Low Down Payment, No MI, Loan Assistance Mortgages
The purchase of your first home is an important financial decision, one that requires a careful analysis of the total cost of home ownership. One aspect of the total cost of owning a home are the loan costs, which will impact the total cost of home ownership for years after the closing date. Fortunately, Massachusetts first-time home buyers have several mortgage programs to consider.
MassHousing First-time Home Buyer Programs
MHM supports affordable home ownership for Massachusetts residents with modest incomes. Although all MassHousing first-time home buyer programs have income limits, many home buyers are surprised by how much income they can earn and still qualify.
MHM has several mortgage programs, which have different features, eligibility requirements and benefits to borrowers seeking their first home loan. Borrowers must complete a first-time home buyer class prior to closing.
MassHousing Mortgage More than 50,000 families have used a simple, straightforward MassHousing mortgage to buy their first home. The MassHousing Mortgage has a variety of benefits for first-time home buyers that are not available with most conventional loan programs, with maximum income limits as high as $128,925 (as of October 26, 2015). For single-family homes, the maximum loan amount is $417,000 and $533,850 for a two-unit property. A loan of up to $645,300 is available for a three-family home and $801,950 for a four-unit property.
MHM loans, which have competitive interest rates and fixed-rate terms, allow for 97 percent financing, with no cash required on single-family homes and condominiums. In other words, the 3 percent down payment can be a gift from someone else. Rate locks of 30 to 75 days are available, as well as non-traditional credit considerations, such as limited credit history. First-time home buyers must still meet a lender’s underwriting requirements. A MassHousing Mortgage loan features MI Plus, a mortgage insurance that helps a homeowner pay their mortgage, up to $2,000 per month, in case of a job loss for up to six months. There isn’t any added cost for MI Plus protection.
Other First-time Home Buyer Loan Programs
There are some other loan programs that are not just for first-time home buyers that Massachusetts home buyers may want to consider. The U.S. Veterans Administration provides a home loan guaranty benefit, the U.S. Department of Agriculture has what are referred to as rural development home loans, and local housing authorities and nonprofit organizations have various mortgage down payment assistance and grant programs.
VA Home Loan The U.S. Veterans Administration helps service members, veterans, and eligible surviving spouses become homeowners by providing a home loan guaranty benefit and other housing-related programs to buy, build, repair, retain, or adapt a home for personal occupancy. Veterans often can purchase a home without any down payment and without mortgage insurance. To be eligible, a borrower must have a good credit score, sufficient income, a valid Certificate of Eligibility (COE), and meet certain service requirements. The length of a borrower’s service or service commitment and/or duty status may determine his or her eligibility for specific home loan benefits.