I am NACA approved and in home search phase, but I’m finding that a traditional mortgage might suite my needs better. I was warned that if I apply for a different mortgage product I would be dropped from consideration with NACA. Is this true? Would I be ineligible to apply for NACA again in the future?
I received 4 pre-approvals from different lenders not including NACA’s and they did not kick me out of the program. They made me write LOEs on why those companies pulled my credit, but that’s about it. In fact, I had a backup lender just in case things with south with NACA. I qualified for the Fannie Mae product at which I could get a no PMI loan, but they required me to buy it out. I ended up going with NACA because of the lower interest rate and no closing cost. If you’re dead set about going to another lender I would suggest going the Fannie Mae route vs. FHA. The terms on Fannie Mae loans are 10xs better than FHA. Also, if you’re a member, try your local credit union. Mine offered, a low interest rate, no PMI loan BUT it was a ARM rate and I didn’t want to take a risk on those although a lot of my co workers did and had no complaints.
I tried and my mortgage buddies tried and we wouldn’t find a lender to match NACA but we did find NO PMI products. Good luck on your decision.
I also got a prequalification from another lender, and had to write an LOE about the credit inquiry, but otherwise it’s going fine.
What made me stick with NACA was the realization that it’s now possible to do principle reduction before maxing out your buydown. Sellers weren’t taking 100% financing seriously, even when we were the highest bid, so being about to split our cash between downpayment and buydown made NACA worth it for us.
That, plus lower interest rates, of course.
I can imagine that the owner-occupancy requirement might be a snag for some, if they want the flexibility of being able to rent out their place in the future.
I’m a college professor, and if I get some term fellowship to teach or do research for a year or a semester somewhere abroad, my understanding is that an exception can be made on a case-by-case basis (similar to cases of temporary military relocation), so that option works for me. That said, the savings with NACA are so good that we’d probably just take the hit of paying double rent for 2-3 months if it came to it.