New build down payment

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  • #79220
    Mercadodc
    Participant

    Looking at new builds today. The builder gave me some information stating that if we go with the preferred lender the escrow is only 4% if we use outside lending we have to put down 10%. Has anyone ran into this and does NACA help with this.

    #79221
    Nelsont
    Member

    This is not technically legal. Without a government regulated program (hello NACA) the buyer is allowed to choose. It’s a commission based sales tactic. The sales office gets higher commission this way. You will rarely if ever hear naca positive information from any builder for this reason. The sales office is focused on their personal income and top line. The corporate business is focused on bottom line and would much rather sell all units at low profit than some units at high profit.

    Call the corporate office, probably the headquarters. Go over the sales office head. Don’t speak to a salesman. There’s a good chance they honor the sales office rates with the NACA requirements and they might even throw in some upgrades to boot. Even if the sales office says that’s not possible.

    And to answer your question you are required to use nacas lender without exceptions and they will not provide grants. There are grants you can get but you need to apply yourself. They are not affiliated with naca or bank of America.

    #79222
    Mercadodc
    Participant

    Thank you Nelsont. Didn’t seem right but wanted to see if anyone else had heard this before.

    #79225
    Kristijay
    Participant

    I closed on new construction in 2020. The deposit for using their preferred lender was less expensive than the one required for using any outside lender including NACA. It was written in the contract and very much legal.

    #79226
    Kristijay
    Participant

    I would clarify whether they were referring to a deposit or a down payment. Your title days down payment, but your post indicates it would be applied to escrow. A downpayment, if required, would not be held in escrow. It would be applied to your principal at closing. The deposit on the other hand woukd be required upfront and could be applied to your escrow or prepaids. Additionally, there is no down payment required for a NACA loan. It is a 100% financed, conditional loan. Sounds like you might have your terms mixed up.

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