NACA Program | Income Requirements 2025

Buy your dream home with a NACA mortgage

Dreaming of homeownership but worried you can’t afford it? NACA could be the opportunity you’ve been waiting for. With no down payment, no closing costs, and no credit score requirement, the NACA program has helped thousands of buyers—especially those with lower incomes—get into affordable homes.

In this guide, we’ll cover how to apply for a NACA loan, compare NACA vs FHA loans, and explore NACA loan alternatives in case it’s not the right fit for you.

In this article (Skip to...)

• What is NACA?
• NACA program requirements
• NACA income requirements
• NACA programs
• Applying for a NACA loan
• NACA pro and cons
• NACA alternatives
• FAQ

What is the NACA program?

NACA, or the Neighborhood Assistance Corporation of America, is a non-profit organization dedicated to economic justice through homeownership and community advocacy. Its mission focuses on providing affordable housing solutions and financial counseling to ensure people of all economic backgrounds can purchase their dream homes.

NACA offers a variety of housing programs for both home buyers, homeowners, and renters. Among these, the NACA Home Purchase program, which is branded as “America’s Best Mortgage,” is a specialized loan program designed to provide accessible mortgage options without the financial hurdles typical of traditional loans, such as down payments and high interest rates.

How does the NACA program work?

Instead of directly underwriting mortgages, NACA prepares its members for homeownership through comprehensive counseling and a thorough application procedure. Members are then paired with partnered banks that offer financing.

With this in mind, the NACA program stands apart from traditional mortgage pathways. Rather than prioritizing credit scores, it emphasizes the importance of a consistent payment history over the prior 12 months, such as timely rent payments. While welcoming individuals of all income brackets, the NACA program is particularly beneficial for those earning below their area's median income (AMI), by providing unique NACA program requirements that cater to low- to moderate-income individuals.

NACA program requirements

Before getting started, anyone interested in the NACA home buying program should understand its key requirements. To qualify, applicants need to meet several specific criteria.

To help prospective NACA homeowners understand what's expected of them and how they might fit within the program's criteria, here's a comprehensive guide to NACA program requirements.

NACA income requirements

The NACA program focuses on assisting low to moderate-income individuals achieve their dream of homeownership by offering mortgages with affordable terms. To qualify for a NACA mortgage, applicants must meet specific NACA income requirements that are based on the area's median income, household size, and property location.

Applicants must demonstrate that their income falls within the defined brackets by providing detailed documentation, such as pay stubs, tax returns, and bank statements. This process allows NACA to assess the stability of an applicant's income and ensure they have a reliable financial source to support homeownership.

Additionally, the NACA income limits will vary depending on whether applicants are classified as priority or non-priority members.

NACA credit score

With most mortgage programs, you typically need a minimum credit score of 580 to 620 to qualify.

The NACA program, on the other hand, doesn’t rely on credit scores. Instead, the program examines your payment history over the previous 12 months. NACA wants to see that you've consistently paid your rent and other obligations on time over the last year.

If your credit score falls short of the typical minimums, NACA’s approach could be invaluable.

NACA debt-to-income ratio

As a general rule of thumb, your total monthly debt payments, including your future mortgage payments, shouldn’t exceed 40% to 43% of your gross monthly income. This is known as your debt-to-income ratio, or DTI.

Also, NACA limits borrowers' mortgage payments to 31% of their gross monthly income.

For instance, if your pre-tax monthly income is $4,000, your monthly mortgage payment would have to be $1,240 or less to be eligible for the NACA program.

NACA loan limits

NACA loans cannot exceed the conforming loan limit for an area. In 2025, the limit for a single-family home is $ in most areas and $ in high-cost areas. 

This means that the purchase price of the home you're considering should align with these limits to qualify for a NACA loan.

NACA membership

As you begin the process of buying a home through NACA, you’ll be required to become a NACA member. The U.S. Department of Housing and Urban Development (HUD) has certified NACA as a nonprofit organization.

Membership dues are currently $25 a year, which is reasonable. But as a NACA member, you’ll also pledge to volunteer for NACA’s advocacy campaigns in your area.

