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Unfortunately NACA is not currently viable to use in southern california. Maybe after the market cools down.
My wife and I spent 6 months trying to secure a home with our naca pre-approval. We have finally given up.
I really wanted to use NACA and I believe it is a great program, but the limitations just don’t work for this extremely high cost area and heated market.
The main things that kill NACA right now at least in Southern California –
Most homes in safe areas are now above the 2019 conforming loan limits that NACA is still using. You might be able to find 2 bedroom condos below the loan limits if that is what you want.
Every home is receiving multiple (like 10+) offers above asking.
Most homes are now sending multiple counters asking for most or all contingencies to be waived. NACA doesn’t allow this.
Naca does not allow even 1 day rentback, which kills most deals that aren’t homes sitting currently vacant.
A big one is that most homes are now requesting short escrow periods. Even 30 days is not currently the norm, and 45 days is out of the question. NACA employees are understaffed and overworked. Nothing ever happens in a timely manner.
There are a few more that I’m not currently remembering.
I hope that this insane housing market cools, or that NACA changes some policies to allow us to use this program in the current market. we are now just waiting until one of those things happens.
- This reply was modified 2 months, 3 weeks ago by grayfenix.
Getting a NACA loan accepted in the current market is nigh impossible in competitive areas right now. We are in South Orange County in California right now and every home being listed currently is receiving 10+ offers over asking, frequently getting cash offers and it gets even crazier than that. We have offered at the least 25k over asking on 12+ homes at this point and never been accepted.
The closest we have come to having an offer accepted was on a house that we offered 65k over asking, but then we lost out because NACA makes absolutely NO EXCEPTIONS WHATSOEVER for any buyback from date of closing. Our real estate agent had great a previous relationship with the sellers and was able to talk to them about NACA and convince them that we would close if they accepted a 45 day escrow. We were also the highest offer by almost 20k.
The deal killer was that the family was moving out of state and had a 6 month old child. They told us if we could guarantee them 1 week of buyback so they have time to move after closing they would accept our offer. After a few days of trying to go up the chain of command at NACA to get an exception to the NO BUYBACK rule, the deal was dead. We haven’t really even sniffed getting an offer closed since then, because the competition is getting even worse.
The last 3 homes we offered on went to people that were willing to waive both the loan contingency AND the appraisal contingency, and another before that went to an all cash offer with a 10 day close.
I still believe that NACA is a good program, and in the right conditions it is amazing.
Unfortunately, the 0 down payment, the 45 day minimum escrow, the unfamiliarity of seller representation with NACA, the unfortunate reputation of being difficult with real estate agents that are familiar with NACA, the unresponsiveness of overworked mortgage consultants when sellers do call to verify offer letters, and the inflexibility with common things like seller buyback make it extremely uncompetitive in such an extreme sellers market.
My wife and I are still putting in offers on homes we see pop up that we would love to live in, but for the most part we feel like we are purchasing lotto tickets when we submit an offer.
We are pretty resigned to having to wait to buy a home until the current market conditions change.
email sent. I think getting through the bureaucracy is going to require a lot of persistence.
Thank you nelson. I am 99.9999% certain though that non-priority members are unable to use seller contribution to buy anything more than the 5 point cap. Doesn;t matter if the seller gives 10% at closing, and you give the full 7% you are allowed, 5 points is still the most you can buy down.
What you can do though is use the seller contribution to pay principle. Maybe someday the market will go back to a place that buyers have any leverage at all to request concessions! =)
It took a long time to come to that conclusion because there is a ton of conflicting info all over these forums. I believe the info conflicts because the policies have changes considerably in the last few years, and there is no definitive publication of current policy’s. I do wish that NACA’s official policies were more concisely updated and placed in an easy to access place.February 12, 2021 at 3:00 pm in reply to: Seller wants to stay in the house for 1 week after closing is this possible? #74249
Thank you Tim. We spent all day on this 2 days ago. We spoke to anyone we could get a hold of. We ended up losing the house. They went with a lower offer that was offering them the 2 weeks rentback. This is the 2nd house we have been disqualified from now because of the rentback clause.
The frustrating part is that is specifically says in the purchase handbook that exceptions can be made with permission in writing by management, but we just got stonewalled.
