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NACA Versus GA Dream Down Payment Program
—Learn whether NACA or Georgia Dream is the best choice for you and your family

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If you are considering purchasing a home or refinancingyou can go to or along with local mortgage lenders in your areato determine what loan will best suit youand your family.  You can compare closing costs, APR's and Par rates to determine what loan will best serve yourand your family's long-term interests.

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NACA versus Georgia Dream

In these difficult times many homeowners are using down payment assistance and other creative options to purchase their home.

As of late (Summer 2011) we have received a number of inquiries on the NACA mortgage program and the Georgia Dream Down Payment Assistance programs.

In this discussion our goal is to add clarity to your thinking as it relates to both of those programs.

Deciding on loan choices that are in your best interest can sometimes be difficult and confusing.

It is our desire that after engaging in this discussion you will be better armed to make the best decision for yourself and your family if you are considering down payment assistance now or in the future.

Those who participate in NACA's programs are called “members”, and they fall into three membership categories:

1. Participating members are on the road to purchasing a home or exploring a refinance with NACA—they pay $20 annually.

2. Homeowner members have purchased or refinanced through the agency. These members are still entitled to counseling and assistance throughout the life of their NACA loan—they pay $50 a month for 5 or 10 years—the payment is rolled into the mortgage payment.

3. Community members support the organization's mission and participate in advocacy efforts, although they may not own a home—they pay $20 annually.

The dues that NACA receive help fund the Membership Assistance Program, which is what homeowners turn to after the closing and purchase of their home.

In order to qualify for a NACA mortgage, you can't own any other property, so if your goal is to purchase a vacation property or rental propertyNACA is not the choice for you.

With the NACA program it is mandatory that you occupy the home for as long as you have the mortgage.

“NACA takes out a lien on the property as an enforcement measure.”

By having this owner/occupant requirement many at NACA believe that people who own and occupy their homes will have a greater stake in the success of their neighborhood and will lead the way in stabilizing lower-income neighborhoods.

If you use the NACA purchase program you will have to "participate" in helping further NACA's goals.

There are a number of ways you can reach the "participatory requirement" with NACA.

The participatory requirement that is a requirement are found in very few home loans and you should know upfront that you must meet this requirement if you are going to use the NACA process.

Once you become a "homeowner member" you must complete five actions that further NACA's goals on an annual basis.

These actions could include everything from:

  • stuffing envelopes to;
  • storming a shareholders meeting with the possibility of arrest, to;
  • working NACA workshops and working alongside other participating, homeowner, and community members.

If you're trying to decide if NACA is right for you, you can go to a workshop in many areas of the country free of charge.

The workshops as they are called are held regularly in the areas with NACA offices.

The workshops are four-hour seminars that teach participants about the group's mission and what they'll need to do to buy a house.

The workshops are required if you plan on using NACA!

After you attend the workshop you can decide that you are not interested in the NACA program or become a "participating member" by paying your $20 annual dues—where you can continue down the path to a NACA mortgage.

NACA Interest Rate as of 8/26/2011 3.75%

With NACA you will have access to a mortgage that requires:

• no down payment

• no closings costs

• no application fee

• no private mortgage insurance

• no perfect credit history required

• The interest rate is substantially below market.

NACA and its Mortgage Consultants will work with you for as long as it takes to make you a homeowner.

NACA has used aggressive advocacy to foster lending at below market rate with several lenders.

• You do not have to have savings or down payment, however there is a $50 membership fee per month for homeowners that lasts for 5 years (total outlay $3,000) or 10 years (total outlay $6,000).

NACA provides workshops to help ensure you maintain and keep your home.

NACA and their Mortgage Consultants will use your character as a major loan criteria.

• The NACA Home Buying process can be time consuming and drawn out.

Many (consumers) “participating members” who are interested in the NACA program have credit issues.

If that was your situation a Mortgage Consultant would help you determine which issues needed to be addressed and resolved so that you could obtain a mortgage.

In most cases NACA will not turn you away because of bad credit—if you are willing to improve your credit to an acceptable level!

NACA only fulfills its mission if Members sufficiently prepare their finances to sustain their homes in the long run—therefore, their primary goal is to ensure that you obtain a good loan and remain a homeowner.

As a “Member” you would have to commit to improving your communities and become active in NACA’s advocacy campaigns.

Those are some of the reasons that the NACA process can be time consuming.

The cleaner your credit is at the time you decide NACA is right for you—the faster the process will move for you—however the process can still be time consuming.

Let’s look at an example of a $120,000 home purchase for 30 years at 3.75% interest using the NACA program

$120,000 home purchase example with no down payment—you can also buy down the interest rate .25 of 1% by paying 1% of the loan amount—you can go all the way to zero if you choose to do so.

3.75% interest rate

30 year term

Payment: $555.74 Principal and Interest for a total of 360 months

(Note: taxes and insurance not included).

Add $50 member fee—payment $605.74 plus all of the mandatory participation!

If you “bought the interest rate down to zero” you would pay $18,000 to do so and your monthly payments on a 30 year loan would be $333.33 per month for a total of 360 months.

Add $50 member fee—payment $383.33 plus all of the mandatory participation!

