June 15, 2020 at 7:39 pm #69403MDPeach22Participant
I’m aware that we can purchase a new construction home through NACA but am having a hard time understanding the whole process and any possible setbacks in regards to the new home construction purchase process vs pre-existing home process with NACA — Ex: I won’t be putting in any offers but rather signing a purchase contract with the builder/sales agent and putting down a “hold” fee/EMD. Can others who are going through new home construction build explain please? How can I ensure 1) I will close on time once the house is built and won’t be subject to the per diem late fees 2) that I will get my EMD refunded to me at closing or used to buy-down my interest rate?June 15, 2020 at 8:00 pm #69405NelsontMember
You can’t ensure you will close on time for a thousand reasons most of them out of your control including but not limited to delays caused by the bank and your employer not answering the phone and letting for the final verification of employment.
The workbook does not prohibit but strongly suggests you should never agree to a contract that contains a per diem penalty unless there is a clause that specifically states any delay not caused by yourself will result in a complete waiver of all penalties and any void of contract by the builder not related to loan denial already issued results in a 100% refund of your emd.
Builders use scare tactics to skew the sale in their favor and the language makes it seem that way but the law is actually on your side and you play hardball with them they might back down and agree to your requests. And throw in upgrades and concessions to boot.
As far as getting your emd back for closing that’s just how it works. It’s not an additional down payment. It’s a holding fee applied to the down payment and subtracted from the amount due.June 15, 2020 at 10:54 pm #69407a3-owning2020Participant
I had a question about this as well. We’re getting a new construction home that is set to be complete mid-October. Looking over the 10 steps to homeownership, I see that after the housing search comes the purchase and sales contract and then the property condition before being submitted for credit access. Does that mean that we will remain at the sales contract step until the house is complete? Meaning we can’t go through credit access/bank app/etc. until the end? Is that how it works?June 16, 2020 at 9:39 am #69413
After your purchase and sales contract is submitted to your MC you will go through credit access, then you will complete the bank app. Once you have satisfied all conditions you will receive a conditional loan commitment. At that point you are on an effective pause until your home is close to completion.June 16, 2020 at 11:46 am #69416MDPeach22Participant
Thank you for your responses @Nelsont, @a3-owning2020 and @Kristijay. Basically, play hard and know what I’m up signed for in the sale contract before I sign and try to make sure I’m not held financially responsible for any delays in closing that are beyond my control.
As @Kristijay alluded to, most things are on hold for new construction until that home is fully built out and delivered. So then the closing process starts after home delivery? What does it look like at that point? how quickly will BoA move on conditional loan committment that was instated 6-9 months prior to the new home being built?June 16, 2020 at 12:32 pm #69420TTrumbleMember
Hello MDPeach22 and a3-owning2020,
It doesn’t mean halting the NACA process at all.
Even on new construction, the appraisal and inspections etps still happen. The initial appraisal will be once construction has actually started and will actually be based more on the plans for the house. It proves that the home is actually going to be built and will no doubt at least be likely to fall into the price range appropriate for the sales price.
After that appraisal comes back, you may proceed with the bank application. There will be another appraisal and the inspection when the home is about 90% complete and of course the local code inspector for issuance of the certificate of occupancy.
The fact is that the vast majority of time the Clear to Close comes well in advance of the home being completed and you end up waiting on the Certificate of Occupancy being issued in order to close.
Online Operations, NACA
firstname.lastname@example.orgJune 16, 2020 at 1:17 pm #69427
@MDPeach22 I can only speak on my experience. I have been issued a conditional mortgage commitment with about 4 conditions that have to be completed when my home is close to being completed (insurance, voe, paystub etc). As to how quickly it will be handled…who knows. I’m hoping I’m in the vast majority of those that TTRUMBLE states has their Clear to Close well in advance. My builder refused to remove the per diem, so I worry about the same things as you. All I can say, is make sure you have a realtor working on your behalf and stay on top on your responsibilities to avoid any self imposed hiccups. Good luck!
