When is a Payment Shock Savings Pattern (PSS) required? PSS is required if the mortgage payment the Member desires is ten percent (10%) or greater than the Member's current affordable rent. What is the requirement for rental verification? The verification of rent must cover 12 months with the most recent end date no greater than 60-days prior to NACA Qualification submission. The Counselor must be resourceful in assisting the Member in seeking rental assistance and be familiar with HUD programs that provide grants to states and localities for rental assistance to lower income people. What happens if a counselor determines that a member's rental payment is unaffordable, cannot demonstrate on-time rental payments, or is defaulting on other obligations? The counselor will determine that the Member is probably not ready for homeownership but needs assistance and budget counseling. What is the basis of documenting affordability for homeowners? If the Member is a current homeowner or former homeowner, then they must have on time payments for the past 24 months, supported by a verification of Mortgage ("VOM") or strong compensating factors. What is the basis of documenting affordability for rental? A Verification of Rent form from a landlord, member's bank account statements, rent ledger, canceled checks with lease agreement, and other payment forms. How many months of rental history payments must a counselor verify ? The most recent 12 months of payments have been made on-time, 24 months of on-time payments are required for existing homeowners. What is a major indicator in determining a members ability to afford and make on-time mortgage payments? It is is demonstrated by the Member's rental history. NACA uses the Member's affordable rent as the baseline to determine their affordable monthly mortgage payment because this represents their proven ability to make a housing payment and it reflects their current balance between housing and other needs. What is NACA's belief behind rental payments when it comes to owning a home? NACA believes people who choose to own a home should be able to own a home for the same payment they have successfully demonstrated they paid in rent. How are affordable payments determined? The affordable payment is determined by their rental payment the Member has demonstrated they can pay plus the PSS without increasing debts or depleting savings to pay for their rent, and the budget supports the desired Mortgage Payment with the required surplus. They are not determining factors when assessing an affordable mortgage payment, they are limiting factors that represent a cap or a ceiling of the highest payment the Member can qualify for base only on their income, debts and desired payment, but it does not necessarily demonstrate the payment is affordable. Are Debt-to-income and Housing ratios used when determining an affordable mortgage payment for a member? No. What must a members budget show when determining an affordable housing payment? The budget must show that the Member's net income is sufficient to pay their debts, expenses, desired mortgage payment, which can be their rent, lower rent, or rent plus PSS, and at least $200 for a single-family and $400 for a multi-unit to cover homeowner maintenance and unexpected expenses. Surplus How is a members affordable housing payment determined? By the member's on-time rental payment history plus any PSS. What is affordability? Determining the amount a Member can afford for a monthly mortgage payment What must the counselor evaluate when determining an affordable payment? 1. What are the first eight stages for the intake session? Set the expectations, preliminary assessment of members finances, information stage: 1, counseling stage: 2, income stage: 3, rental stage: 4, pay history stage: 5, debts stage: 6, affordability stage: 7, funds stage: 8, budget stage:9, action plan. What are the stages that counselors must review in order for a member to be NACA qualified? Information, Counseling, Income, Rental, Pay History, Debts, Affordability, Funds, & Action Plan What are the 10 steps to homeownership? Attend a homebuyer Workshop, intake session, NACA qualification, Purchase workshop/housing search, purchase & sale contract, property condition, NACA credit access & bank application, Mortgage Processing, Mortgage closing, Post-Purchase.
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