My NACA Story: Buying a Home in Richmond, VA

In February 2020 I sat in my first NACA workshop. A month later our first child was born. By August I had the keys to our home, in the neighborhood we wanted, and it was more house than I expected to afford on a single income.

That's the short version. Here's the longer one, including the parts that took real work.

Why I looked at NACA in the first place

Before NACA, my wife and I were renting a 1-bedroom 850 square foot apartment in Fairfax, VA for $1800/month. With our firstborn child on the way, we knew we'd be needing more room for our family. However, my wife wanted to stay at home with our child (which I supported) and I knew homeownership would be difficult on my modest single salary (at the time it was around $65,000/year). When we first learned about NACA it was through friends of ours who bought their home with NACA in a very competitive market just outside of Washington DC. This gave us just enough hope to start the process, although I still had doubts it would work for us in our situation!

Like most renters, I assumed buying meant years of saving for a down payment. NACA, the Neighborhood Assistance Corporation of America, is a nonprofit program that works differently. It doesn't require a down payment, there are no lender closing costs or fees, there's no PMI, and the rate is fixed and (for many people) 1% below the market rate. Better yet, buyers can do further rate buydowns to get even lower interest rates. NACA sets those terms, they can change, and not every applicant qualifies, so check the current details with NACA.

What NACA asks for instead is time, discipline and a commitment to their values.

What the process actually looked like

From my first workshop to closing took about six months. Roughly in order:

NACA's free Homebuyer Workshop. It's the required first step, and it's where you get your NACA member ID. This is a 4-6 hour workshop typically. At the time I attended, it was solely in person, but it has since opened up to include virtual "at your own pace" options which are much more convenient for people who don't want to spend a day in person. Our session was in Washington D.C. and was CROWDED. It was a packed house! If you know, you know.
Counseling. Sessions with a NACA mortgage counselor to go through income, debts and budget. This meeting is set up once you have your NACA member ID and access to the portal. You will need to upload all your documentation related to your income and assets and employment, order your credit report, and more. The system guides you through this really well but if you have trouble there's plenty of assistance through their customer support or people like me who are just so friendly.
Documents. Pay stubs, about 90 days of bank statements, two years of tax returns and W-2s, all uploaded through NACA's portal. Then updated ones, again and again, until closing.
Practicing the payment. Every month I saved the difference between my rent and my future mortgage payment. NACA wants to see that you can carry the payment before you have it. They call this your "payment shock" and it is critical that you can demonstrate an ability to save this. If you've been saving this much prior to your meeting with the counselor, it's possible you can cut down on the length of time before you get qualified with NACA. This of course is decided by your NACA counselor.
Qualification. Once my budget and savings were where NACA needed them, I got my qualification letter and could start shopping. I personally used a NACA in-house realtor because it was hard to find a realtor who was familiar with NACA enough to help in a meaningful way. But if you can find a realtor ahem like that, then you might want to consider that option!
Finding the house, inspection, repairs, underwriting, closing. We looked at several homes before making an offer, and in a competitive market at the time we had some challenges but ultimately had success. The closing process is only challenging if you aren't on top of things. Get an inspection early and be proactive getting it to the HAND folks at NACA because they want to make sure any issues are taken care of!

Something surprising about the whole process was just how much your own hard work, proactiveness, organization, and determination can impact success. I thought a program this big would surely just have to work its course and I would be subject to whatever timelines they told me and would not have much room to make things go faster or smoother. It was not that way. So for anybody doing the program, it pays to really be involved and on top of things, and know who you can contact and count on for extra assistance at critical steps!

The parts nobody tells you

The paperwork never really stops. Expect to send updated statements and pay stubs regularly until you close. Keep everything as PDFs in one folder.
Your rent history matters. NACA looks at your whole financial picture rather than a credit score cutoff, and your payment history, especially rent, carries real weight.
You still need some cash. No down payment doesn't mean no money. Plan for the inspection, prepaid taxes and insurance, and reserves.
NACA is a membership. There are yearly dues and some community participation each year.
Speed is mostly up to you. The steps that take longest are the ones you control: steady savings, complete paperwork and quick replies to your counselor.

Why I'd still recommend looking into it

When we went to buy our next home, I went through NACA again. That time I stopped short, because the house we wanted was over NACA's purchase limit. So I've seen both sides: what NACA gets you, and where it doesn't fit.

If you're renting in the Richmond area and a down payment is what's holding you back, NACA is worth an honest look. It isn't fast and it isn't effortless, but for a lot of people it's the difference between buying in a few months and buying in a few years.

Your next step

Start with NACA's own free workshop at naca.com. If you'd like the whole picture first, from someone who's been through it, join my free 30-minute online intro below. I'll walk you through how it works, what it asks of you, and what to do first.