We’re increasingly hearing of agents with clients who are insisting on using the NACA program to buy a home. For some, it’s the only logical path to home ownership. But how exactly does a NACA mortgage work, and is it right for your clients?
The Neighborhood Assistance Corporation of America (NACA) claims to offer “America’s Best Mortgage.” Many agents, however, beg to differ as to whether the NACA mortgage is truly as great as it sounds.
No, they don’t take issue with the idea behind the NACA mortgage – the fight for economic justice and making “the dream of homeownership a reality for hundreds of thousands of working people,” regardless of credit and asset issues.
What they find objectionable are all the hurdles agents have to scale and the extremely lengthy escrow period.
“My seller almost took her house off the mkt. It took 5 mos. to close,” says one listing agent in a post on Facebook.
“NACA is the largest HUD certified counseling organization in the country and provides about a third of all counseling, according to the organization’s website. Their aim is to provide mortgages that provide the same terms to all borrowers. These include:
Buyer’s must agree to “join” NACA and are required to pay a $25 fee per family, per year. Since members are “… required to participate in advocacy or other activities,” they must also be registered to vote.
To learn more about NACA, how it started and how it’s “making history,” visit naca.com.
Aside from being a “nightmare” transaction, according to several agents, there are things agents should know going into the process with a client.
NACA urges their members to request the removal of the following from the purchase and sale agreement:
Buyers are also required to ensure that the contract contains:
We’re increasingly hearing of agents with clients who are insisting on using the NACA program to buy a home. For some, it’s the only logical path to home ownership.
Aside from protecting yourself by getting the aforementioned signed buyer’s representation agreement upfront, NACA has some hoops for you to go through as well.
Oh, and NACA strictly enforces the procuring cause stuff, so it’s important to find out if your buyer has been in contact with NACA before coming to you.
If your client “has been involved with or been in previous contact with NACA at the time the Member [your client] is referred to the Program, you will not be able to register them to your name,” according to the organization’s website.
A lot of what you’ll need to do to retain your buyer is outlined on the website and must be accomplished before your client attends the workshop. You’ll find that information here.
“NACA pushed hard for us to work with an in-house NACA Realtor,” according to an unnamed buyer at FinancialFinesse.com. By the way, this article gives an amazing overview of the NACA program, from start to finish, from the buyer’s point of view.
NACA is currently recruiting in-house agents to work with buyer participants. The stated compensation range in their job ad reads:
“$60,000 to $100,000+ (100% Commission with ability to exceed $100,000)”
Although the ad claims that the agent maintains independent contractor status, it also states that “The NACA Agent position is a full-time job working approximately 50 hours a week and as necessary to meet the demands of the job.” That and the bi-weekly paycheck sound suspiciously employee-ish.
Speaking of pay, agents earn a “fixed amount per closed loan … and is not based on the house price or the amount received by NACA.”
You can learn more about the process of becoming a NACA in-house agent at workforcenow.adp.com.
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