By Mike Bodeen · 13 July 2020
Over the last few years, the Bodeen Team has promoted the greatest loan on earth provided by the national advocacy group known as NACA, the Neighborhood Assistance Corporation of America. The loan is to benefit low to moderate income buyers and came about as a result of big banks getting busted over 30 years ago for predatory and discriminatory lending. These big banks have placed over 10 billion dollars to make these incredible loans.
Why is this loan so incredible? Let’s count the ways:
No Down Payment
No Mortgage Insurance
No closing Costs
No points or fees
No credit score consideration (There is qualifying involved, however)
Below Market 30 year and 15 year fixed rates
Without question, there’s no question this loan is unmatched. That’s the good news.
Getting to the goal line, however, is a different story. What’s required by the buyer, Realtor and title company is Patience, determination, patience, understanding and finally, patience.
This year, the BodeenTeam will have closed 4 NACA loans by the end of this week. Few other agents in the country, and certainly Arizona can rival that. We believe in the program and it works – when it works!
As a volunteer prison preacher for Along Side Ministry I have contact with men and women coming out of years, even decades of incarceration. In some ways for these formerly incarcerated, this miracle loan is easier to get than a rental.
“…There was a problem though. In the 2-3 months that Merl had locked in the value of his home, that value probably increased $10,000 to $15,000, or more…”
Two clients, Tremaine and Merl, (not real names) just went through months of trying to close on a home with a new NACA loan but with two very different results:
Tremaine started the process 4 months ago, but in his case, he needed a longer close because of the seller’s need for a longer closing. No problem there. He was buying a home in Glendale for $185,000. And as mentioned above, there was no down payment, closing costs, etc. And the final interest rate he got on a 15 year loan after using $6000 of his personal funds, was 0.125%. That’s right, you heard me correctly.
Merl on the other hand, did not have the same positive outcome, NACA-wise. After months and months of looking for a home for Merl, and after having made three offers that didn’t fly for one reason or another, we finally came across a townhome in Surprise, a really nice community with 3 bedrooms, 2.5 baths, 2 car garage, nice neighborhood amenities, etc – for a tad over $200,000. Merl’s home closes this week-but not by NACA.
Merl started this escrow process 3 months ago. Everything went fine until the NACA lender, Bank of America, decided they didn’t want to loan in this community. Why? Because there was an existing lawsuit filed by 10 plaintiffs against the HOA. This went back 6 years ago involving a dispute about who should pay for the landscaping. Mind you, there’s more to it than that, but many other lenders have loaned in this community since this lawsuit started, which is still in place, though nothing has transpired for two years, and the plaintiffs and their attorney don’t much seem to care. We contacted the plaintiffs, their attorney, the HOA (2) companies, etc, but in the end BofA said no way. For a lender who’s supposed to fund (NACA) loans for the little guy, they put the kabash on Merl’s deal.
Now Merl had a choice to make – start the house hunting process again using NACA or get a conventional loan and close on his current home. There was a problem though. In the 2-3 months that Merl had locked in the value of his home, that value probably increased $10,000 to $15,000, or more. Valley inventory supply was at 13,500 when he went under contract on the home. It’s now under 8000. What he would now find for the same price would break his heart.
He wisely chose to find a new lender, get a conventional loan with 3% down, and with a still great rate of 3.5%. In the end, we referred him to our A+ lender we most often use, she got him approved to close within 3 weeks, and he will get a great property at a terrific price, but paid out thousands in closing costs.
Will I use NACA/BofA again? Probably – if my patience returns.