Learn the NACA Home Buying Process



NACA – Neighborhood Assistance Corporation of America currently partnering with Citi Mortgage and Bank of America to assist with low interest fixed rate loans for purchase, purchase and rehab and refinancing. NACA (non-profit and HUD certified counseling agency) is able to provide what they call “America’s Best Mortgage” program for first time home buyers. The program provides borrowers with the tools and education for the biggest purchase of their lives with housing and purchase workshops, one-on-one counseling, financial Counseling, credit Resolution *NACA does not do credit repair, house hunting, property valuation and Membership Assistance Program (counseling and financial assistance for NACA homeowners) 

Many buyers and real estate professionals are unaware of the NACA program because the program is mostly targeted and advertised by their past clients or the America Save Program (program to assist current homeowners lower their mortgage payments to lower interest rates)

I am an advocate and I continue to learn about new programs that will help my clients into their first home. With the maximum loan amount in the Washington Metro area being $417,000, there are many options for real estate.

The NACA policy for qualifying for a mortgage loan is to qualify based on maximum monthly mortgage with includes principal, interest, taxes and insurance vs a total loan amount. This is due to each property has unique costs with requires to yearly taxes, homeowner association or condo fees. A property in a different county could be the same price but in another county the taxes could vary sufficiently.


What are the qualifications for a NACA loan?

Ratios: 31/40 [Front End Ratio is used for household expenses. For the NACA program, the front ratio is 31%. Back End Ratio is for housing expenses plus additional recurring debt since as auto loans, credit cards, student loans of other items. The back end ratio is 40%.

For example, say you made a gross income of $65,000 last year before taxes. Let’s take your yearly income and divide by 12 to find the monthly gross income amount. Gross Income of $65,000 divided by 12 = $5,416.66 (monthly gross income)

Now, let’s calculate the front end ratio of 31% of the gross monthly income. $5,416.66 gross monthly income multiply by .31 = $1679.16 - Total amount allowed for housing expense. Now, let’s calculate theback end ratio of 40% of the gross monthly income. $5,416.66 gross monthly income multiply by .40 = $2,166.66 - Total amount allowed for housing expense + additional recurring debts. Your monthly mortgage including taxes, insurance, PMI and HOA or Condo fees should not exceed $1,679.16

By subtracting the back and front end ratios, you can determine your monthly allowed debt expenses other than household expenses. $2,166.66 - $1,679.16 = $487.50 - Your monthly debts can not exceed $487.50 based on this calculation or another option is to have a lower monthly mortgage amount to account for the difference.]

Credit: There is no minimum credit score requirement. However, the credit report is reviewed and recommends will be made on a case by case basis. There must NOT be any late payments in the past 12 months, if so there will be a waiting period of 12 months before a qualification letter will be issued.

Credit Score: N/A If not credit is available, NACA will allow for alternative credit to be used. Contact your local NACA office for more information or attend an upcoming seminar to get started with the process

Approvals: Loan approvals are good for 90 days

Question: My income changed from $60,000 in 2012 and this year, my income is $73,500. How will this affect my qualifying? Most lenders and loan programs require a borrower to have two years of work history and income and also they will average the two years. $60,000 + $73,500 = $133,500. The average income is $66,750. The monthly mortgage payment would be no more than $1724.38. With the NACA programs qualifying standard of using the new income of $73,500, the monthly mortgage payment would be no more than $1,898.75. That’s a difference of $174.37. What does that mean in a mortgage payment? It’s roughly a difference of a mortgage up to $36,500 with an interest rate of 4% 


 Essential details of the Home Buying Program:

  • Low Interest Rate 
  • 30 Year Fixed Rate
  • Type of Loan: Conventional
  • No Down Payment
  • No Closing Cost
  • No Private Mortgage Insurance
  • No Perfect Credit
  • No Fees
  • The mortgage amount must not exceed $417,000 (Northern Virginia, Maryland & DC) Check NACA’s website to view by zip code the maximum amount allowed in your area of choice.
  • Property must be owner occupied at all times (no renting is allowed)
  • Interest rate buy-downs are allowed
  • No restricted purchasing area or specialized census tracks
  • Eligible properties are condominiums, townhomes and single family detached
  • The following purchase types are allowed under the program: for sale by owners, resale (on the MLS), new construction, REO (foreclosed homes) or HUD homes)
  • All borrowers are responsible for prepaid expense items such as earnest money deposit, home inspection and termite inspection fees.
  • All borrowers must be represented by a real estate agent.
  • All closings must be at a NACA office
  • All properties must have a home inspection and a termite inspection
  • As a condition of the paid closing costs, all borrowers must select an approved title company vendor listed with NACA in order to receive the no closing cost incentive
  • Closings occur between 45 to 60 days no exceptions
  • Hire a full time real estate agent with at least 2 to 3 years of real estate experience and familiar with the NACA guidelines and process
  • The real estate agent chosen must complete the realtor workshop with NACA and register within the NACA system
  • There is a renovation loan available for borrowers at no additional cost to the borrower. The interest rate remains the same as the current interest rate with NACA at time of rate lock.