It’s getting very frustrating. My wife and I have decided to end our home search for the time being. With 12-15 offers (most significantly over asking) on every home the unfortunate restrictions of NACA are making it impossible for us to attract buyers. The biggest issues have been the 45 day escrow, and the 0 days rentback.
We’ll wait and see how the market changes over the course of the year and try again when sellers might have some insensitive to accept our limitations.
@nelsont I could be wrong here, but since he claimed that the max he can buy down is 5 points, I believe he is a non priority member. That would mean that 5 points is all he is allowed to buy down, regardless of if the seller contributes anything.
Also, if the market in his area is anything remotely close to like what it is in mine, asking the seller for anything at all right now is a total non starter.
Every house is getting 12-15 offers over asking, and most houses are going to people willing to waive the appraisal contingency. 45 day escrow is already a deal killer for most. =(
I am now having this exact same problem. Twice I have lost out on homes because the seller needed a short lease back period. We don’t even want to charge them for the moving days. We would just take possession 2-14 days after close, and be protected from liability through an addendum.
Even the NACA handbook mentions that an exception can be made my in writing by NACA management, but I am being stonewalled with “no exceptions” by everyone I speak with.
NACA purchase workbook states –
Lease Back Agreement – You are not permitted to lease/rent the property to anyone including the seller after the loan closes without an approved written exception by NACA management. Member must take possession of the property the day of closing and funding.
Both fha and VA loans require the home to be owner occupied, but they both have exceptions for a brief lease back period to give the seller time to move.
As far as I can tell, NACA is the only loan that has no exceptions or opportunity for a short lease back. Between the 45 day minimum escrow and the 0 leaseback days I am not sure how I am ever going to get an offer accepted. We don’t even want to charge them for the moving days. We would just take possession 2-14 days after close, and be protected from liability through an addendum.
February 10, 2021 at 12:54 pm in reply to: Seller wants to stay in the house for 1 week after closing is this possible? #74202
- This reply was modified 8 months, 1 week ago by grayfenix.
Apologies for resurrecting such an old thread.
Has something changed recently with regards to this? We made an offer on a home that requested they be allowed two weeks to move after close. They have a small baby and are moving out of state.
We contacted multiple people at naca and we’re told that there are no exceptions. We MUST take possession at the day of closing.
This seems unnecessarily restrictive.
bump for posterity,
and the hope of getting some badly needed information.
- This reply was modified 8 months, 2 weeks ago by grayfenix.
Bump for attention. Would love someone with NACA to chime in or ask some questions to higher ups about when (if ever) the conforming loan limits will be made current, or just updated to a more recent non-current.
2 Year old conforming loan limits in a booming market is doing the opposite of empowering NACA members.
@readingrainbow That is correct. Unfortunately the total purchase price of the home cannot be above the 2019 conforming loan limit.
Only the full purchase price of the home counts, regardless if you put money towards the principle to reduce the loan.
The size of the actual loan doesn’t matter. If a home price is 727k, and the conforming loan from 2019 is 726k (high cost areas), you CANNOT buy it through NACA, even if you put $1000 down.
NACA doesn’t have down payments, only principle reductions. It’s a distinction that they stick to that I don’t fully understand.
The frustrating part is how little send it makes for affordability.
There are 2 main areas we can buy in here.
One of them we can find occasionally find some houses around 720k, but they all have hoa’s from $400-500. We are allowed to make offers on those.
In another area, homes are between 740k-780k. These have no HoA and are considerably larger. We are not allowed to offer on these, even though they would be considerably cheaper payments.
In the last 6 months while we were going through the naca process we watched the average home price skyrocket. We have made 2 offers since we got qualified and were completely ignored on both. Both homes went for more than 30k over asking, which exceeded 2019 conforming loan limits. The competition in the market here is huge. The second home we offered on claimed to have more than 15 offers. And this was 2 days after it hit market.
I am beginning to wonder if we are going to be able to use a NACA loan at all unless we want to buy an 800 sq. ft. up and down attached condo in some of the worst neighborhoods around us.
I will also bump this topic because I have the same issue. I am in southern California, south orange county. Home prices have skyrocketed. The 2019 conforming loan limits are making finding anything suitable incredibly difficult. The radio silence from NACA on this issue when they are 2 years behind is very frustrating.