What Is a NACA Mortgage?


Buying a house is a dream for many Americans, but it can feel very out of reach for some people. To qualify for a mortgage, you’ll need an adequate credit score and down payment, which many people just don’t have.


That is where the Neighborhood Assistance Corporation of America (NACA) comes in. The NACA has helped hundreds of thousands of people find affordable housing with no money down and no minimum credit score. NACA also provides financial assistance for approved homeowners that encounter financial difficulties.

If you’ve been struggling to figure out how you’ll afford to purchase a home, then the NACA purchase program could help. This article will explain how the NACA mortgage process works and how the organization could help you find your next home.

What is the NACA mortgage program?

The Neighborhood Assistance Corporation of America (NACA) is a nonprofit group that focuses on helping Americans find affordable housing. The organization was founded in 1988 with the goal of fighting against discriminatory and unfair lending practices.

The nonprofit has 45 locations spread across the U.S., and the NACA helps borrowers with poor credit qualify for an affordable mortgage. The NACA does this through various different avenues, including property renovation and foreclosure prevention.

They also help borrowers restructure their existing mortgage so they can avoid foreclosing on their houses. But the NACA’s most popular program is its signature mortgage program.

How does the NACA Program work?

The NACA is known for its purchase program, which it calls the Best in America Mortgage Program. This purchase program is designed to make homeownership more affordable for everyone.

If you applied for a mortgage through a bank or credit union, you would undergo an extensive credit check. But the NACA makes it possible to buy a home with:

  • No down payment requirement
  • No closing costs
  • No requirement for perfect credit
  • No limits on your income
  • No fees – The lender pays the appraisal costs, attorney fees, title insurance, transfer tax, settlement agent fees, and buyer closing costs.

And all of this is available at a below-market interest rate. Currently, the NACA is offering a 30-year fixed-rate mortgage of 2.125% APR and a 15-year fixed-rate mortgage of 1.75% APR. You’d be hard-pressed to find a better deal anywhere else.

Requirements and Qualifications

Before you assume the NACA mortgage program is too good to be true, there are certain requirements you’re going to have to meet to qualify. Rather than just checking your credit, the NACA implements a character-based approach to determine creditworthiness.

For instance, NACA members won’t be penalized for financial hardship caused by an injury or illness. But you must demonstrate that you can afford to pay your monthly housing expenses.

These expenses include your monthly mortgage payment, property taxes, homeowners insurance, and HOA dues. And your income can’t fluctuate from month to month.

NACA purchase program doesn’t have any income limits, but if you earn more than the median income, you’ll only be allowed to buy a home in certain areas. And you aren’t allowed to own another home when you close on your NACA mortgage.

When you take out a NACA mortgage, you also agree to participate in at least five membership activities a year. This can include volunteering in a NACA office, attending a protest, or assisting another member in the home buying process.

Eligible States

Unfortunately, the NACA mortgage program still isn’t available everywhere, though the organization is working hard to expand across the U.S. It’s currently available in the following states:

  • Alabama
  • Arkansas
  • Arizona
  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • Louisiana
  • Massachusetts
  • Maryland
  • Michigan
  • Minnesota
  • Missouri
  • Mississippi
  • North Carolina
  • New Jersey
  • Nevada
  • New York
  • Ohio
  • Pennsylvania
  • South Carolina
  • Tennessee
  • Texas
  • Virginia
  • Wisconsin

Pros and Cons

Here are some of the biggest advantages and disadvantages of taking out a mortgage through the NACA.


  • Buying a home with no down payment or standard closing costs
  • Snag a below-market interest rate on a 15-year or 30-year mortgage
  • No credit requirements or income limits to apply
  • Receive extensive borrower education and training


  • Time-consuming application process
  • Program isn’t available in all 50 states
  • There are limits to how much you can borrow
  • You’ll have to pay for property taxes and homeowners insurance

Loan Limits

The NACA home buying program has loan limits that cap your mortgage amount. The purchase price of a home cannot exceed the conforming loan limit, which is $647,200 for a single-unit property in most states. The conforming loan limit for a single-unit home in Alaska and Hawaii is $970,800.

Who qualifies for NACA program?

The NACA mortgage program is very generous, but there are several steps you’ll need to take before you can close on your home. Here are the seven steps you’ll take to complete the NACA loan qualification process.

1. Attend a free homebuyer workshop

If you’re considering applying for a NACA mortgage, you’ll first have to attend a homebuyer workshop. During this free workshop, you’ll learn more about homeownership and how to qualify for the NACA mortgage program. Then, you can register on the company’s website to reserve your spot.

2. Meet with your housing counselor

Once you’ve completed the homebuyer workshop, the NACA will assign you a housing counselor to guide you through this process. Your housing counselor will help you determine an affordable monthly mortgage payment and help you come up with a reasonable monthly budget. You’ll continue to meet with your counselor up until you’ve qualified for the NACA housing program.

3. Attend a NACA purchase workshop

Once you’ve qualified for the mortgage program, you must attend a purchased workshop at the NACA office. During this workshop, you’ll review the home purchase process and work with a real estate agent to help you find the right home.

4. Receive a property qualification letter

Once you’ve chosen the home you plan to buy, you’ll have to get in touch with your housing counselor again. They will help you secure your qualification letter.

This letter states that you are qualified to purchase the home you’re interested in. Your NACA counselor and real estate agent can also help you draft an offer on the home.

5. Get your home inspected

Before you can purchase a home, it must pass a NACA home inspection and pest inspection. If the inspection reveals any problems with the home, you must resolve those issues before you can close on the home.

6. Meet with your mortgage consultant

Throughout this entire mortgage process, you should be saving money, maintaining your income level, and paying your bills on time. At this point, you’re going to meet with your mortgage consultant to prove that you’ve met the required guidelines and are ready to move forward with the mortgage application.

7. Close on your mortgage

Now it’s time to close on your home! There are no closing costs for a NACA mortgage. Also, NACA members do not pay private mortgage insurance (PMI). Instead, your NACA membership provides you with a post-purchase assistance program through NACA’s Membership Assistance Program (MAP). But this is the final step that allows you to close on your new home and finalize the process.

Bottom Line

If you’re concerned that you don’t have the down payment or credit requirements necessary to apply for a traditional mortgage, a NACA mortgage may be a good option. Borrowers that qualify could receive low-interest mortgages with no down payment, closing costs, or fees. The application process is tedious, but the benefits can help you achieve the dream of homeownership.

Jamie Johnson
Meet the author

Jamie Johnson is a freelance writer who has been featured in publications like InvestorPlace and GOBankingRates. She writes about various personal finance topics including student loans, credit cards, investing, building credit, and more.