MassHousing is a not for profit public agency in Massachusetts that provides financing. They do not use taxpayer dollars and are a self-supporting agency. Home buyers should consider a MassHousing loan as it may be more economical than an FHA loan. It may be applied towards a purchase or refinance of a single family, condo, or multi-family (2, 3, or 4 family) that a buyer intends to use as a primary residence. Below is more information on MassHousing programs for Burlington MA home buyers.
MassHousing Loan Amounts and Limits
Under MassHousing, loan amounts up to 97% of the purchase price are allowed on single family homes and condos, and up to 95% on multi-family properties. FannieMae loan limits also apply and can be reviewed at the Fannie Mae website. For single family and condo purchases, no buyer contribution is needed. This means that borrowers can obtain the funds for the closing as a gift from a family member or via credits from a party in the transaction (i.e. the seller). Multi-family properties require home buyers to contribute 3% of their personal money, confirmed through bank statements or other financial paperwork. The remainder of the the down payment and closing costs can be covered by gifts or credits. Lastly, there are income limits which differ by city and property type.
Mortgage Insurance Amounts
Mortgage Insurance Introduction
Mortgage insurance is normally required on loans for more than 80% of the purchase price. It is often charged as a large up-front premium paid at closing and monthly payments (based on a percentage of the loan). When this blog was published, the FHA mortgage insurance premium 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 Option with NO Mortgage Insurance
Interest rates on MassHousing loans are traditionally a little bit higher than FHA, however, the mortgage insurance amounts are less. MassHousing actually offers mortgage options with or without mortgage insurance. The program with mortgage insurance has no up-front fee and a lower monthly rate. When this article was prepared, the premium was 0.60%. For the same $200,000 home mentioned above, the monthly amount would be $97 (as opposed to $186 through FHA). A person using MassHousing would save money over FHA even with a slightly higher interest rate. The savings are even greater with the MassHousing no mortgage insurance option.
Benefits of MassHousing Programs For Burlington MA Home Buyers
MassHousing programs are an economical alternative for real estate buyers in Massachusetts who qualify. Similar to FHA, it accommodates low down payments but with lower mortgage insurance premiums. It can be used on single family, condo, and multi-family real estate (with up to 4 units). Interest rates remain the same for a 30-year repayment period, ensuring unchanging mortgage payments for home buyers. The MassHousing Programs For Burlington MA Home Buyers above is provided as an introduction and is based on facts available at the time this article was written. Terms and other details may be adjusted by MassHousing at any time. For a list of reputable providers of for Burlington MA home buyers, contact Peter DaMore with Law Offices of Peter T. DaMore Jr., at 781-229-7900 or firstname.lastname@example.org.