NACA Approves a Payment, Not a Price

When NACA qualifies you, it doesn't say "you can buy a $300,000 home." It approves a monthly payment. That's a different way of shopping, and buyers who understand it make better offers.

How NACA sets the payment is in how the NACA budget works. This article is about what happens next: turning that payment into a price, one house at a time.

Where the payment goes#

Your approved payment has to cover four things:

Part of the payment	What decides it
Principal and interest	The loan amount and your rate
Property taxes	The home's assessed value and the locality's tax rate
Homeowners insurance	The house: age, roof, construction, location
HOA or condo dues	The community, if there is one

Only the first one is the loan. The other three come off the top, and what's left decides how big a loan, and so what price, your payment supports.

The same payment, three localities#

Real estate tax rates for 2026, per $100 of assessed value:

Locality	Tax rate	Monthly tax on a home assessed at $300,000
Richmond City	$1.20	$300
Henrico County	$0.83	$208
Hanover County	$0.81	$203

For a household at its payment limit, that's about $97 more every month in Richmond than in Hanover on the same assessed value. Every dollar of it comes out of the share that would have gone to the loan, so the same payment supports a smaller loan, and a lower price, in the city.

That doesn't make one place better than another. It means you should run the numbers for every locality you're considering instead of assuming a price range carries over.

Two more things about taxes:

• Taxes are figured on assessed value, not your price. The current assessment is public, but it can change after you buy. Richmond and the counties reassess regularly.
• Some homes carry extra charges, like special district taxes or fees. Ask before you make an offer.

HOA and condo dues#

Dues come straight out of your payment. Say two homes have the same taxes and insurance, and one has $250 in monthly condo dues. The condo leaves $250 less of every payment for the loan, which can mean tens of thousands of dollars less in price. Look up the dues and what they cover before you fall for a listing.

Insurance#

Insurance is the number buyers guess at most, and it varies the most from house to house:

• Age and roof condition move the premium, and some insurers won't cover an old roof at all.
• Construction and systems. Older wiring and plumbing can raise it.
• Flood zone. If the home sits in a FEMA flood zone, flood insurance can be required on top. Check any address on the FEMA flood map before you get attached.

Get a real quote for any home you're serious about. Older homes are common around Richmond, and the difference between two quotes can be large.

Three ways to stretch the price, not the payment#

Your payment limit is fixed by your income, debts and savings pattern. But NACA lets you raise the loan amount without raising the payment:

1. The NACA buydown. Money paid up front permanently lowers your rate, so the same payment carries a bigger loan. It can come from your savings, a grant, a gift or the seller. (Seller money for the buydown is capped at 10% of the price.)
2. Principal reduction. Money put toward the loan itself.
3. Grants. Local assistance can often be used for the buydown or principal reduction.

Points vs. down payment compares the buydown with putting money toward principal, using your own quoted rates.

Two more limits to know#

• NACA's maximum loan amount for your area caps the price no matter what your payment supports. See NACA's loan limits.
• The address can change your rate. For some buyers, the census tract a home sits in decides which rate tier applies. See NACA and census tracts, and check any address.

How to shop with this#

1. Think in payments, not prices. For every listing, estimate taxes, insurance and dues before you look at the price.
2. Run each home through the numbers. The free budget worksheet takes your approved payment, the locality's tax rate, insurance and dues, plus a rate you type in, and estimates the top price.
3. Compare localities side by side if more than one appeals to you.
4. Get the insurance quote before the offer on any older home.
5. Check the tract before you write an offer.

The bottom line#

Your NACA approval is a budget, not a price tag. Taxes, insurance and dues decide how far it goes, and they change from one locality, and one house, to the next. Run the numbers on every home, and use the buydown and grants to stretch the price without stretching the payment.

NACA determines your approved payment and loan amount. Confirm the figures for any property with your NACA counselor.