Real Estate Pictures
Real Estate Pictures

NACA is making homeownership a reality for many people who might otherwise not be able to afford a home. See more real estate images.

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What if I offered you a mortgage with no down payment, no closing costs and no fees? Let's throw in a fixed interest rate that won't rise and fall with the market and peg it at below market rates (4.875% at press time). I'll even make you this offer if you have less-than-perfect credit and a low income. Are you interested?

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Maybe you're interested but think it sounds too good to be true. You're wondering why I'm selling fairy tales when the evening news shows ordinary people fighting foreclosure, bankruptcy and economic uncertainty in the wake of subprime mortgages.

Well, it's true. I can't offer you this deal. But a nonprofit agency known as the Neighborhood Assistance Corporation of America (NACA) can and does offer this mortgage deal to thousands of people each year. While there are no income limits for using NACA, the group has garnered attention for lending to people that most banks would see as a risk -- people with little money in savings, an imperfect credit rating or a pile of debt.

NACA doesn't see this as a gamble, but rather as an investment in the future. The idea is if working people are provided with good rates and education about buying a home, then neighborhoods will stabilize as owners become invested in safe streets and good schools. But NACA is more than a mortgage business. It's also a community advocacy program that tries to organize neighborhoods that will fight for political and social change.

NACA's roots are in activism, and the organization's Web site proudly proclaims that its advocacy style is aggressive and confrontational. The CEO, Bruce Marks, is known as a "junkyard dog" that won't let go once he's got a hold on something [source: Swidey]. NACA often sinks those persistent teeth into lenders and financial institutions that discriminate against and exploit working people with unaffordable loans. The result is usually a big-name bank committing money that NACA uses to provide its affordable mortgages. Or, in the case of a high-profile 2007 agreement, the group won the right to refinance mortgages made unaffordable by bad subprime loans.

Are you wondering how to get one of these affordable mortgages? Are you still wondering what the catch is? On the next page, we'll look at NACA's program requirements and see how it can offer such unbelievable rates.