MassHousing is a non-profit public agency in Massachusetts that offers financing. They do not use taxpayer dollars and are self-supporting. Home buyers should consider a MassHousing mortgage as it may be more beneficial 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. Find additional details below on MassHousing financing for MA home homeowners.
MassHousing Loan Amounts and Limits
Under MassHousing, mortgage amounts up to 97% of the home value are allowed on single family properties and condos, and up to 95% on multi-family real estate. FannieMae financing limits must also be observed and can be reviewed at the Fannie Mae website. For single family and condo purchases, Buyers are not required to make any contribution from their own funds. This means that buyers can obtain the necessary money for the closing as a gift from a family member or as credits from a party in the transaction (i.e. the seller). Multi-family mortgages require home buyers to use 3% of of their personal money, verified through bank statements or other financial paperwork. The remainder of the the down payment and closing costs may be covered by gifts or credits. Lastly, there are income limits which range by area and the type of property.
Mortgage Insurance Percentages
Overview Mortgage Insurance
Mortgage insurance is traditionally required on home loans for more than 80% of the sale price. It is often billed as a large up-front premium paid at closing and monthly amounts (based on a percentage of the loan). When this blog was prepared, the FHA mortgage insurance rate was 1.15% of the mortgage. On a $200,000 property 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 traditionally slightly higher than FHA, however, the mortgage insurance premiums are lower. MassHousing actually offers financing solutions with or without mortgage insurance. The program with mortgage insurance has no up-front fee and a lower monthly amount. When this blog was prepared, the premium was 0.60%. For the same $200,000 real estate described earlier, the monthly amount is $97 (instead of $186 through FHA). A home buyer using MassHousing would save money over FHA even with a marginally higher interest rate. The difference is even greater with the MassHousing no mortgage insurance program.
Advantages of MassHousing Financing For MA Home Homeowners
MassHousing loans are a less expensive option for home buyers in Massachusetts who qualify. Similar to FHA, it accommodates low down payments but with lower mortgage insurance fees. It can be used for single family, condo, and multi-family real estate (with up to 4 units). Interest rates will not change during the 30-year repayment period, ensuring unchanging mortgage payments for home buyers. The MassHousing Financing For MA Home Homeowners in this blog are provided as an overview and is based on facts available at the time this blog was prepared. Terms and other information may be altered by MassHousing at any time. As a local real estate agent, I can refer you to reputable providers of MassHousing financing. You may reach me, Jonathan de Araujo, at William Raveis Real Estate via phone at 339-200-9444 or email at jonathansrealestate@gmail.com.
