MassHousing is a not for profit public agency in Massachusetts that offers financing. They do not rely on tax revenues and are a self-supporting agency. Buyers may want to evaluate a MassHousing home loan as it may be more economical than an FHA loan. It may be applied towards a new purchase or refinance of a condo, single family, or multi-unit (2, 3, or 4 family) that a buyer plans to occupy as a primary residence. The following are details on MassHousing loans for Waltham MA home buyers.
MassHousing Home Loan Limits
With MassHousing, loan amounts up to 97% of the sale price are permitted on single family homes and condos, and up to 95% on multi-family buildings. FannieMae mortgage limits also apply and can be reviewed at the Fannie Mae website. For single family and condo homes, no buyer contribution is necessary. This allows borrowers to get the money for the closing from family as a gift or as credits from a member of the transaction (i.e. the seller). Multi-family purchases require buyers to contribute 3% of their own funds, verified by bank statements or other acceptable paperwork. The remainder of the down payment and closing charges may be covered by gifts or concessions. Lastly, there are income restrictions which differ by county and property type.
Mortgage Insurance Premiums
What is Mortgage Insurance
Mortgage insurance is typically charged on financing for more than 80% of the sale price. It is often assessed as an up-front charge and monthly payments (using a percentage of the loan). When this article was published, the FHA mortgage insurance premium 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 Loan without Mortgage Insurance
Mortgage rates on MassHousing home loans are usually slightly higher than FHA, but the mortgage insurance premiums are more favorable. MassHousing actually offers financing options with or without mortgage insurance. The program with mortgage insurance has no up-front fee and a reduced monthly amount. When this blog was written, the premium was 0.60%. For the same $200,000 home mentioned earlier, the monthly premium would be $97 (as opposed to $186 through FHA). A home buyer using MassHousing would have less a payment over FHA even with a slightly increased interest rate. The savings are even better with the MassHousing no mortgage insurance option.
Advantages of MassHousing Loans For Waltham MA Home Buyers
MassHousing programs are a cost saving alternative for real estate consumers in Massachusetts who qualify. Similar to FHA, it permits low down payments but with less expensive mortgage insurance costs. It can be used for single family, condo, and multi-family residences (with up to 4 units). Interest rates remain the same for a 30-year repayment period, providing unchanging mortgage payments for borrowers. The MassHousing Loans For Waltham MA Home Buyers above is shared as an introduction and was written using programs available at the time this article was written. Terms and other details may be updated by MassHousing at any time. As a local real estate agent, I can provide you with a list of reputable providers of MassHousing loans. You may reach me, John Montanaro, at Renaissance Realty via phone at 617-484-2494 or email at giam24@aol.com.
