MassHousing is a not for profit public entity in Massachusetts that offers mortgages. They do not depend on tax revenues and are a self-supporting agency. Buyers should consider a MassHousing financing program as it may be more economical than an FHA home loan. It can be applied towards a new purchase or refinance of a single family, condo, or multi-unit (2, 3, or 4 family) that a buyer plans to occupy as a primary home. Find additional details below on MassHousing programs for MA home buyers.
MassHousing Mortgage Limits
With MassHousing, mortgage values up to 97% of the sale price are permitted on single family properties and condos, and up to 95% on multi-unit buildings. FannieMae financing limits must also be observed and may be reviewed at the Fannie Mae website. For single family and condo purchases, no borrower contribution is necessary. This allows buyers to receive the necessary funds for the down payment and closing costs as a gift or as credits from a party in the transaction (i.e. the seller). Multi-family loans require home buyers to use 3% of of their personal funds, verified by bank records or other paperwork. The rest of the funds required to close may be received as gifts or concessions. Lastly, there are income limits which range by county and the type of property.
Mortgage Insurance Premiums
Overview Mortgage Insurance
Mortgage insurance is generally required on loans for greater than 80% of the sale price. It is usually billed as an up-front premium and monthly installments (using a percentage of the amount borrowed). When this blog was written, the FHA mortgage insurance rate was 1.15% of the mortgage. On a $200,000 home with 3% down payment, the cost would be $1,930 up-front and $186/month.
MassHousing Alternative with NO Mortgage Insurance
Interest rates on MassHousing loans are usually a little bit higher than FHA, however, the mortgage insurance rates are more favorable. MassHousing actually provides mortgage solutions with or without mortgage insurance. The program with mortgage insurance requires no up-front fee and a lower monthly amount. At the time this article was prepared, the rate was 0.60%. For the same $200,000 property mentioned earlier, the monthly premium is $97 (instead of $186 through FHA). A person using MassHousing would have less a payment over FHA even with a marginally increased interest rate. The savings are even more significant with the MassHousing no mortgage insurance option.
Benefits of MassHousing Programs For MA Home Buyers
MassHousing loans are a cost effective option for real estate buyers in Massachusetts who qualify. Similar to FHA, it allows low down payments but with lower mortgage insurance fees. It can be used to purchase or refinance condo, single family, and multi-family real estate (with 4 units or less). Interest rates are fixed for a 30-year loan period, providing unchanging mortgage payments for home buyers. The MassHousing Programs For MA Home Buyers in this blog are offered as an overview and is based on information available at the time this blog was prepared. Criteria and other details may be altered by MassHousing without written notice. As a local real estate professional, I can provide you with a list of reputable providers of MassHousing programs. You may contact me, Bradford Pratt, at REMAX on the Charles via phone at 781-316-5760 or email at firstname.lastname@example.org.