2020 NACA changes?

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    I asked at the purchase workshop and was told, priority members can buy down to .125 and non priority members can only buy down to 1.25


    Has anyone else been able to confirm nonpriority members being able to buy down all the way down to 1.25?


    I do believe non-priority members were never able to buy down more than 5.5? effective points? The Federal Government I think limits non priority members and adds a fee which is where the half point comes in.


    FYI, I was told loan limits have not changed by my NACA counselor (feb 27th). They are going by the 2019 limits still which are the ones listed on the website (414kish/725kish)


    Hello All,

    For the time being, non-priority members are limited by the HOEPA restriction of a maximum total buy down from all sources of five points. On a 30-year loan, this reduces the interest rate by 1.25% and for a 15-year loan the reduction is 2.5% (based on today’s rates of 3.125% for a 30-year and 2.75% for a 15-year). Therefore, a non-priority member can go as low as 1.875% on a 30-year and 0.25% on a 15-year.

    A priority member making less than 80% of the median income for their Metropolitan Statistical Area (MSA) receives and additional 1% rate reduction from BOA, so the 30-year can go to 0.875% and the 15-year can reach the lowest possible rate of 0.125% using just three and one quarter points of buy down.

    There’s no word on what new programs may be on the horizon, so please consider the above the status quo.

    Tim Trumble
    Online Operations, NACA



    Hello @TTrumble

    Am I understanding this correctly?

    Priority members making less than 80% of median income for their MSA receives a 1% rate reduction from BOA. Not 0.5% rate reduction? Is this automatic?



    It would be amazing if the 1% reduction made a return even though .5% is still very good!


    I wonder if the 1% will apply to those that have are under contract and have signed bank application. Since when did this 1% change from .5%?


    @dmesau If you did your bank application, whatever it said on there is the rate you are getting. It wouldn’t be noted as a special rate, but it would show as a lower rate than you expected.



    Up until 2018 naca contracted with citi and boa. Then Citi exited the mortgage lending industry entirely and unexpectedly dumped all naca clients on boa. This caused boa to run out of naca funding in August 2019 which is when the 1% switched to 0.5%. At first they canceled it altogether then naca quickly flexed their muscles. The 0.5% is a compromise and it’s been that way for 6 months.



    We understand that, but based off of @TTrumble reply on several posts, it seems that it’s 1% vs 0.5%. Either one is a blessing. But I would like clarification because I hear different stories from different NACA representative.

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