After the holidays pass and the excitement dies down, many people look for the best way to showcase, use, or re-gift things they may have been fortunate enough to receive. Renae France, however, received the gift of her first home this year, just in time for the holidays, and she has no intention of doing any returning or exchanging. “It feels good to invite family over to a place that’s mine. I also enjoyed decorating this year, as well.”
This particular gift was about two years in the making. Renae knew she wanted a home, but like many other people taking those first steps, saving for a down payment was going to be quite a challenge. Daycare for her then two-year-old daughter Kimberly and other life expenses seemed to make homeownership a very distant fantasy, a dream, but hope came through a telephone call. “A friend from Maryland told me about a program called NACA. She’d attended an orientation and called to tell me about it.”
NACA, which stands for Neighborhood Assistance Corporation of America, is a nonprofit organization whose mission is to set a new national standard for providing loans to low- and moderate-income people and those who are considered to be sub-prime borrowers. NACA provides prime loans to borrowers who might otherwise be subject to predatorily high rates and fees for the opportunity to own a home. New homebuyers receive the lowest rate (as of this writing it is 5.5%), with no down payment, no closing costs, no fees, and no need for “perfect” credit.
At first glance the program may sound too good to be true. Renae remembers, “I was skeptical. I didn’t think it was a legitimate program. I called Fannie Mae, who looked into it for me. The folks from Fannie Mae told me that it was legitimate and a good program to participate in.”
NACA CEO Bruce Marks had seen his share of potential home buyer heartaches. As a union activist for the Hotel Workers Union in Boston, Marks helped negotiate the first housing trust fund, which allowed union workers to use part of their wages to save for a home. He didn’t stop there. He also spearheaded an evaluation to expose predatory lending and its devastating impact on local neighborhoods. Through a two-and-a-half-year research report that focused on then Boston-based Fleet Bank, Marks was instrumental in negotiating an eight–billion-dollar reinvestment program for low- and moderate-income people. Marks calls his NACA program “the best mortgage product in America.”
What does Renae now think of the program? “I love it! They helped me to get repairs done to my new home before I bought it. I was also able to save enough to cover move-in expenses and not end up broke because of it.”
NACA, however, is not a “free ride” to home ownership. “I had to start a savings plan that I could afford and saved that amount of money each month. I was held accountable by NACA, so that I could be able to own my own home. I had to save enough to cover the cost of inspection, one month’s worth of mortgage, three months of property taxes, and one year of homeowner’s insurance. It wasn’t hard to save, because they helped me create a monthly budget.”
Monthly budgets can show a new buyer where spending “leaks” may be, and NACA facilitators like Chris Lee in Springfield, Massachusetts, helps applicants fill in those gaps so they can save more than they thought.
Remae recalls, “The toughest part might have been house hunting. At times it was discouraging, because the housing prices in this region at the time were higher than I could afford.”
When asked what day she finally got the keys to her new home, Renae exclaims, “July twenty-fifth. The first thing I did was go back to the house, order some pizza, and invite my family and friends for dinner.”
For Renae, owning a home is the beginning, and not the end, of her homeownership journey. The biggest differences she says are the yard work and “writing the check for my mortgage.”
Renae is still active with NACA and its mission. “I speak to new home buyers at NACA orientation classes to encourage people to participate in the program.”