What Sellers and Listing Agents Should Know About a NACA Offer

NACA buyers have done a lot before they make an offer: a workshop, counseling, months of proving their savings, and a full review of their finances. That makes them well-prepared buyers. A NACA purchase does run on its own process, though, and sellers do better when they know what to expect.

What the buyer has already done#

• They're NACA-Qualified. NACA's version of pre-approval comes after counseling and a full review of the household's income, savings pattern, debts and payment history, and it sets a maximum monthly payment. NACA tells its members not to make an offer until they have it.
• They're on a clock. NACA gives qualified buyers 120 days to find a home before they have to re-qualify, so they're motivated to get to contract.
• They bring their own money. Earnest money, the inspection and other upfront costs come out of the buyer's own dedicated account.

What's different from a typical financed offer#

The inspection moves fast

• The inspector is registered with NACA, and the buyer books the inspection within 24 hours of the signed contract. NACA expects it done within three to four days.
• Someone from the buyer's household has to be there. Please make sure the power, gas and water are on so every system can be tested.

NACA reviews the house

NACA's HAND department (Home and Neighborhood Development) reviews the inspection and emails the buyer and their agent a NACA Repair List. It covers code, safety, health, structural and major mechanical issues that have to be dealt with for the home to qualify.

The buyer then has three to four days to negotiate repairs with you. The usual options:

• You make some repairs before closing. List each one by name in a signed addendum, use licensed professionals, and keep the paid receipts. Expect the work to be checked.
• The buyer finances repairs into the loan through a rehab escrow, with the work done after closing. That can make a house with deferred maintenance much easier to sell.
• A mix of the two.

A dated home isn't a dealbreaker. Required repairs can often be handled through the buyer's loan instead of your pocket.

Seller credits go to the rate, not closing costs

NACA buyers don't pay lender closing costs or fees, so they usually ask for seller money toward a permanent rate buydown instead. The rules:

• Seller money for the buydown is capped at 10% of the contract price. NACA says amounts above 10% can go toward the buyer's repair escrow after closing.
• The price can't be raised to fund the buydown. If seller money is over 6%, the lender may review the deal to make sure it wasn't.

Two reviews before closing

NACA approves the file, then the participating lender underwrites the loan. Lender conditions, repairs and second appraisals are the usual sources of delay.

Contract terms to expect#

• Inspection and wood-destroying insect contingencies, with enough time for HAND's review
• Financing and appraisal contingencies, plus a grant contingency if the buyer is using assistance
• A settlement agent the buyer chooses. Virginia law gives that choice to the buyer. A NACA buyer will choose one that works with NACA.
• The property vacant at closing
• Condo or co-op approval, where it applies

Timing#

NACA aims for about 30 days from contract to closing, but repairs, second appraisals and lender conditions can stretch it. A realistic closing date and clear terms for a short extension protect everyone. Decide how you'd handle a short delay before you sign, not when it happens.

How to keep it on track#

• Have the utilities on for the inspection.
• Answer the repair list quickly. The negotiation window is only a few days.
• Put agreed repairs in a specific, signed addendum, use licensed contractors, and keep receipts.
• Plan for a short extension, just in case.
• Have the home empty and clean for the final walk-through.

The bottom line#

A NACA buyer has been reviewed more thoroughly than most, and comes with a process that can absorb repairs other buyers would walk away from. Know the inspection timeline, answer the repair list fast, handle any repairs by the book, and a NACA offer can close as smoothly as any other.

NACA sets its own process and requirements, and they can change. Buyers and sellers should rely on their own agents and the contract for specific terms.