Hoping to Go Through NACA Again

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  • #46897
    greenday2018
    Member

    Hello!

    My husband and I are hoping to go through NACA again to purchase a new home. I went through NACA back in 2016 (bought in 2017).

    Is the current gap still 3 years? If so, how far in advance would anyone suggest starting the process? We’re planning on spending the next 6-8 months paying off debt and upgrading our home.

    We’re hoping to use the profit we make from our current home for our buy-down. Would the house need to be sold first in order for NACA to use toward our affordability?

    Thanks!

    #46898
    JHarris981
    Member

    @greenday2018 yes, it’s still 3 years. You could start the process as early as 2020 in terms of applying, but if you already have a home purchase amount in mind, you can start now with saving and of course paying down debt as it seems you’re already doing. Your current home would need to be sold by the time you close on your new home, so that gives you a bit of time. You can’t close on the new home until the current home is sold but it doesn’t have to be sold before you start the process again.

    #46906
    greenday2018
    Member

    Thank you for answering @JHarris981! Do you think they will want us to wait another 3-6 months for any reason?

    #46910
    JHarris981
    Member

    @greenday2018 you’re welcome. You mean wait another 3-6 months after the 3 years, so 3 1/2 years? I think that would happen if you have to demonstrate payment shock. That’s why I was saying you could probably start saving now, or start saving closer to the 3 year period if that’s easier. If you can demonstrate that you’ve already been saving the required amount for 3-6 months then I don’t think you would need to wait another 3-6 months. So at the latest I’d start saving that payment shock (if you’re planning to increase your monthly budget) around the 2.5 year mark, that way you’d have 6 months of savings right at the 3 year mark. You’ve already been through the process, so you can probably calculate how much you’ll need to save for the next home you want to purchase. It’s great that you’re already preparing!

    #46915
    greenday2018
    Member

    I was definitely thinking about saving the difference before we even start the process.

    Do you know much about including a spouse’s income/debt @jharris981? The loan is in my name, but we split the mortgage. Will NACA take that into consideration when they’re looking at our individual debt?

    #46916
    southflorida
    Member

    The financial picture of the whole household (Members over 18 years of age) is analyzed including income and debts.

    #47306
    pratik
    Member

    @greenday2018,

    What is the reason for buying a new house, if you do not mind me asking?

    Pratik

    #47312
    greenday2018
    Member

    Bigger space, different area… @pratik

    #47335
    TTrumble
    Member

    Hello greenday2018,

    JHarris981 and southflorida were right on the mark as usual. Some excellent advice. I always say it’s never too soon to start the process, and in your case starting in earnest about two-and-a-half years from closing on the first home would be a very good idea.

    The three year rule exists because we need our members to be in line with the mission of stabilizing neighborhoods. We do not want our members using NACA to flip properties but to become owner occupants. And the three year waiting period aids in that mission.

    One thing to keep in mind when it comes to selling the first home if you want to use the net proceeds for buydown on the new home: The funds you are going to use for buy down will have to be in your bank account before your bank application is submitted. Therefore, you will have to close on the first house and procees will have to be settled before the bank app can be done.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.copm

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