MassHousing is a not for profit public agency in Massachusetts that provides home loans. They do not use taxpayer dollars and are a self-supporting agency. Home buyers should evaluate a MassHousing financing program as it can be more beneficial than an FHA loan. It can be applied towards a purchase or refinance of a single family, condo, or multi-family (2, 3, or 4 family) that a buyer plans to occupy as a primary residence. Below is more information on MassHousing home loans for Woburn MA home buyers.
MassHousing Mortgage Amounts and Limits
Under MassHousing, mortgage amounts up to 97% of the purchase price are permitted on single family properties and condos, and up to 95% on multi-family buildings. FannieMae mortgage limits must also be observed and can be found on the Fannie Mae website. For single family and condo purchases, Buyers are not required to submit any contribution from their own money. This means that buyers can obtain the necessary money for the down payment and closing costs as a gift from a family member or as credits from a member of the transaction (i.e. the seller). Multi-family loans require home buyers to use 3% of of their own money, confirmed through bank statements or other financial documentation. The rest of the funds needed to close can be covered by gifts or credits. Lastly, there are income limits which differ by city and the type of property.
Mortgage Insurance Considerations
Mortgage Insurance Introduction
Mortgage insurance is generally required on home loans for more than 80% of the purchase price. It is usually charged as a large up-front premium due at closing and monthly amounts (based on a percentage of the initial loan balance). When this blog was published, the FHA mortgage insurance rate was 1.15% of the mortgage. On a $200,000 home with 3% down payment, the amount would be $1,930 up-front and $186/month.
MassHousing Alternative with NO Mortgage Insurance
Mortgage rates on MassHousing loans are often 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 requires no up-front premium and a lower monthly premium. When this blog was written, the rate was 0.60%. For the same $200,000 property described above, the monthly premium is $97 (as opposed to $186 through FHA). A home buyer using MassHousing would save money over FHA even with a slightly higher interest rate. The difference is even greater with the MassHousing no mortgage insurance alternative.
Advantages of MassHousing Home Loans For Woburn MA Home Buyers
MassHousing loans are an economical solution for real estate buyers in Massachusetts who qualify. Similar to FHA, it requires low down payments but with less expensive mortgage insurance costs. It can be used for single family, condo, and multi-family properties (with up to 4 units). Interest rates will not change during the 30-year loan period, ensuring predictable payment amounts for borrowers. The MassHousing Home Loans For Woburn MA Home Buyers above is offered as an overview and is based on programs available at the time this blog was compiled. Criteria and other information may be changed by MassHousing at any time. As a local real estate agent, I can refer you to reputable providers of MassHousing home loans. You may reach me, Scott Strang, at Scott Gregory Group via phone at 781-646-7600 or email at firstname.lastname@example.org.