Lowering barriers to home ownership: MassHousing offering new down payment program
BOSTON — MassHousing has launched a new down payment assistance program intended to lower the barriers to home ownership that working households often face.
The program will allow creditworthy low, moderate and middle income households to achieve home ownership without having to make a down payment. Qualified first-time homebuyers will be able to finance up to 100 percent of the purchase of their first home. MassHousing currently finances up to 97 percent of a home purchase price.
"Record-low inventory levels, rising home prices, high rents, and student loan debt are all making it more difficult for the average Massachusetts household to afford to purchase a home," said Chrystal Kornegay, executive director of MassHousing, in a statement. "MassHousing's new down payment assistance program will help ensure that homeownership remains accessible to working families, by allowing creditworthy homebuyers to buy their first home with little to no down payment requirement.
"By boosting the buying power of low-, moderate- and middle-income households, MassHousing will support investment in neighborhoods, help the state's workforce remain rooted in Massachusetts, and advance the Agency's mission of confronting housing challenges facing the Commonwealth, to improve the lives of its people," Kornegay said.
Down payment assistance is available to first-time homebuyers with annual household incomes at or below the area's median income using MassHousing financing to purchase a single-family home or condominium unit.
MassHousing is making down payment assistance loans available to first-time homebuyers with annual household incomes at or below the area median income, using MassHousing financing to purchase a single-family home or condominium unit. The area median income varies by county. Eligible households will earn $103,4000 or less in eastern Massachusetts, $85,700 in Worcester County, and $67,200 in Berkshire County.
Homebuyers accessing down payment assistance must still meet MassHousing's underwriting criteria, including minimum credit score and debt-to-income qualifications, and attend a homeownership education class.
Homebuyers who access down payment assistance must still meet MassHousing's underwriting criteria, which include minimum credit score and debt-to-income qualifications, and attend a homeownership education class. Because MassHousing mortgages currently finance up to 97 percent of a home purchase price, the agency's new down payment assistance program will finance up to an additional 3 percent of the purchase price, allowing for up to 100 percent financing for creditworthy income-eligible borrowers.
Down payment assistance will be a fully amortizing 15-year, fixed-rate second mortgage, with an interest rate of 1 percent. The down payment assistance loan will carry no additional fees, and will be due in full upon the sale or refinancing of the property. Down payment assistance will be capped at 3 percent of the purchase price, up to $12,000. Down payment assistance loans will be internally subsidized by the strength of the agency's existing single-family portfolio.
The program will not require any additional allocation of funds, or the diversion of funds from other agency uses. For more information, visit the MassHousing website at www.masshousing.com.
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