September 2, 2016 at 2:31 pm #33976
Good Day Everyone,
I am researching the possibilities of starting the purchase program with NACA. I signed up to go to the workshop later this month. I saw in the Steps to Home Ownership that there is a Maximum Purchase Price restriction and when I entered my zip code it showed $208,154 for a Single which I am guessing is a single family residence. I have been reading the forums and have seen another term “maximum regional limit” are these two the same and is there any leeway with this because the homes were I live start higher than the $208K that is listed.
Zip is 34714
Please advise. Thanks in advance for your help.
SandraSeptember 5, 2016 at 11:39 pm #33995pratikMember
There are two ways to dodge “maximum regional limit”: by finding poor/moderate neighborhood or by earning less than 80% of median income.
Check this out: https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx
As it turns out the whole of zip code 34714 happens to be in the neighborhood with “middle” income, i.e., not poor/moderate income and therefore you cannot exceed “maximum regional limit”, which happens to be $208,154 as you rightly pointed out.
So, this option is gone for you unfortunately.
If you happen to fall below 80% of median income, then this restriction does not apply. However, you will then be limited by your total monthly payment that has to be 31% (or 33% if you are currently paying this much or higher amount to rent). Now you can make the best out of your 31% limit by buying down the interest (which could dramatically increase your home purchase price). The buydown has to be borne from your personal bank account (not a relative or parent) or from a seller. So, make sure you understand what it entails and then explain it to seller and see how s/he can help.
PratikSeptember 6, 2016 at 7:57 am #33997
Thanks for the response Prarie. Based on your response it seems NACA will not be for me because both options don’t work.
SandraSeptember 6, 2016 at 10:21 am #34001
One item that needs to be clarified in pratik’s response to you: Funds used for the interest rate buy down may be a gift to you from family members, grant programs, etc. but may not total more than seven points (7% of the mortgage amount). The seller may contribute up to ten points toward the buydown.
September 6, 2016 at 1:16 pm #34006
- This reply was modified 3 years, 8 months ago by TTrumble.
Pratik – sorry about the spell check changing your name.
Tim – Thanks for the response. My problem is that the prices in the section of Clermont that we like for a 4 bedroom (this is what I need based on family size) are greater than the $208K and we earn more than the median. Seems to be a no win for us with NACA 🙁
SandraSeptember 7, 2016 at 5:33 pm #34032
You may not be entirely out of luck. Pratik was in error in claiming that the Zip Code is the geographic area used for determining the percentage of median income. It is determined by the Census Tract instead. A given Zip Code normally has multiple Census Tracts within it. If the Census Tract has a median income that is below 80% of the MSA’s median income, the regional limit is eliminated.
A little research at http://www.census.gov should get you a definitive answer.September 7, 2016 at 8:04 pm #34041
Looking at the census tract it shows a median household income of $54,297 and the MSA median income shows to be $58,300.
Married couples median income shows $59,221. It does state “in 2014 inflation adjusted dollars.” Not sure if that matters.
😣 we are above 70 combined.
SandraSeptember 8, 2016 at 12:28 pm #34063
In a word… ouch. It’s above 90% either way. I wish I could come up with another idea for you, but if everything is priced above the regional limit for that area, I’m afraid we hit a brick wall. Your only option would be to look in a lower-priced area.September 8, 2016 at 4:12 pm #34081
Thanks Tim for responding. It is good that you are here to answer these questions for everyone. I signed up for the workshop on the 24th, is there a way that I can cancel my registration? I would hate to take the seat away from someone else who could use the program.
SandraSeptember 8, 2016 at 5:33 pm #34085
Don’t worry about cancelling the workshop registration. There are always no-shows at every workshop and we take that into consideration when taking registrations on the website.
Thank you for your very kind words. Helping people here on the Forum is one of my favorite parts of my job. I’m sorry we won’t be able to help you become a homeowner and wish you the best going forward.September 12, 2016 at 8:31 pm #34144chillboxMember
@TTrumble: Thanks for helping everyone understand the process to achieve their dream house seamlessly. Right now, I have been in house hunting for almost two months, finally, we found couple new construction townhomes in good school district which are really impressed myself and my wife. but the problem is, price higher than regional limit (355K), even if I try harder, builder probably come close to 355K. Will this purchase price work out? apart from home purchase price, Do I need to include any other expenses towards max purchase price? property tax and Insurance cost during closing are considered towards max purchase price??? Please help me handle my situation efficiently.September 13, 2016 at 12:40 pm #34158
For members who are subject to a regional limit, the price must be at or below the regional limit and not a penny over. “Close” doesn’t count. Since your maximum acquisition cost is based on the affordable payment amount, the projected taxes and insurance are already factored in.
Concentrate on the sales price and getting it within both your affordability and the regional limit. Negotiating the deal is what your real estate agent is for.September 15, 2016 at 11:33 am #34181ajcbabydollParticipant
I can understand your needs vs pricing. We are considered “high earners” but still used NACA because, well, it’s such a great program. With traditional lenders, we qualified for over 3 times NACA’s max amount in our area. I cannot tell you how happy we are that we continued to look for a house (also needed a 4 bedroom b/c of family size) that fit the NACA qualifications. It has allowed us so much financial freedom – private schools, nice cars – because we are not drowning in mortgage, pmi, and higher interest – like our friends and co-workers in the brand new fancy subdivisions.
My advice is to keep looking unless you’re on a time crunch for some reason. It is SO worth it. We were able to find a beautiful home that is 15yrs old with a resort-style pool all within the NACA limit. I feel like I got a bargain!
Good luck to you!September 15, 2016 at 12:33 pm #34182
I would love to find something within the NACA purchase limits which is why I was trying to understand what the restrictions were and how I could still make a purchase via NACA. The issue is that the homes that are below the limit are in subdivisions that I would not like to live in. My husband is a mail carrier so we have a very in depth view of what goes on in the various subdivisions and if you were to look at the two main zip codes for my city there is nothing under the NACA limit.
I am glad it worked out for you. Doesn’t work for me.
Just for giggles – I did a search just now for 4 bedrooms between 100K and the 208K limit and only four came up with one under contract, one foreclosure and the other two not doable at all. For my city, that limit really is ridiculous.
September 15, 2016 at 3:29 pm #34184
- This reply was modified 3 years, 8 months ago by sleslie1797.
It sound like yours may be one of the areas where home prices have risen beyond reason. Certain areas (Miami or the San Francisco Bay area for example) have seen prices rise beyond real value. This has also been fueled by more demand than supply as people are trying to take advantage of our still historically low interest rates before the Fed raises rates late this year or early next year.
Sorry it’s not going to work our for you. I wish you the best!
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