Founded in 1988, the Neighborhood Assistance Corporation of America provides more than 30% of housing counseling throughout the country. The HUD-certified nonprofit serves homebuyers and homeowners in nearly 30 states, including Illinois.
NACA provides mortgages to low-to-moderate income people looking to buy homes in low-to-moderate income communities. Bank of America has committed $15 billion to NACA’s Best in America Mortgage program, which boasts no down payment, no closing costs, no private mortgage insurance and a below-market fixed rate to eligible individuals.
Amarilis Wise, who directs NACA’s Chicago office, spoke with Austin Weekly News about the work the organization is doing to promote economic justice and make homeownership accessible to historically marginalized groups.
Why is the NACA mortgage program unique?
Wise: Why do we say NACA is the best mortgage in America? NACA is the first housing counseling company in the United States to counsel people to buy a home in the right way. We’re a housing counseling company. The actual lender is the Bank of America — we have an agreement with them until 2026, which says whoever buys a home through NACA, they will not be required to pay any down payment. If you want to put down a down payment, that’s fine — but it’s voluntary. The other important stuff is the closing costs: title insurance, appraisal, all those expenses that a buyer must go through when they buy a house, NACA pays for all of that, so they’re saving all that money that sometimes people are not able to even have the capacity to save for to become a homeowner.
The regular median or lower-income people, it’s very hard for them to save for a down payment or save for their closing costs. Here, NACA gives you the opportunity to buy a house.
We have people that have a credit score (as low as) 500. Why? Because what we evaluate is the behavior. You have to be paying on time at least the last 12 months of your liabilities, right? Some people have hardships in the past. Maybe they lost a job, they have charges they couldn’t pay two, three, four years ago. They do not need to pay it [back]. They just need to explain it. Any medical bills, even if it happened just two months ago — you don’t need to pay, you need to explain it. So those things open the door for much more low- and moderate-income people that normally will be rejected, or be treated with a much higher interest rate at any regular mortgage company or bank. So that’s why NACA is the best mortgage in America. No down payment, no closing costs, no interest in the credit score, no PMI.
Can you talk about NACA’s work in the Chicago area?
Wise: A lot of the members go for multifamily units. Others just want the house, right? We have communication with certain areas where they are building houses — not much in Chicago — but there are new construction houses, right? We do a lot in the suburbs. We also have our own in-house realtors that members can use if they want. They can bring their own realtor, or they can use one of NACA’s. They know the market, they know how to deal with NACA. They negotiate with the seller, know what to ask for, and can help the member with the transaction. The market in Chicago is growing exponentially, especially over the suburbs.
What can NACA members expect?
Wise: My counselors really go through, “did you upload your pay stub? Do you have a bank statement?” They are not just loan officers, they’re counselors. And I’ll tell you: the percentage of foreclosure with NACA loans is 0.00012. So almost nobody that buys a home through NACA goes into foreclosure, and this is because we do it in the right way. What does “the right way” mean? Very simply: You go to the bank. You get approved for $300,000 based on your income. You go look for a home where you can make the monthly mortgage payment. You need to check with your counselor, what is your budget? How much can you afford, at most, for a house? That amount is the amount we’re going to approve you for. We’ll give you an estimate for what that mortgage amount can buy.
We do multifamily, which is awesome in Chicago. They do it a lot. A lot of members have become investors, because they buy a unit where they live, but they rent the other unit, and technically, they pay off the mortgage with the rent that they receive for the other unit, or units. So that’s awesome.
The other mortgage companies don’t have anything close to this. They may say, “NACA takes a lot of time with the process.” That might be true, but it really depends.
What advice would you give prospective buyers?
Wise: The first thing I will say is, have a stable income — whatever it is, a fixed income, a self-employment income, or a W-2 income, you have to be stable for at least two years of employment history. [It does] not necessarily [have to be] in the same company, but at least two years working and producing money, because your income is going to determine how much you can afford.
Also, budget. Where am I spending my money? How much money do I have? Most people don’t know where their money goes. They start to budget, and they didn’t realize how much money they were spending every day at Starbucks. People don’t realize that until they don’t put it on paper and do their budget. So for us at NACA, the budget is a must. Do your own budget to see how you’re doing and what you need to adjust. Or maybe you’re saving well. We don’t know. It depends on different people. But becoming a homeowner is a financial situation that you need to have in order, and make sure that the monthly payment you are going to sign for is affordable for you.
Also, people that pay their rent on time can pay their mortgage on time. However, sometimes people want to be approved for a higher amount than the rent, so they need to save more money to prove that they can.
It doesn’t just matter how much money you make — it’s about how much money you make and how much you spend.
How does a prospective homebuyer get involved with NACA?
Wise: If you want to use NACA, the first thing you go is to the website: www.naca.com. Then, we have two options: We have, every two weeks, a face-to-face homebuyer workshop in Chicago, which I love to do. Or, you can do a webinar by yourself in two, three hours. Then, you get your NACA ID, and you are able to have your own online portal where you can upload your own documents, you can call us, and you can make an appointment in the system. Now, I would love for people to call directly to the office and we take care of them, because I still love the face-to-face. Nothing compares to talking to people. Every counselor here has their own office. But they also take care of a lot of people virtually. Members can come to the office, which is at 4425 West 63rd Street.