MassHousing is a not for profit public agency in Massachusetts that offers home loans. They do not depend on taxpayer funds and are a self-supporting agency. Home buyers may want to consider a MassHousing loan as it can be more affordable than an FHA loan. It can be used for 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 additional information on MassHousing mortgages for Ipswich MA real estate homebuyers.
MassHousing Mortgage Amounts and Limits
Under MassHousing, mortgage amounts up to 97% of the property value are allowed on single family units and condos, and up to 95% on multi-family real estate. FannieMae loan 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 make any contribution from their own funds. This allows borrowers to obtain the funds for the down payment and closing costs as a gift from a family member or via concessions from a member of the transaction (i.e. the seller). Multi-family mortgages require buyers to use 3% of of their own funds, verified through bank statements or other financial documentation. The remainder of the funds needed to close can be received as gifts or concessions. Lastly, there are income limits that vary by area and property type.
Mortgage Insurance Percentages
Mortgage Insurance Introduction
Mortgage insurance is typically incurred on loans for greater than 80% of the sale price. It is usually charged as a large up-front premium due at closing and monthly amounts (calculated on a percentage of the initial loan balance). At the time this blog was written, the FHA mortgage insurance premium was 1.15% of the mortgage. On a $200,000 home with 3% down payment, the cost would be $1,930 up-front and $186/month.
MassHousing Option with NO Mortgage Insurance
Mortgage rates on MassHousing loans are traditionally a little bit higher than FHA, however, the mortgage insurance amounts are lower. MassHousing actually provides mortgage options with or without mortgage insurance. The program with mortgage insurance has no up-front amount and a lower monthly amount. When this blog was written, the premium was 0.60%. For the same $200,000 property mentioned earlier, the monthly amount is $97 (compared to $186 through FHA). A home buyer using MassHousing would save money over FHA even with a marginally higher interest rate. The savings are even better with the MassHousing no mortgage insurance alternative.
Benefits of MassHousing Mortgages For Ipswich MA Real Estate Homebuyers
MassHousing programs are a cost effective option for home buyers in Massachusetts who qualify. Similar to FHA, it accommodates low down payments but with lower mortgage insurance premiums. It can be used on single family, condo, and multi-family real estate (with up to 4 units). Interest rates are fixed for a 30-year repayment period, ensuring unchanging payment amounts for home buyers. The MassHousing Mortgages For Ipswich MA Real Estate Homebuyers above is offered 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 provide you with a list of reputable providers of MassHousing mortgages. You may reach me, John Wells, at Wellsco Realty via phone at 978-518-1481 or email at firstname.lastname@example.org.