June 16, 2020 at 5:39 pm #694512BLESSEDMember
- This reply was modified 1 year, 3 months ago by Kristijay.
The problem with the builder not removing the per diem is risky. If you are issued the clear to close and everything goes smoothly you have nothing to worry about. The problem comes in when the bank finally completes your loan. NACA has no bearing on how fast the bank works and I have seen many files escalated to get to closing. I was fortunate and did not have per diem in my contract and a clause that stated for whatever reason my loan doesn’t go through (we were sure it would), I would receive my earnest deposit back. I had problems with my appraisal which generated a Change of Circumstance. The COC took a week before it was processed and delayed my move in date. The builder had agreed to the lower price but the bank requested another appraisal after the it was appealed by the seller. This generated another COC and now it is two weeks behind my move in date, just to let you know anything can happen but I eventually got my keys a day before Covid-19 shut our Naca office down. Please prepare yourself so you don’t have a hugh per diem bill at closing.July 13, 2020 at 7:53 pm #70357
Hi All! So I’m trying to see if I can get some feedback/help since I’m in the new construction process as well. I’ve been credit access approved and am under contract (with a December delivery date), but have been stuck at “Lender Status: Underwriting-Pend Incomplete” for almost 2 weeks now in my web file. I keep getting conditions that pop up and disappear without my intervention, and some conditions that I have addressed that are still sitting there. What can/should I do to help push things along? My MC is usually great about responding to me, but I haven’t heard from her since the day before my file was sent to the BoA underwriters. Any help or advice is greatly appreciated!July 13, 2020 at 8:04 pm #70361NelsontMember
Quite often conditions pop up for internal purposes. They are not for you. They are for the MCs and the underwriters. Your file will probably sit pending incomplete until December. Underwriting cannot be completed until the final appraisal is done when the house reaches 90% completion. You can simply email your MC and ask if there is anything you can do to help push your file along but chances are you are in the no news is good news phase.July 14, 2020 at 9:17 am #70384
Thanks for the info @Nelsont! Based on some of the other posts I’ve seen, I was under the impression that I would sit at approved with conditions for an extended amount of time as opposed to incomplete. I know the process is a bit different with a new construction than an existing home, so I just want to make sure I’m doing my part to help make things progress.August 3, 2020 at 9:53 am #71037
Hi all! So I finally moved out of the incomplete status and am finally in the Approved w/ Outstanding Conditions status now! One of my conditions is to let the lender know when to order an appraisal for the home. I see above that there are two appraisals that are done for new constructions, but is this condition for an initial appraisal or a final appraisal to be done? And would I get this date from the builder or someone else (realtor, MC/CC, title company, etc.)? They are scheduled to break ground next week with a completion date in December (pending no delays). I just want to make sure I’m staying on top of things even while I have a small breath of fresh air with NACA lolOctober 6, 2020 at 7:53 pm #72187
Just to circle back on this topic and TTrumble’s response with my experience. My certificate of occupancy was issued on September 18, but I am still waiting on my clear to close 18 days later. My MC/CC would not order the final appraisal until after the COO was issued. So, it would have been impossible to receive a clear to close well before the home was complete in my case. It may be different for you, but I wouldn’t count on it.October 6, 2020 at 8:28 pm #72188
@Kristijay oh no! 18 days is a long time to wait for your CTC. I spoke to my MC a couple weeks after my last post and she informed me of the same thing about not ordering the final appraisal until the COO was issued. The only difference is that the plan is to have everything done and get the CTC final within 11 days of issuing the COO. Do you have all of your other conditions addressed? If so, I hope you can get in touch with someone about pushing things along. I pray you get your CTC soon!October 6, 2020 at 11:47 pm #72194
@JayCee28 I called the mortgage department today and was told that the closing date noted in my file was Oct. 31. I’m not really sure why it would take that long when everything has been completed. I emailed my MC, CC and the regional manager and I was told that all conditions have been addressed by BOA and my MC was going to escalate my file for review. No word yet though. Thanks for your prayers! I’m ready to get off this ride.
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