NACA members enjoy several additional benefits:

• Access to NACA's Best in America Mortgage
• Ability to buy down the interest rate for an even lower mortgage payment
• Option to include home repairs and renovations in the mortgage amount
• Ongoing post-purchase support and financial assistance if needed

Another important distinction is that NACA members fall into two categories: priority members and non-priority members, each with specific benefits.

Priority members

Priority members are individuals whose income is at or below the Area Median Income (AMI) for their area. They enjoy greater flexibility in their home-buying process, including:

• Access to lower interest rates.
• No geographical restrictions on home purchases.
• Full access to all NACA program benefits.

Non-priority members

Non-priority members have incomes exceeding the AMI. While they can still participate in the NACA program, they must:

• Purchase homes in designated “priority areas.”
• Adhere to certain restrictions, but still benefit from favorable loan terms, including no down payment and below-market interest rates.

Understanding these distinctions is crucial as you navigate the NACA homebuying process and leverage the benefits available to you as a member.

Payment shock savings

If your new mortgage payment exceeds your current rent, the NACA program requires you to maintain "payment shock” savings to compensate for the payment difference. 

Let’s say you pay $1,000 per month for rent, but your new mortgage payment will be $1,300 per month. NACA will require that you save an extra $300 every month (for a minimum of 3 to 6 months) before you’re qualified. You must keep this money in savings throughout the closing.

Eligible property types

You can only use the NACA home purchase program to buy an owner-occupied primary residence. This includes single-family homes and units in condos, co-ops, and other mixed-use buildings.

You can’t use any NACA programs to buy a second home or an investment property. Nor can you use NACA if you own other properties. 

The only exception is if you’re buying a multi-family home. You can live in one of the units and rent out the others. Before qualifying, though, the NACA program requires the completion of a “recognized” landlord training course. Also, you must maintain at least two months of mortgage payments in reserves.

Types of NACA housing programs

Buying your first home can feel impossible with sky-high down payments and strict credit checks. Luckily, NACA programs open the door to affordable homeownership with benefits like no down payments or closing costs, easier credit and income requirements, and housing counseling.

NACA Home Purchase program

Branded as "America's Best Mortgage," this NACA Home Purchase program is designed to remove the financial barriers that often prevent individuals from buying a home. Among several offerings that NACA calls its economic justice loans, this mortgage program is designed to make homeownership more affordable.

• No down payment required: Buyers do not need to save for a large down payment.
• No closing costs: This reduces the upfront expenses typically paid at closing.
• No fees: Eliminates additional costs associated with loan processing.
• No mortgage insurance: Reduces monthly payments by removing the need for private mortgage insurance.
• Low interest rates: Provides affordable monthly mortgage payments over the life of the loan.

HOT-PHA (Section 8/Housing Choice Voucher)

The HOT-PHA allows Section 8 or Housing Choice Voucher recipients to become homeowners by combining their vouchers with NACA program benefits. 

• Combines Housing Choice Vouchers with a NACA mortgage
• Potential for mortgage-free homeownership in 20 years or less
• No additional cost to housing authorities

City One-Dollar Homeownership Program

This NACA program, in partnership with local housing authorities, provides residents with an opportunity to buy vacant properties for just one dollar, along with financing for any necessary renovations or new construction. 

• Homes or lots are available for $1
• Financing for repairs, renovations, or new construction
• Focus on neighborhood revitalization and community engagement

NACA's New Construction Homes

NACA provides affordable, high-quality modular homes that are designed to exceed standard building codes and offer a cost-effective solution for families looking to own a home.

• Affordable modular homes with high-quality standards
• Prices are often below market rates
• Built to resist severe weather conditions and blend in with the surrounding communities

Homebuyer Purchase & Renovation Program

This NACA housing program allows home buyers to finance both a home purchase and any necessary renovations, all with one mortgage. This loan includes features like a rehab escrow and support through NACA's HAND department for a seamless renovation process.

• A single NACA loan to finance both the purchase and renovation
• No mortgage payments required during the first six months of renovation
• Financial assistance and support through the renovation process

Refinance & Renovation

Through this program, NACA homeowners have a refinancing option to fund critical home repairs and renovations. Eligible home improvements must improve living conditions while preserving the home's value.

