January 12, 2020 at 5:39 pm #64496itzmee203Participant
We currently are in our home we got through NACA about 6 years ago. We are now looking to move and would like to get a NACA loan again. Our property value increased a lot since we purchased our home and would now have enough to buy down the interest to 0% on our next place with a sizable amount left over. Would we be able to use that money as a type of down payment?January 12, 2020 at 6:07 pm #64497NelsontMember
BUT. As of right now, hopefully temporarily, members can only buy down the interest rate by 5 points combined from buyer, seller and any grants for a grand total of a 1.25% reduction. Using today’s rate of 3.25% the absolute lowest rate you can get on a 30 year loan is 2%. If you’re income is below 80% of your MSA you are gifted an extra 0.5% rate reduction from bank of America.
The reason behind this is because when you bought your house naca worked with both bank of America and citi. In 2018 naca ramped up their advertising and Citi abruptly exited the mortgage lending industry literally dumping all of their naca clients onto bank of America. The result of all of this in 2019 was naca had more members than ever before and bank of America had almost triple the loans as 2018. So in August bank of America ran out of funding for naca members and canceled their grants and 1% rate reduction for low income members. Naca quickly flexed their muscles and negotiated a 0.5% rate reduction for low income members. This was labeled as temporary. My guess is we will have to wait until an official press release to hear more.
Because of the huge influx of members naca has implemented new departments to take the load off the MCs and bank of America has staffed up but contracts are taking 60 days to close in slow period and up to 90 days to close in summer. Bank of America ends up taking 4 to 6 weeks after the bank app stage.
So that is a long way of saying if you sell your house first and have the documentation to prove the sale closed before you go through with your new naca home you can use that money anyway you see fit. If you were thinking of buying a house that would require you to buy down the interest to near 0 then you can’t do that anymore at least not right now and you would have to figure out if applying that money toward principle reduction would get you to where you want to be.
Hopefully this all helps you out.January 13, 2020 at 9:03 am #64511OliveJamesMember
I see you mentioned 90 days to close in the summer 😬. Do people even accept offers with that kind timeline, especially during spring/summertime?? Or do you just say 60 days and hope for the best?January 13, 2020 at 9:21 am #64512NelsontMember
Yeah I would say 60 days and hope for the best. I would also hope by the summer BOA and NACA have figured out a way to further decrease the potential delays.
90 days BTW is not normal it just has happened on occasion. You will see it more with members that have issues with their credit access and repairs needed to the house.
As a seller I would be more interested in a 60 day contract that has the possibility of closing in 45 than a 45 day contract that might not close for 60.
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