A surly mercenary character on a TV series once said that a doctor should be shot in the leg before he learns to take a bullet out of other people… I suppose so he can empathize with his patient. Well, that may be extreme but there is definitely a hint of wisdom there.
I’ve been practicing Real Estate for three years now, one with my dad here in Arizona, and two years in Idaho before my wife Sarah and I had gone back to school. Soon we will actually be making our first home purchase, and let me tell you, I am definitely feeling the above mentioned shot to the leg!
We are going through a unique first time home buyer’s program called NACA. If you have been following my good father’s Realtory musings for any length of time you probably have seen it espoused on more than one occasion. Here is a quick refresher:
- No PMI (saves a couple hundred bucks a month on your mortgage)
- No down payment
- No (typical) loan closing costs
- Lower than market interest rate (as of the time of this writing it sits at 3.875% Wowsers!)
- Good credit not required
Some may think as I thought when the program was first proselytized to me, “Well this is just way too good to be true.” I do regret to inform you, dear reader, that there is still no free lunch, not now, not ever. There is a cost to the wonderful benefits you see listed above, but not what you might think. What is the cost then?
Time and energy.
You see most loan programs require about a 30-45 day turn-around time plus a few obscure documents such as pay stubs and W2s etc. NACA takes this to a whole new level, taking anywhere from 3-12 months and demanding a wide array of documents you didn’t know you were supposed to have. These include bank statements, letters of explanation for any and all anomalies on your credit report, a detailed list of prior residences and much more.
In short, NACA makes molasses look fast and the lines at the MVD look fun!
I note all of the negatives not to dissuade any from trying the program, but to set up an honest expectation. It truly is a great opportunity for people who currently do not own a home (one of the requirements) and may have other factors inhibiting them from obtaining a traditional loan.
We are in the thick of it now, and it looks like they will officially qualify us in October or November. As a self-employed person, the process actually becomes more sluggish. The simpler your finances, the more simple the process should be, the key word being should.
If you know anyone who might benefit from this program, give us a call or shoot us an email, we can help them get started and counsel them as to what to be prepared for.