Tips of making it through the NACA program successfully in a timely fashion:

  • Submit all required documents as soon as possible
  • Hire a buyer's agent that you feel comfortable with
  • Have realistic home buying plans and know the market through your buyer's agent
  • Don't have any late payments - Setup an automatic debt for your bills
  • Don't question what is requested of you to complete. If you are asked for it, you must submit it
  • Don't make any purchases with credit such as buying a car, financing furniture or applicances. 
  • All large deposits into your account must be verified and proof of income source submitted with your loan file

Consider this most loans unless a specialized program require PMI (private mortgage insurance) with an upfront fee paid at settlement and monthly fee, closing costs can be up to 4% plus down payment. By going with a program with NACA, this will save you THOUSANDS in the long run. To schedule a buyer consultation with me to learn more about this program, other programs and my services, CLICK HEREto schedule your appointment. For more information on NACA, visit www.naca.com


Here are the closest NACA offices in the Northern Virginia, Maryland & DC area:

NACA: Washington DC Office
1716 14th St. N.W. Washington, DC 20009
Phone: 202-328-6333 

NACA: Baltimore Office
1 East Mount Royal Avenue Baltimore, MD 21202
Phone: 410-783-0465 


Departments at NACA:


Areas with the maxinium loan amount of $417,000 in Northern Virginia, Maryland & DC

  • Arlington
  • Lorton
  • Springfield
  • Fort Belvoir
  • Fairfax Station
  • Newington
  • Alexandria
  • Burke
  • Mount Vernon
  • Fairfax
  • Clifton
  • Chantilly
  • Annandale
  • Merrifield
  • Falls Church
  • Centreville
  • Oakton
  • Vienna
  • Dunn Loring
  • Herndon
  • Reston
  • Mc Lean
  • West McLean
  • Greenway
  • Great Falls
  • Occoquan
  • Woodbridge
  • Dumfries
  • Triangle
  • Manassas
  • Quantico
  • Nokesville
  • Bristow
  • Catharpin
  • Gainesville
  • Haymarket
  • Lothian
  • Friendship
  • Tracys Landing
  • Harwood
  • Deale
  • Davidsonville
  • West River
  • Gambrills
  • Laurel
  • Churchton
  • Crofton
  • Galesville
  • Riva
  • Shady Side
  • Edgewater
  • Odenton
  • Mayo
  • Crownsville
  • Annapolis
  • Severn
  • Millersville
  • Hanover
  • Baltimore
  • Severna Park
  • Indian Head
  • Marbury
  • Bryans Road
  • Ironsides
  • Nanjemoy
  • Pomfret
  • Port Tobacco
  • Welcome
  • Waldorf
  • White Plains
  • La Plata
  • Bel Alton
  • Faulkner
  • Bryantown
  • Newburg
  • Hughesville
  • Mount Victoria
  • Issue
  • Benedict
  • Rock Point
  • Cobb Island
  • Fulton
  • LAUREL
  • Highland
  • Savage
  • Annapolis Junction
  • Clarksville
  • Columbia
  • Simpsonville
  • Jessup
  • Dayton
  • Glenwood
  • Ellicott City
  • Elkridge
  • West Friendship
  • Bethesda
  • Glen Echo
  • Cabin John
  • Chevy Chase
  • Potomac
  • Takoma Park
  • Silver Spring
  • Kensington
  • Garrett Park
  • Rockville
  • Gaithersburg
  • Poolesville
  • Germantown
  • Washington Grove
  • Derwood
  • Spencerville
  • Montgomery Village
  • Olney
  • Burtonsville
  • Beallsville
  • Sandy Spring
  • Boyds
  • Ashton
  • Brinklow
  • Barnesville
  • Dickerson
  • Brookeville
  • Clarksburg
  • Damascus
  • Accokeek
  • Fort Washington
  • Oxon Hill
  • Temple Hills
  • Clinton
  • Capitol Heights
  • Suitland
  • Cheltenham
  • Andrews AFB
  • Brandywine
  • District Heights
  • Brentwood
  • Mount Rainier
  • Hyattsville
  • Bladensburg
  • Upper Marlboro
  • Riverdale
  • College Park
  • Lanham
  • Greenbelt
  • Bowie
  • Beltsville
  • Glenn Dale
  • Laurel
  • Washington DC
  • Arlington County
  • Fairfax County
  • Loudoun County
  • Prince William County
  • Anne Arundel County
  • Charles County
  • Howard County
  • Montgomery County
  • Prince Georges County