If you put $18,000 “down” and the interest rate was at 3.75% you would pay $473.38 per month for a total of 360 months with a loan amount of $102,000.

Add $50 member fee—payment $523.38 plus all of the mandatory participation!

Keep in mind that most people who have $18,000 saved normally have decent credit and have other possibly better loan options. This example is done for illustrative purposes.

Remember: You must add the $50 member fee to your payment for 5 or 10 years—whatever NACA decides based on your credit and character position!

Georgia DREAM Down Payment Assistance

3 Programs offered:

1) Standard

2) Choice

3) Pen

1) The "Standard" $5,000 Down payment Assistance for credit and income eligible Georgia residents.

* Income and sales price limits apply

* No Monthly Payments

* No Interest

* Loan must be repaid when home is sold or refinanced or no longer used as the borrowers personal residence.

Borrower contributes a minimum of $1,000 in the Standard, CHOICE & PEN program to the purchase transaction.

Borrower must complete Home Buyer Education provided by a DCA or HUD approved education counselor.

GA Dream Current Interest Rate 4.750% (8/26/2011)

5.0% (8/26/2011) with additional DP Assistance through Standard Program , CHOICE or PEN program—0% interest rate until transferred, sold, refinanced, or no longer owner/occupant.

2) CHOICE Program

(Consumer Home Ownership and Independence Choices for Everyone)

To assist households with Down Payment Assistance (disabled must reside in home)

• Income Limits

• disabled must be member of your household

• Atlanta MSA 1 to 2 people $71,000—3 or more $82,000

• Statewide 1 to 2 people $61,000—3 or more $70,000

Atlanta area counties:

Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Spalding and Walton

To apply:

Contact a Georgia Dream participating lender

With Georgia Dream Down Payment Assistance you will have access to a mortgage that requires:

*Home Buyers who reside in Georgia

*Are First time home buyers

*Have not owned a home in the past 3 years

*If either spouse have purchased or owned a home in the last 3 years you are disqualified

*Tax returns will be used to verify your past home ownership—if applicable

*Purchase in a targeted area

Who Also:

Meet the requirements of the Georgia Dream 1st & 2nd mortgage programs.

Disability verification required:

1. A Social Security Disability determination letter.

2. A certified denial from SSI which states that an impairment or disability exists but applicant is not currently eligible for funds.

3. Document from an acceptable medical source that indicates the existence of an impairment listed on the Social Security website:

4. Evidence of dependent status if applicable.

3) PEN (Protectors, Educators & Nurses)



Police departments; sheriff’s departments, correctional facilities and other law enforcement agencies such as highway patrol, also includes probation officers.


Fire departments, EMS services and volunteer fire fighters



Local, city, or county school boards recognized or accredited by the State of Georgia or Regionally Accredited Associations to include Head Start, Pre-K, Elementary, Middle and High Schools, Colleges and Private Schools.

Also state certified teachers of day care providers.


Health Care:


State licensed health care facilities including, but not limited to the following:

1. Hospitals

2. Doctor & Dentist offices

3. Health Departments

4. Nursing Homes

Let’s look at an example of a $120,000 home purchase for 30 years at 5% interest using the Georgia Dream Down Payment Assistance program

With Georgia Dream Down Payment Assistance you would have an interest rate of 5% if you selected the "Standard—CHOICE—or PEN down payment assistance or any combination of the three.

$120,000 minus $5,000 Standard Program would lead to a loan of $115,000—If PEN or disabled additional $7,500 on top of Standard Program amount of $5,000.

Let's say your $1,000 required down payment was used for credit—application fee—and owner’s title insurance.

4.75% interest rate (8/26/2011)

5% interest rate with DP Assistance

30 year term

Let’s say you are able to get the seller to pay the remainder of your closing costs

$115,000 loan amount

5% interest

30 year term

Payment: $617.34

The $5,000 down payment assistance would be considered a second loan and would be recorded as a lien in the same manner as the first mortgage.

The down payment assistance loan would be at zero percent interest and you would only have to pay it back if:

• ownership was transferred

• you sold the property

• you refinanced the property

• you were no longer an owner occupant

Note: Payment excludes closing costs that the seller would pay and other costs listed above that you would pay.

If you were able to qualify for the CHOICE program or the PEN program you would be entitled to an additional down payment assistance amount of $7,500.

$120,000 minus $5,000 Standard Program would lead to a loan of $115,000—If CHOICE or PEN additional $7,500 on top of Standard Program amount of $5,000.

$120,000 minus $5,000 minus $7,500 equals $107,500 loan amount

$107,500 loan amount

5% interest rate

30 year term

Payment : $577.08

If you were to put $18,000 down and obtain down payment assistance your loan amount would be $120,000 minus $5,000 Standard Program minus $18,000 equals $97,000.

$97,000 loan amount

30 year term

5% interest rate

Payment $520.71 plus a recorded lien and other loan criteria

Basic Program Comparison Between NACA & GA Dream:

NACA: $605.74 (P & I only)—$120,000 loan amount @ 3.75% interest

Payment drops to $555.74 after 5 or 10 years—other requirements—lengthy pre-purchase education and preparation—ongoing community activism—5 or 10 year contribution to NACA Fund and not all communities qualify—and other criteria apply.

