Using a different lender to secure home before NACA qualification

Home Forums Purchase Program Using a different lender to secure home before NACA qualification

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    Hi All,

    Our NACA mortgage counselor (MC) submitted our file to the underwriter but it was returned with conditions. However the conditions field in the web file was blank. I haven’t heard back from our MC in regards to what the conditions are at this time. Has something like this happened before?

    We felt confident in our file because we have our MRF, no late payments or red marks on our finances, we are saving $2,000+ a month after paying all debts/rent, and we submitted everything our MC asked for in the action plan as well.

    With this in mind we started looking for homes to get an idea of what area we want to live in and what kind of house we could afford. We ended up finding a new construction community with a home being built for a great deal considering the market in our area. It is also below the maximum price our MC approved us for.

    Is it possible to use a different lender to secure this home, which still has 6-7 months left before construction is complete, while the NACA qualification process wraps up then switch to NACA? Would a Letter of Explanation help in this situation?

    The market moves very fast in our area and it’s likely the home would be spoken for by the time we receive our qualification letter given the typical time frames for the NACA qualification process.



    No. One of the suggestions is no new debt.


    I also received blank conditions. Did you get an answer from your MC?


    This is exactly what we did. You’ll have to explain the credit check later, but since you’re not actually opening a new account, it’s not an issue. You are always free to use any lender you like, and you have the right to change that up until the moment of settlement. We went to ATD last year and found ourselves in exactly the same spot, and while it does add complexity, and you should be up front with your MC about it, it’s totally do-able. Our new home will be completed on April 27th, and we just submitted our Bank Application with NACA.


    Hello FirstTimeGuy,

    Using a different lender to secure the home and generate a Purchase and Sale contract is actually pretty commonplace with new construction homes.

    Typically, the builder will try to get you to use “their” lender (which really means the builder has a mortgage broker business as well as an extra profit center) and will offer incentives, typically upgrades to the home, to use their financing.

    In every case though, the terms of the NACA loan are better than those offered by the builder. With some builders, such as DR Horton, if you come up with a loan offer from another source that they can’t beat, they will give you the incentives anyway. And since you never close on the loan through their in-house broker, you never actually acquire any new debt.

    Even if your builder doesn’t make that kind of offer, the point is that switching to NACA after signing the P&S agreement is actually very commonplace.

    Tim Trumble
    Online Operations, NACA

    • This reply was modified 11 months, 2 weeks ago by TTrumble.
    • This reply was modified 11 months, 2 weeks ago by TTrumble.

    Tim raised a great point that I forgot! Because Ryan Homes is also a lender, they offer incentives, and in their case if you don’t qualify for their loan, you still get the incentive. So we went through the process of applying – knowing we’d be rejected because of the foreclosure on my record – and got $10,000 closing assistance to put toward interest rate buydown. It’s awesome!


    Thanks for the informative answers @TTrumble and @BakerTheBaker.

    My follow up question is in regards to MRF and the deposit needed to enter a P&S agreement. In this scenario the builder has a higher than average deposit required but it is returned at closing. If I enter into a P&S agreement with the “builder’s lender” and use a portion of my savings, would this withdrawal from my savings account prevent me from meeting the MRF requirements for NACA qualification? The deposit amount would reduce our savings below the MRF amount but the deposit amount is just below what we would use for interest rate buy-down.

    Would I be able to write a letter of explanation and show documents to the NACA underwriter that the withdrawal was used for a deposit to secure a home within our budget.

    The last thing I would want is for the larger deposit to be held against me and prevent NACA qualification.

    Thanks for your help! Please let me know if you would like any clarification.


    We did the same thing with True Homes, went with their lender and switched it after going to the design center. Because we could show we put down 8000k which was more the our MRF we were good to have the difference for buy down.


    @Keja1914 Since you put the $8,000 down as a deposit your mortgage counselor was still able to count that towards your total Minimum Required Funds (MRF)?

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