Naca Loans: An Option For Manufactured Home Buyers?

NACA, or the Neighborhood Assistance Corporation of America, is a non-profit organization that provides affordable homeownership opportunities to low- and moderate-income individuals. NACA offers a unique mortgage program with no down payment, no closing costs, and below-market interest rates. This program is available for various property types, including manufactured/mobile homes, and transaction types such as pre-existing or new construction. NACA's eligibility criteria focus on those with incomes below the median for their area and those purchasing in low-to-moderate income areas, ensuring that its benefits reach those who need them most. NACA also provides ongoing assistance and coordination throughout the renovation process, making it an attractive option for those seeking to achieve their dream of homeownership.

NACA Mortgage Eligibility Requirements

Income Limits

NACA focuses on low-to-moderate income homebuyers, called "Priority Members," and low-to-moderate-income areas, called "Priority Areas." Priority Members are those whose income is less than 100% of the median income for the Metropolitan Statistical Area (MSA). They can purchase a home anywhere. Non-Priority Members have an income equal to or greater than the median income for an MSA and must purchase in a Priority Area.

Property Type

NACA mortgages can be used for various property types, including single-family, condominium, multi-family, mixed-use properties, and co-ops. NACA also offers mortgages for manufactured/mobile homes and modular homes. However, it is important to note that NACA Homes, which are factory-built modular homes, are not considered manufactured homes and have separate purchase price ranges.

Occupancy Requirement

The property must be the primary residence of the member and occupied by them over the life of the NACA mortgage. NACA takes out a lien on the home to ensure this requirement. This does not prevent members from selling, refinancing, or purchasing additional properties, as long as they meet the occupancy requirement.

No Ownership Interest in Other Properties

No member of the household can own any other property at the time of purchase. This is a crucial requirement for accessing a NACA mortgage.

Participation in NACA Events

To be eligible for a NACA mortgage, members must participate in five actions and activities per year, including at least one prior to NACA Qualification and one prior to closing, to achieve NACA's mission of economic justice.

Membership Terms, Participation, and Eligibility

Members must be willing to abide by NACA's terms of membership, participation, and eligibility. This includes attending a free Homebuyer Workshop, either locally or online, as the first step in the NACA Purchase process. Members must also be willing to provide the required documentation and work with a NACA Counselor to determine their financial readiness for homeownership.

NACA's Mortgage Eligibility Requirements focus on assisting low-to-moderate income individuals and expanding access to affordable homeownership opportunities.

NACA Mortgage Interest Rates

NACA, the Neighborhood Assistance Corporation of America, offers a range of housing programs to assist low- to moderate-income individuals and families in purchasing a home. NACA's Best in America Mortgage is a unique product that offers a fixed interest rate below the market rate. This means that members benefit from a lower interest rate than they would typically find elsewhere.

The NACA Mortgage is available for a variety of property types, including manufactured/mobile homes, and transaction types, such as pre-existing or new construction. NACA does not disclose its specific interest rates online; however, they emphasize that their rates are below market rates. This is achieved through NACA's legally binding agreements with major lenders, allowing them to customize mortgage lending to meet the needs of working people.

The NACA Mortgage also stands out by offering zero closing costs. Typically, eliminating closing costs in other mortgage products results in a higher interest rate. However, with the NACA Mortgage, the lender pays all closing costs, including appraisal, title, and fees, without adding these costs to the loan. This feature further enhances the affordability of the NACA Mortgage.

Additionally, NACA offers a 15-year wealth-building loan as part of its mortgage product. This option enables members to build wealth or equity rapidly within a 15-year period. Due to the structure of the loan, a minimal portion of the mortgage payment goes towards interest. As a result, members can typically build up almost fifty percent equity within about seven years.

NACA also provides a mortgage calculator and housing counselors to assist members in determining an affordable mortgage payment. The calculator takes into account the principal, interest, taxes, insurance, and HOA fees to help members understand their potential financial commitment. NACA's housing counselors work closely with members to review their financial situation and determine a mortgage payment they can comfortably afford.

NACA Mortgage Types

The NACA mortgage is a no-down-payment, no-closing-cost home loan provided by the nonprofit organization, the Neighborhood Assistance Corporation of America (NACA). NACA mortgages are geared towards low- to moderate-income borrowers, helping them access affordable loans with favourable terms. The program also provides housing education to borrowers.

NACA mortgages are available for a wide range of property types, including single-family, condominium, multi-family, mixed-use properties, and co-ops. The types of transactions covered are pre-existing, new construction, manufactured/mobile homes, and modular homes.

