We bought our (current, first) house through NACA in spring 2009. It is legit but a huge, huge pain.
The good:
1. We bought our rate down to 1.625%. So it does not make sense to ever pay extra to pay it off early. We can use our money in other ways.
2. Having such a low rate means our monthly payment is low, so we were comfortable with our PITI. We live in a NE state with high property taxes.
The bad:
1. The paperwork hassle. Our NACA office frequently lost paperwork. What should have been one fax often meant sending three times.
2. You still have a version of PMI. It's an extra $50 monthly included in our PITI. It goes to NACA. I am not sure this ever goes away.
3. Repairs requirement: You are required to address every code violation and item the inspector identifies as needing repair within the next few years. For us, this added another $15k to the purchase price, even though an old gas furnace was the only thing remotely pressing. (Consequently, despite the low rate, it took a while to get the principal below the purchase price.) It also added lots of headaches. You have to get bids and arrange for the work to be done within the first month or so of closing, and go through NACA for contractor approval and payment.
If you are willing to put up with the bad parts, and can get your rate to zero, AND find a house in very good condition, it might be worth it for you.