In an effort to help more people purchase homes, MassHousing, a “quasi-public state agency” in Massachusetts’s, is rolling out a new program that would cover the down payment on a property — up to 3%— for some first-time home buyers, Boston Globe staffer Kathleen Conti reports.
Under the program, income-eligible people using a MassHousing mortgage to purchase their first home will be able to finance up to 100% of the cost. They’ll eventually have to pay back the down payment — through a low-cost secondary mortgage — but they won’t be required to have cash up front.
“You’ve got all kinds of competing interests that you didn’t have 15 years ago like Airbnb [and] foreign investors that are buying up units,” said Chrystal Kornegay, the agency’s new executive director. “And because of limited supply, inventory is really low and that’s driving prices. This is one of the ways we’re hoping to give people the opportunity to have a little bit of a leg up.”
A 15-year second mortgage with a fixed interest rate of 1% and no additional fees would cover the down payment, Conti writes. The loan amount would be capped at 3 percent of the purchase price — which can’t exceed $400,000 — for a single-family home or condominium unit.
To qualify, borrowers would have to adhere to strict requirements, like a minimum credit score, debt-to-income qualifications, and mandatory attendance at a homeownership education class.Read More