NACA mortgages are unique in that they do not consider credit scores. Instead, they focus on what they call "character-based lending," taking into account a borrower's history of payments that are within their control. This approach allows NACA to exclude payments for unaffordable medical bills and predatory loans.

NACA offers two term lengths for its mortgages: 30-year, 20-year, and 15-year. The interest rates for these mortgages are below market rates, with the 30-year fixed-rate mortgage at 6%, the 20-year fixed-rate loan at 5.5%, and the 15-year fixed-rate mortgage at 5.375% as of January 15, 2025. These rates are significantly lower than the national averages.

NACA also offers a wealth-building loan with its 15-year mortgage product. This option allows members to build up equity rapidly, with approximately 50% equity built up within seven years.

In addition to the interest rates, NACA mortgages have other attractive features. There are no mortgage insurance requirements, and NACA has legally binding agreements with major lenders to customize mortgage lending to meet the needs of working people. NACA also provides ongoing assistance and coordination to homeowners during the renovation process through its HAND program.

NACA Mortgage Process

NACA (or the Neighborhood Assistance Corporation of America) is America's largest and most effective organization in providing affordable solutions for homeowners with an existing unaffordable mortgage. NACA has legally binding agreements with major lenders to customize mortgage lending to meet the needs of working people and those locked out of affordable homeownership.

The NACA Mortgage is available to all homebuyers, with a focus on low-to-moderate-income people and people purchasing in low-to-moderate-income areas. The mortgage can be used for a wide range of property types, including single-family, condominium, multi-family, mixed-use properties, and co-ops.

The NACA Mortgage Process involves the following steps:

• Attend a Homebuyer Workshop: This is a free educational forum open to everyone, where you'll learn about the home-buying process, real estate issues, and mortgage options.
• Become NACA Qualified: This means you're pre-approved for the NACA Mortgage and ready for the housing search. The qualification process includes uploading and reviewing documents, completing a budget, and attending counseling sessions.
• Attend a Purchase Workshop: These workshops provide information on the home purchase process, identifying properties, addressing repairs, obtaining NACA Credit Access Approval, and submitting your NACA Mortgage loan application.
• Find a Property: Once you've found a property, it must be inspected by a qualified NACA-approved home and pest inspector to determine its overall condition.
• Meet with your Mortgage Consultant: You'll need to be approved for NACA Credit Access, which requires verification that you're still NACA Qualified.
• Submit your NACA Mortgage Application: Your licensed Housing Counselor will complete and submit your application to a participating lender.
• Closing: This process ensures you have the support necessary to address any issues or questions about loan terms. NACA aims to close loans within 28 days of the executed Purchase and Sales Contract.
• Post-Purchase Assistance: NACA provides ongoing assistance through its Home and Neighborhood Development (HAND) department, helping homebuyers with repairs and renovations.

NACA Mortgage vs Other Mortgages

NACA is not a mortgage lender, but it does offer extensive counselling and application services to prepare its members for homeownership. NACA partners with banks, including Bank of America, to provide funding for its mortgage program.

The NACA Mortgage is unique in that it is the only mortgage with no closing costs. The lender pays all closing costs, including appraisal, title, and fees, without adding these costs to the loan. The NACA Mortgage also offers a below-market, fixed-interest rate. This is in contrast to other mortgage products, where the elimination of closing costs results in a higher interest rate or additional costs.

NACA's mortgage product is available to all homebuyers, with a focus on low- to moderate-income individuals and those purchasing in low- to moderate-income areas. NACA does not consider credit scores but instead uses "character-based lending," evaluating each applicant's creditworthiness individually and considering their history of payments and financial circumstances.

The NACA Mortgage also provides flexibility in the types of properties and transactions eligible for financing. This includes single-family, condominium, multi-family, mixed-use properties, and co-ops. Additionally, the NACA Mortgage can be used for pre-existing, new construction, manufactured/mobile homes, and modular homes.

NACA also offers a 15-year wealth-building loan, allowing members to build equity rapidly. With the NACA Buy-Down option, members can further reduce their interest rate, making their mortgage more affordable or allowing them to purchase a higher-priced home.

In summary, the NACA Mortgage stands out from other mortgages with its lack of closing costs, below-market interest rates, focus on affordable homeownership, flexible property and transaction types, and optional interest rate buy-down feature. These features make the NACA Mortgage a competitive and attractive option for individuals and families seeking to become homeowners.

Frequently asked questions