Monthly mortgage

[Whall6]

I was recently qualified. I understand that naca does NOT calculate overtime in your affordability. My base salary puts me under the msa for the city I want to buy in. But somehow im still a non priority member. Its seems as I’m being penalized as a higher income earner because of overtime, but my mortgage affordability seems to be based on my base salary. I have very little debt. As a non priority member in the state of MI, you can’t move anywhere. How can it be both?, under the msa AND non priority?

[Nelsont]

Double check your action plan from your very first intake session. What monthly payment is listed? Is that 31% of your base salary? Does that monthly payment equal your qualified monthly payment, not your estimated loan amount? How consistent is your overtime? Overtime by default is not included in your affordability but it can be under certain circumstances. Lastly double check your action plan for your intended MSA of purchase. You are qualified for the MSA in which you currently live so if you want to purchase in a different city that could also be a reason.

[Kristijay]

The answer is that it is indeed both. NACA determines your affordability and their guidelines are to ensure that your qualified mortgage payment is based on consistent income that is guaranteed. So, they only count your base income unless your employer indicates that it is guaranteed on your VOE form and you have prior history of that overtime. On the other hand, priority and non priority status is enforced by the lender, BOA. The agreement between NACA and BOA was to help low to moderate income people obtain affordabale loans and neighborhood stabilization. So when you get to mortgage process and your income indicates that you are above the median for the MSA that you are purchasing in, that is when you would no longer be eligible for the lower interest rate that BOA agreed to give to priority members based on the agreement with NACA regardless of how your affordability was determined.

[Kristijay]

There have been several people who thought they were priority because their overtime was not included in their addordability, only to learn that they were deemed non priority when they got to mortgage process with BOA. What I’ve seen happen in SOME of those cases is that they may be granted an exception to purchase the property that they no longer qualify for as a non priority member (tract >100% of the MSA), but at the non priority interest rate.

[Pure1]

Kristijay:
Your insight and knowledge on this matter is incredible. May i ask how you come to know this issue so intimately?
Some of what you say might apply to my particular situation.

[Kristijay]

@Pure1. I closed with NACA in 2020, studied the qualification workbook,and have been an active member on the Unofficial NACA FB page. You learn a lot by reading other people’s experienced amd applying it to what you know.

[Whall6]

@kristijay sucks for me, I can’t even purchase in city I currently live in. I was told I would be able to purchase in my desired city. Since I’m being double penalized, these last 6 months were a total waste of everyone’s time. NACA should discuss HOW they determine if your priority or non at the very first intake meeting. I’ve plugged in about 11 different areas in the msa, can’t live in any.

[Nelsont]

@Whall6 per @kristijay Naca does not determine priority/non priority. Bank of America does at their own discretion meaning whatever naca tells you Bank of America can possibly say “nope”.

Also you can purchase anywhere. Don’t let status get you down. You sound like you have a defeatist attitude. If you want the lower interest rate or want to live in certain neighborhoods and all of that is unaffordable with the higher interest rate then just imagine how much less other banks would offer. Take this as an opportunity to build wealth. You never know. Once you get boots on the ground you can find something you love. You can always move later on.

[Kristijay]

@Whall6 I’m sorry. Have you tried searching for tracts within the MSA that you are looking to purchase? Go here https://www.ffiec.gov/census/default.aspx and look up your city. You can still purchase in tracts that have a median household income that is <100% of the MSA. If you can find a tract that has a median household income less than 80% of the MSA, then you can qualify for the lower priority interest rate. Don’t give up just yet.

[Pure1]

Kristijay thank you for your response.
I try to soak up as much knowledge as I can and see what applies to my particular case. I also try to be discerning because I have encountered many posts where people unintentionally give incorrect info.

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