NACA..Does it Really Help?? (Series)

Good morning. Pardon my two week break. We suffered a great loss in our family and I needed to direct my attention to healing and being with family. I am sure you all can understand. Also, I apologize in advance for the rather long post this week. But if you are considering NACA or even purchasing your first home and want to know your options - take the time to read this post. This will be the first of a what will probably end up being multiple posts.

When Jay and I started with NACA (Neighborhood Assistance Corporation of America), we were just starting to think about purchasing a home. Purchasing a home was definitely in our plan. We had it listed as a goal but didn't have a timeline on when we would pull the trigger and buy a house. I mean our rent was steadily increasing and so many people were telling us that we could buy a house for less than what we paid in rent per month. You know the whole - see your money invested into something that is yours versus giving your money away. It seemed coincidental at the time (mostly God) that my mother was at a meeting for her union where a NACA representative presented and so my mother introduced us to the program. Brilliant!!🙏🏽

So, off we went, along with my Brother, Jay and I attended the NACA Homebuying workshop in August of 2013. We listened to the program highlights, benefits, and the downfalls. The nice thing about the workshop was that they had a prior NACA member speak about their experience with NACA. He was very honest, at least I felt he was, about his experience. He noted some good things, the bad things, and the things that probably were his fault with his overall experience. Ultimately he had ended up with his dream house. Based on everything we had learned, we decided that we would at least attend a one-on-one meeting with a mortgage counselor. I mean what could be the harm in that. 

After the workshop, we began setting up our online profile and scheduling a one-on-one meeting. We were a little bummed to learn that the earliest we could get a meeting was October. I mean after getting us all jazzed up and stuff. 😔 We decided that the outcome of the one-on-one meeting would be the deciding factor of whether or not we would actually go down this path to buy our first home together. I mean the NACA promises of   no closing costs, no down payment, and the locked in PMI  - were all huge selling points to us. Those are all the things that scare a first time home buyer. At least they scared Jay and I. Neither one of us had ever purchased a home. I have made plenty of other purchases, like cars. But those seem so nominal when you talk about purchasing a home. I mean a home comes with a commitment of 15, 20, or even 30 years. Depending on how you structure your mortgage. 😳

Continuing with the preparation for the upcoming 1:1 meeting, we started with the workbook. Oh - I forgot to mention, they hand you a thick workbook at the workshop. Ok so maybe that is a bit of an exaggeration, but it sure felt like it. I remember being kind of overwhelmed by the level of detail for each page. The workbook will become your guide throughout your entire process with NACA. This workbook outlines the entire process from start to finish and includes worksheets. Thus we knew we had to begin doing the first steps of the workbook. Since the costs were minimal to begin this part, we felt it was still not too big of an investment to consider - even if we weren't 100% sure we were going to proceed.

I pride myself on being the CFO of our home. And by that I mean, I pretty much keep us on track with our monthly budget, and financial goals. But even for me, the budgeting exercises with NACA were eye opening. They helped me to take a deeper dive at our daily expenses, our debt load, and to evaluate if our currently monthly budget was actually working for us. I'll be frank - we pretty much had a free life. And by free, I mean all of our bills were paid, we managed our debt load, and we had no worries. We had savings, we had investments into our retirement, and we had security with our jobs. But this budgeting exercise made you think deep into your future and planning for "life bumps". You know those unexpected shake-ups that happen in life. I mean the budget process will make you account for every dime of your pay. And then it will make you look at every expense and break them down into categories of importance. NACA asks you to build your online profile and fill in certain items. You have to pay a membership fee and pay for a credit report. We ended up paying $14 for our credit report since we are married. In addition, we had to upload our most current financial details - including paychecks, W-2s, and other pertinent information. I'll be the first to admit, it did seem a bit intrusive but after learning more about home buying the traditional way - it is all intrusive. 😩 The budget component really intrigued us. This exercise allowed us to take an in-depth look at our finances and determine what we really can afford in a monthly mortgage payment. It was pretty eye opening. It didn't make us run from the program, but I will be honest - we both thought this may or may not work out for us. The other thing with this system is it is pretty antiquated. It's ok from your end, but it is pretty slow on your mortgage counselor's end.

SO, we attended our first meeting with our mortgage counselor in October of 2013. Being excited about the potential of getting qualified and the factors that went into planning and preparing us for a mortgage, we went into the meeting with an open mind. I won't lie - we were seeing stars about being homeowners. We really liked the mortgage counselor she was down to earth and very well spoken. She laid everything out on the line for us. And gave us her perspective on what it would take for us to become homeowners through NACA. Overall, the results weren't bad. She provided a review of our credit report and guided us on what we would need to fix and work on before we would be considered for the qualification process. The list we got wasn't bad but it was going to take work to complete. The positive thing for us, our mortgage counselor was pretty confident we could get approved by the end of the year. We thought that was pretty amazing! Considering, we had heard that it took some people a year or so to even get qualified. I know, pick  your mouth up off the ground. At least, I had to do that when I heard that timetable.

Here's the work we needed to do for qualification:

• Work on resolving any of the negative items on our credit reports - I will be quite honest here. There was stuff we didn't even realize was on ours. A few miscellaneous medical bills and other nonsense from back in our younger days. We even had a few things that didn't even belong to us. 
• Volunteer - You need to have a # number of volunteer hours before you can get qualified. Our goal was to knock these out right away. There are various ways to volunteer.
• Financial documents - we needed to secure tax documents, W2s, paychecks, bank statements from the past 2 years. And continue to submit monthly payroll statements until we were qualified.
• Budget - Continue working on our budget and the agreed budget we made with our counselor.

I mean that list seems cumbersome but even the traditional mortgage route can be daunting, at least from what I have read. This is where you have to be a diligent and organized person. I can't stress enough about keeping your copies and making sure you have a routine schedule for uploading documents to your online profile. And keeping your electronic files organized. We learned very early on that you need to upload everything they request but come to meetings, with your mortgage counselor, with copies of everything. I had a binder that I kept with everything and electronic copies of files so that I could email right to our file.

The last thing we did at our 1:1 meeting was schedule a  follow-up appointment scheduled for mid December. Keeping in mind that we had to have everything listed above completed. Otherwise, we would not get considered for qualification. So here is where the fun begins…stay with me for part 2 of this post. Especially, if you want to learn more about how NACA really works. I promise to share everything we know, learned, and would do over.