• Refinancing options for repairs and renovations
• Focus on addressing significant issues like safety and structural integrity

Home-Save Program

The Home-Save Program is intended to prevent foreclosure and assist distressed homeowners with unaffordable mortgages, with a focus on permanent, affordable loan term adjustments.

• Assistance for NACA homeowners with unaffordable mortgage payments
• Advocacy for permanent loan modifications

Housing Counseling

NACA provides extensive housing counseling to both prospective home buyers and current homeowners. This NACA program is a cornerstone of the organization’s efforts to ensure individuals are well-prepared for the responsibilities of homeownership and to assist homeowners in maintaining their investments affordably.

• Comprehensive housing and financial counseling for all NACA members
• Advocacy for affordable mortgage solutions
• Support and financial assistance for homeowners in distress

Rental Housing Program

This NACA program offers housing counseling and advocacy to support renters through education and access to resources.

• Counseling for renters on housing stability and rights
• Connections to rental assistance and affordable housing resources
• Advocacy against predatory landlord practices

How to apply for a NACA home loan

If you're interested in applying for a NACA home loan, the process looks a little different than a traditional mortgage. You won’t go through a bank or typical lender. Instead, you’ll become a NACA member, attend a homebuyer workshop, and work closely with a NACA counselor to get financially prepared.

It’s a more hands-on process, but for many buyers, the tradeoff is worth it. Understanding how to apply for a NACA home loan can help you decide whether getting a NACA mortgage makes sense for your situation.

1. Attend a homeownership workshop

This is the first step when applying for a NACA home loan. The workshop not only provides information about homeownership but also explains how the NACA program works in detail. Workshops are held multiple times throughout the month in different cities. To find a workshop near you, visit naca.com. If you can’t drive to a NACA office, you can attend a virtual homeownership workshop.

2. Meet with a housing counselor

To apply for a NACA home loan, you’re also required to meet with a housing counselor. Your counselor reviews your income and current debts to gauge your financial readiness to purchase a home. They’ll determine how much you can spend on a house. If you’re not financially ready, your counselor will provide instructions on becoming NACA-qualified and then help monitor your progress.

3. Attend a purchase workshop

Once you’re NACA-qualified, you’ll attend a home purchase workshop to learn more about the home buying process. You’re also assigned an in-house real estate agent who you’ll work with to find a home within your budget. A NACA qualification is only valid for six months. If you don’t buy a house within this timeframe, you’ll have to re-qualify for the NACA program.

4. Request a qualification letter

Once you’ve found a house, contact your housing counselor to request a qualification letter. This letter proves that you’re qualified to buy the home. You’ll include it with your purchase offer. This step is crucial in the NACA program process, as it helps streamline your offer and shows sellers that you are a serious buyer.

5. Wait for the home inspection

Homes financed with a NACA mortgage must be in good condition. A NACA-approved home inspector and pest control company will visit the property. Issues with the property must be fixed before closing.

6. Meet with your mortgage consultant

The final step in applying for a NACA home loan is meeting with a NACA-approved lender to complete your application.  NACA doesn’t create loans. Instead, a private lender (typically Bank of America) issues funds.

Your in-house mortgage consultant will confirm that you’re still NACA-qualified. In addition, they’ll check to ensure that your income, employment, debt load, and credit history remain positive. Finally, the lender begins processing your loan and then schedules a closing date.

7. Receive post-purchase assistance

You can also take advantage of NACA's Membership Assistance Program (MAP). This post-purchase assistance includes additional homeownership, budgeting guidance, and hardship relief.

NACA program support services

The NACA program offers a full range of services to support first-time home buyers before, during, and after their home purchase. Here’s what NACA members can expect:

• Membership Assistance Program (MAP): Short-term financial assistance for NACA homeowners facing temporary hardships that impact their ability to make their mortgage payment.
• Pre-purchase housing counseling: One-on-one sessions with a dedicated NACA counselor to guide buyers through the home buying process, build a budget, improve their credit score, and determine an affordable mortgage payment.
• Financial management support: Help with budgeting, debt reduction, and savings plans to prepare for homeownership and long-term financial health.
• Homebuyer workshops: Required sessions that educate buyers on NACA’s process, the realities of homeownership, and how to work effectively with a real estate agent and NACA counselor.
• Post-purchase education: Ongoing workshops covering home maintenance, repairs, and responsible financial management after closing.
• Foreclosure prevention assistance: Access to the NACA Home Save Program, which helps struggling homeowners avoid foreclosure and stay in their homes.

