MassHousing Mortgages For MA Real Estate Buyers

MassHousing is a non-profit public agency in Massachusetts that provides home loans. They do not use taxpayer funds and are a self-supporting agency. Home buyers may want to consider a MassHousing loan as it may be less expensive than an FHA loan. It can be applied towards a new purchase or refinance of a single family, condo, or multi-family (2, 3, or 4 family) that will be maintained as a primary residence. Find more facts below on MassHousing mortgages for MA real estate buyers.

MassHousing Loan 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 real estate. FannieMae mortgage limits must also be observed and can be looked up at the Fannie Mae website. For single family and condo purchases, Buyers are not required to submit any contribution from their own savings. This means that home buyers may obtain the necessary funds for the closing as a gift from a family member or through credits from a party in the transaction (i.e. the seller). Multi-family loans require buyers to contribute 3% of their own money, verified through bank statements or other financial documentation. The remainder of the funds needed to close may be covered by gifts or credits. Lastly, there are income limits which differ by city and property type.

Mortgage Insurance Amounts

Definition of Mortgage Insurance

Mortgage insurance is normally included on mortgages for greater than 80% of the property value. It is often charged as a large up-front premium due at closing and monthly payments (calculated on a percentage of the loan). When this article was written, the FHA mortgage insurance rate was 1.15% of the mortgage. On a $200,000 property with 3% down payment, the premium would be $1,930 up-front and $186/month.

MassHousing Program with NO Mortgage Insurance

Interest rates on MassHousing loans are generally a little bit higher than FHA, however, the mortgage insurance rates are lower. MassHousing actually provides mortgage alternatives with or without mortgage insurance. The program with mortgage insurance requires no up-front premium and a lower monthly rate. When this blog was prepared, the rate was 0.60%. For the same $200,000 home mentioned above, the monthly amount would be $97 (instead of $186 through FHA). A buyer using MassHousing would have a lower payment over FHA even with a marginally higher interest rate. The difference is even greater with the MassHousing no mortgage insurance program.

Benefits of MassHousing Mortgages For MA Real Estate Buyers

MassHousing loans are a cost effective alternative for real estate buyers in Massachusetts who qualify. Similar to FHA, it includes low down payments but with less expensive mortgage insurance costs. It can be used to purchase or refinance single family, condo, and multi-family properties (with up to 4 units). Interest rates will not change during the 30-year loan period, ensuring stable payment amounts for home buyers. The MassHousing Mortgages For MA Real Estate Buyers above is provided as an introduction and is based on information available at the time this blog was completed. 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 mortgages. You can contact me, John Wells, at Wellsco Realty via phone at 978-518-1481 or email at teamjohn@johnpwells.com.

About Editor-John P. Wells

I am a resident of Newburyport and have worked in education, high tech and urban development. My interests in architecture and construction are invaluable to my clients. For more information please visit the Wellsco website.