Priority vs. Non-Priority Member Question

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  • #66917
    HeatherM
    Participant

    Can someone please explain to me why members who are above the median income are limited to the amount they can buy-down but those who are below can buy down to virtually nothing? This hardly seems fair and puts severe limitations on what those that fall just above the median income are able purchase as well as buy-down.

    Additionally, it also seems silly that NACA require you to put in the seller buy down in a PSL request prior to submitting an offer. With everything going on re. the CV-19 most sellers wont show a property unless the buyer has an approval letter in hand and and NACA buyer’s can’t get an approval letter unless they’re planning on making an offer and include any seller buy-down. How do they expect the buyers to begin negotiations prior to seeing a property and assessing what that offer may be?

    #66919
    Nelsont
    Member

    Naca doesn’t set the buy down limit for non priority members it’s a federal HUD requirement applied to programs like naca to prevent the system from being taken advantage of.

    The official federal government designation of people whose income is above the median is considered moderate to high while those below are considered low to moderate.

    These programs are designed to help low to moderate income levels because in many cases that amount of income can neither afford a house through traditional means nor come anywhere close to saving for a down payment.

    The general thought is that if your income is moderate to high as defined by the federal government then you can both afford a house and save for a down payment without making much if any sacrifices. Thus in most cases these individuals are not even eligible to apply to these programs. Naca benefits everyone.

    The rules of the psl are in place to prevent people from even trying to buy a house they can’t afford. You seem like you have it together but, keep in mind a relatively large percentage of naca members have very little or no prior knowledge and need to have their hands held through the process and be told what to do. Don’t look at this as preferential treatment to low income buyers. It’s not. Naca treats everyone the exact same way whether they make minimum wage and have a 550 credit score or make 200k per year with an 800 credit or as in my case have even bought multiple houses before naca and come into the system a seasoned veteran.

    The psl is your initial offer. Things can change. They almost certainly would even without covid19. But it’s so you and your MC are on the same page.

    #72127
    ak540
    Participant

    What is the buy down limit for non priority and priority members?

    #72128
    Nelsont
    Member

    The buyer is allowed to contribute up to 5 points (5% of the purchase price of the house).

    Down payment assistance grants are considered part of the 5 point limit from the buyer.

    The seller is also allowed to contribute up to 10 points on top of your 5.

    Additionally if your income is below 80% of the MSA median income in which you are buying then your interest rate is automatically reduced by 0.5% even on top of the maximum buy down.

    #72139
    theman85
    Participant

    So does that mean that based on the current interest rates, non-priority members can get their interest rate down to .125%?

    #72156
    ltooks
    Participant


    @nelsont
    Hi I am a little confused by your .50 statement. I thought only in certain cities when you are below the msa you receive that reduction. Please tell me I am wrong.

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