NACA mortgage pros and cons

Thinking about applying for a NACA home loan? Here’s a quick look at the NACA mortgage pros and cons so you can decide if it’s the right fit.

Pros:

• No down payment means you won’t need to save up thousands just to get started—it’s one of the biggest draws of the program.
• No closing costs take a huge weight off your shoulders, since NACA covers fees that most buyers usually have to pay out of pocket.
• No PMI is required, so you won’t be stuck with that extra monthly charge that usually comes with low-down-payment loans.
• Below-market interest rates make your loan more affordable over time, and you can even buy the rate down to get it closer to zero.
• Credit flexibility is a big plus. NACA looks at your full financial picture instead of judging you based on a single credit score.
• Comprehensive counseling helps set you up for success, with support from a NACA counselor to get your finances in shape before you buy.

Cons:

• Geographic limitations might make things tricky if you’re looking outside NACA’s approved areas—not every ZIP code is eligible.
• Income-based pricing means higher rates for borrowers who earn above the area median income
• Takes longer to close compared to traditional loans, since the process includes workshops, counseling, and a detailed financial review.
• Price caps can limit housing options in higher-cost areas, even if your income would qualify you for a bigger loan elsewhere.
• Ongoing commitment is required, with participation in NACA events even after you’ve bought your home.

NACA vs FHA loans vs VA loans

A NACA loan can be an incredible deal, but it's not for everyone. If you're exploring NACA loan alternatives, it helps to compare the basics side-by-side. Here's how NACA, FHA, and VA loans compare.

NACA loans:

• No down payment, no closing costs, and no PMI
• No credit score requirement
• Comes with a below-market interest rate
• Requires full NACA membership, comprehensive counseling, and longer to close
• Limited property types

FHA loans:

• Minimum 3.5% down payment
• Accepts lower credit scores (580+)
• Rates are competitive but based on lenders and your credit score
• Includes mortgage insurance, often for the life of the loan
• More flexible property types

VA loans:

• No down payment or PMI
• No official credit score minimum, but most lenders look for 620+
• Often the best mortgage rates available
• Only for eligible veterans, active-duty service members, and some spouses
• Faster underwriting than NACA, more flexible than FHA

When it comes to NACA mortgage pros and cons, you’re trading speed and flexibility for long-term savings. If you're weighing NACA vs FHA loan options, think about what matters more to you: upfront savings or speed and flexibility.

NACA loan alternatives

FHA and VA loans aren’t the only NACA loan alternatives out there. Whether you need a faster process or more flexible terms, these five lesser-known options are worth considering.

1. Down payment assistance programs: Often considered the best NACA loan alternative, these local or state-backed programs offer grants or low-interest second mortgages to help cover your down payment and sometimes closing costs.
2. First-time home buyer programs: If you're looking for NACA loan alternatives, local and national programs for first-time homebuyers can offer valuable support through homebuyer education, reduced fees, and access to tailored mortgage options.
3. National Home Buyer Fund: Another popular alternative to NACA loans, this nationwide non-profit provides grants up to 5% of your loan amount, along with forgivable second mortgages at 0% interest. It's available in all 50 states and open to repeat buyers as well.
4. Chenoa Fund: A well-known NACA mortgage alternative, the Chenoa Fund supports buyers with low-to-moderate incomes by offering down payment assistance alongside FHA or conventional loans. Repayment options vary, including fully forgivable second mortgages.

NACA program FAQ

What if I don't qualify for the NACA program?

NACA isn’t for everyone, and that’s okay. If you're comparing NACA vs FHA loans or just looking for NACA loan alternatives, there are plenty of ways to buy a home with little money down.

Not sure how to apply for a NACA home loan or what your best option is? Click the links below to explore lenders and find a mortgage that fits your budget.