GA Dream: $617.34 (P&I)—$115,000 loan amount @ 5% interest

Payment constant for life of loan (P&I only) $5,000 2nd mortgage at 0%—other requirements—Home Buyer Certificate required plus $1,000 contribution—income and purchase price limits apply and not all communities qualify and other criteria apply.

Down Payment of $18,000 comparison:

NACA: Interest rate of 3.75% with $522.38 monthly payment and a loan balance of $102,000—includes $50 per month NACA fee in payment which would last for 5 or 10 years.

GA Dream: Interest rate of 5% with $520.71 monthly payment and a loan balance of $97,000—plus a $5,000 2nd mortgage at zero percent (total of both loans would be $102,000) that would be due at sale—refinance—transfer—or non-owner occupied use.


The monthly payment of property taxes and homeowners insurance has not been taken into consideration in the above examples.

Also, those with $18,000 to put down on a house normally have decent credit and other more beneficial loan options are normally available.

The purpose of the comparison is to show the differences in the programs under different scenarios. Keep in mind there are income and asset considerations that may be in effect under both programs.

(P&I) in the above examples mean principal and interest.

What it all Means:

If you had no down payment and you chose NACA your monthly payment would be $605.74 and you would have a loan amount of $120,000 at 3.75% interest.

You would have to go through the NACA process that is normally more time consuming than the GA Dream Program.

If you had a $1,000 DP with GA Dream and it went towards closing costs and assuming seller paid remaining closing costs you would have a monthly payment of $617.34 and have a loan amount of $115,000 at 5% (plus a 2nd mortgage of $5000 at 0% that would only have to be paid if you sold property, refinanced, became non-owner-occupant, or otherwise transferred property—for a total loan amount of $120,000)—however you would not have the member fee and other mandatory obligations.

You could possibly have PMI (Private Mortgage Insurance) and that could increase your payment some.

If you used Georgia Dream Down Payment Assistance you could also use the program in conjunction with other local or county programs to bring your loan amount and monthly payment down even lower.

If you are in Georgia be sure to check with local and county offices as well as charitable foundations and other down payment assistance providers to see if you can use those programs in conjunction with the Georgia Dream Down Payment Assistance.

For example in Atlanta you could possibly get up to $50,000 in down payment assistance if you qualified and that could possibly be used in conjunction with the Down Payment from the GA Dream Down Payment Assistance program.

With either option that you choose be sure you have adequate discretionary income and low debt going into your home purchase.

Very Important:

Monthly Property Taxes and Homeowners Insurance have not been factored in to the payments—nor has the income tax ramifications from points, home mortgage interest, property taxes and possibly PMI (Private Mortgage Insurance) been factored in.

Those factors could play a major role in which option is best for you and your family.

Everyone has a unique tax position—so be sure to keep your tax position in mind when analyzing this data.

You must factor in your credit, time commitment and all additional fees and criteria including the recording of additional liens with both programs.

The comparison of which program is better for you is often a difficult one to make—however from a real estate agents perspective—including my own I have found the GA Dream program to operate much smoother in my experiences.

However, that is not to say that it is the best program for you—it all depends on your unique personal situation and what you feel will work best for you and your family long term.

Also, the programs listed above are subject to change and may require that you contact the mortgage counselor at NACA or a participating lender at GA Dream to get the most accurate and up to date loan guidelines and conditions.

Use the above comparisons as a guide only as changes can an do occur in both programs.

Other Key Points To Keep In Mind

Also, make it an immediate goal to properly fund your emergency fund to cover at least 6 months of your monthly debts and build on that in the future.

In addition, be sure to address all areas of your finances as that could get you on track to building generational wealth.

Generational wealth building is now more important than ever in this current economy.

Be sure to continue your quest to improve your living conditions by properly addressing all areas of your credit and finances—including your home purchase.

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About This Article:


The above article was written by Thomas (TJ) Underwood.   Thomas (TJ) Underwood is an active real estate broker in the state of Georgia and is the writer behind The Wealth Increaser, Home Buyer 411,  Home Seller 411, The 3 Step Structured Approach to Managing Your Finances, Managing & Improving Your Credit & Finances for this MILLENNIUM and CREDIT & FINANCE IMPROVEMENT MADE EASY—FREE GUIDE. 

He is the creator of where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner.  He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. 

You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page. 

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Thomas (TJ) Underwood has been providing financial advice as a tax practitioner since the mid 1980’s and began his financial planning career (while earning a Bachelor of Science Degree in Business Administration/Finance/Marketing), in Detroit at Wayne State University.  From 2010 up to the present he continues to provide visitors timely personal finance and wealth building advice and articles—including real estate advice—on 3 sites that he has created since 2010. 

Even though he is an active real estate Broker in the Atlanta Metropolitan area, he continues to blog consistently to help visitors and those who desire lasting financial and life changing success the opportunity to change their life for the better in a more efficient way. 

You can learn more about him and gain access to all three sites that he has created by going to Who is the creator of page.

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