Tuesday, March 18, 2008

Questions about NACA: Round #1

I've compiled the questions you've asked about NACA through the comments section of this blog, over email, and through MySpace. I will answer them in a series of posts. Some of them I grouped into general issues/concerns with the program. Please keep in mind that I'm speaking about my and Steve's experience; other NACA members may have a different take on its services, positive or negative. I'll throw in a few anecdotes from friends here and there.

How long did it take you to get through the NACA process?
Steve and I knew we wanted to buy a house in the City of Buffalo but beyond that, we were clueless. We were leaning to the West Side but were also willing to consider properties closer to the Canisius College area and Black Rock/Riverside. In our hearts, we wanted a house tomorrow but in our heads, we knew it made sense to go slow.

I think this reality affected our experience with NACA in a positive way. We didn't have a neighborhood or a house in mind--as some people who contacted me do--so it didn't matter, for example, that we had to wait three weeks after our NACA workshop for a one-on-one appointment.

From finding out about NACA and attending the required workshop to closing on our house, the process took about a year. If I remember correctly, both presenters at our workshop said their process took around a year too.

While I understand the frustration associated with slow-moving bureaucracies, I think that the process NACA puts its members through is a good thing. If the goal is to give first-time homeowners mortgages that are non-predatory in their nature, fixed at low interest rates, and genuinely affordable for that buyer, then an education process is a must. NACA members are required to create budgets, accumulate savings, take care of bad debt, and be reasonable about what they can risk. This hand-holding was great for us; some people might find it annoying.

For about 4-5 months, all Steve and I did was save money, pay bills on time, and check in every couple of weeks with our counselor John (he was very accessible). Once we had enough money saved--that magic number was determined early on--we got hooked up with a real estate agent. About two months and many homes later, we found "it" and made an offer. After that, everything moved along well.

(I can't say express enough how grateful I am for taking this process slow. It's the biggest investment I made; I'm glad I looked at 15 houses and had enough money saved to buy paint supplies after closing.)

I think the slowest part of the NACA process is accumulating enough savings and credit. For those of you hoping to speed this part up, come to your first appointment with money in the bank and a budget already created.

What's your relationship like with NACA post-closing?
This is a two part answer because there are really two relationships to consider: that with our local NACA office and counselor, and that with the NACA rehab department (known as HAND). I will get to the HAND stuff in another post--trust me, I've got a lot to say!

Regarding the local office: each member is required to participate in two NACA "actions" per year as an agreement of his/her membership. These actions aren't enforced with an iron fist and I suppose if you wanted to blow them off completely, you probably could. That would also make you an ass.

The "actions" are pretty diverse and include the following choices: office work, speaking for ten minutes at a workshop about your experience, attending an advocacy event, and putting a lawn sign on your front yard. You can also sit on a panel and review current requests for NACA's Neighborhood Stabilization Fund loans from other members. We did this last one a couple months ago and it took an hour.

Beyond the actions, I've had very few reasons to call our counselor John post-closing. I did reach out to him regarding my trouble with CitiMortgage and he had some helpful advice. I would not hesitate to call him again if needed. Around the time I was having trouble with the bank, a different NACA rep from out of town called me to check in and see if things were going ok. They frequently monitor the status of member's loans and will check in if things look hairy. Luckily, my problem was finally resolved the day before so I didn't need his help. Still though, I appreciated the call.


Anonymous said...

Thanks for this.


Michéle Hastings said...

how much time elapsed from accepted offer to closing on your home?

Whitney said...

Eisen--you're welcome.

Michele--It took the standard 60 days or so. We found it and made an offer in January and closed March 21.

Schnelle said...

Thank you for this information. My issue is that we have a condo in mind, a lot of savings, but don't know if we can realistically wait a year. We go to the seminar on saturday.

Rebecca said...

We had savings in the bank and good credit and it was still a hassle. Our buyer's agent never wants to work with NACA again.

the kelly said...

I just wanted to thank you for sharing this information. After finding your blog I was inspired to look into NACA (who I'd never even heard of, other than "that office by Mighty Taco").
My cobuyer and I have had two meetings so far, one more to go and John will present our case to the underwriters.