knowing what we wanted, or when we wanted it. Sold! We were sold.

But seriously, if you care about your neighborhood and you’re not a schmuck, the required participation is nothing but common sense. With that, I demand that you check out a NACA near you. Tell them Whitney and Steve sent ya and that our enthusiastic recommendations should count for at least one year’s completion of required NACA participation, dammit. And then go get some ice cream.


Antonya said...

I totally agree with what you said about NACA. I recently attended one of the workshops this past Saturday and I was blown away. I also was looking for the catch thinking that it was too good to be true. I am not waiting patiently for my one on one appointment :)

Elizabeth said...

Isn't there a monthly membership fee you have to pay after getting the loan?

whitney arlene said...

For five years, you pay $50 a month to the Neighborhood Stablization Fund. The fund is set up in case a member loses a job or gets hurt or otherwise fails to make a monthly payment. NACA works with them to get back on their feet.

The thing is, the membership fee is rolled into your monthly payment so you don't really notice it's there. What's more, the fixed interest rate you get from NACA is so much lower than what you'd get from a convetional bank that you save money on the whole deal, membership fee and all.

Example: my friend is buying a house was quoted a 7.3 rate. Her family makes way more money than us and are all around better candidates for a mortgage. But because we went through NACA, our rate is fixed at 4.5--hooray!

Anonymous said...

I have gone to the workshop, but I am getting cold feet. I was reading the memebership agreement and saw that NACA attaches a lien to the property as well. Have you had any experience with that part of it?

Anonymous said...

I'm working with the NACA program now in Baltimore, and I want to give up. No one returns your calls or e-mails, and the turnover is so terrible you end up working with several counselors before you can close. They're not giving ANYTHING away for free, they're giving it away for the cost of your SANITY!!

Anonymous said...

1.You don't have to live in your house for the life of the loan.
2.The lein is soft and enforced only if you rent it out.
3.The Membership fee of $20 is paid once a year.
4.NACA is the BEST

Ward Family said...

You DO have to live in your home for the entire life of the loan or that is when they will enforce the lein. All they are asking is for you to live in the home that you purchase. If you can not live there, sell it and you should be fine. We are working with the Raleigh, NC NACA office and so far we are impressed! We have been with them for about 1 month and have made great progress.

Anonymous said...

I think NACA is the best program out there. You do have to live in the house. The membership fee is $50/ month. There is a lein... but all mortage companies have a lien on your property until you pay it off. They are slow moving and in the Los Angeles area personnel turnover is a reality. Keep on them and achieve your dream of home ownership.

Scott said...

I am a contractor about to start work on a NACA home. Can anyone tell me if your contractors had any trouble being paid? Positive and negative comments welcome.

Whitney said...


If you look at my other NACA posts (the tag is "NACA") you will see that I've written about our experience with the rehab dept.

Sadly, I have to report that YES there have been issues with contractors getting paid. One of ours said they would never work with NACA again. I'm sorry to report that but it's the truth. NACA is a great company but they need better management in their rehab department.

Jersey Girl said...

I'm glad I found this blog... I just attended my first NACA meeting this past weekend and I am at the "OK where's the catch?" stage of things. It DOES sound too good to be true.

The lien is to discourage flippers or people who are only looking to buy rental properties. NACA wants to help people improve the community, not make money in real estate.

I did ask about it though - it's $25,000, and just FYI they do waive it if you have a good reason to sell the house before you've lived there for the 3 year timeframe (ie. you get pregnant, are sent overseas by the military, etc.)

Question - do they allow you to have your lawyers review the paperwork? I'm thinking that might be a good idea...

Whitney said...

Jersey Girl--I'm glad you found the blog too! And yes of course, they allow your lawyers to review the mortgage docs. They pay your closing-related attorney fees too.

derexp said...

I recently attended the workshop in Atlanta, GA. It was very crowded and I was unable to personally speak to the housing counselor, so maybe you can answer the 2 questions. What, if any, is the income limitations and are there any reasons that someone can be turned down by the NACA program?

Whitney said...

derexp - I'm not surprised you couldn't find some alone time with the counselor at your workshop. Mine was also very busy. I think the purpose of the workshop is to introduce you to the counselor and then set up a future one-on-one meeting at which you can ask as many questions as possible.

Re: income limitations, I really don't know the answer. It's definitely not as restrictive as other programs I looked at, many of whom receiving public funding.

Again, you'll have to ask your counselor about the reasons behind NACA "turning someone down," as I'm not qualified to answer that. I will say that they're adamant about getting people loans they can actually afford. You won't be able to take out a loan that's monly payments will put you in poverty. They want to avoid foreclosures and stablize neighborhoods. Hope that helps.

Anonymous said...

There is no income restriction. You can make a million dollars a year and still qualify. Most millionares 1. dont want the hassle of going through the extensive process, and 2. probably own multiple properties.

There is however a limit on the "amount of home" you can buy.

In Los Angeles the most expensive single family residence you can buy is capped at 360k.

dobeme said...

I have a NACA loan. I bought a house that needed rehabbing! The HAND Dept is horrible to deal with! They are so unprofessional! I can't get a straight answer out if anyone! My contractor had 25% of their fee withheld because the inspector found two new items he wanted repaired. He didn't find them in his first inspection, then penalized my contractor for his defiency! Beware of Naca rehab loans! I can't get over $3000 held in escrow because no one can answer my questions! Beware!!!!

ElmoDADA said...

Whitney and Steve
Looking back was NACA the right move for you?

Anonymous said...

Hi !.
You re, I guess , perhaps curious to know how one can reach 2000 per day of income .
There is no initial capital needed You may begin to get income with as small sum of money as 20-100 dollars.

AimTrust is what you haven`t ever dreamt of such a chance to become rich
The firm incorporates an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with affiliates everywhere: In USA, Canada, Cyprus.
Do you want to become really rich in short time?
That`s your chance That`s what you desire!

I feel good, I began to take up income with the help of this company,
and I invite you to do the same. If it gets down to select a proper companion utilizes your funds in a right way - that`s it!.
I take now up to 2G every day, and my first deposit was 1 grand only!
It`s easy to join , just click this link
and lucky you`re! Let`s take this option together to feel the smell of real money