The home purchase market has turned out to be surprisingly robust during the pandemic. Despite a slowdown in the spring during the strict lockdown, things picked up. Interest rates have remained historically low, and the listing, buying and selling of houses and condos has continued.
Nevertheless, the first-time home buyer in Massachusetts continues to face an uphill climb. Inventory remains low and prices remain high. And COVID-19 has roiled the economic waters and caused real concern among would-be buyers about their long-term economic prospects. Many renters think twice about buying property when the headlines are filled with stories of unemployment.
But life goes on, families grow, and renters continue to seek to become owners.
MassHousing – the state’s affordable housing bank – continues to work to make it possible for people with modest incomes to buy a home in the Bay State. Some very generous benefits are about to get more generous.
There are three reasons a MassHousing loan makes sense for a first-time buyer these days:
Down payment assistance. MassHousing offers down payment assistance that most buyers will find very generous. It can dissolve the major barrier that stands between them continuing to pay rent and their dream of home ownership and equity accumulation. Today, MassHousing offers down payment assistance of up to 5% of the purchase price or up to $15,000, whichever is less. Later this Fall, the maximum amount will rise to $25,000. That is sure to get more buyers off the sidelines. Income and other eligibility restrictions apply.
Job-loss protection. MassHousing offers something almost unheard of in mortgage lending – mortgage insurance that actually protects the borrower and not just the lender. It’s called MIPlus® (MI for mortgage insurance and “plus” for the job loss protection). Borrowers who get mortgage insurance from MassHousing automatically get the job loss benefit at no extra charge. It covers their principal and interest payments (up to $2,000 per month) for up to six months if they become unemployed and can demonstrate they are collecting unemployment benefits. Later this Fall, certain qualified buyers will even be able to obtain MIPlus without making any MI payments at all.
An all-in-one purchase and renovation loan. With home price being as high as they are, the lower-priced fixer-uppers are often the only option for cash-strapped buyers. MassHousing sees this as a great opportunity for first time buyers and has packaged together financing for both the purchase of a home and the associated renovation costs, all in one loan, with one simple mortgage payment every month. There is also a “refinance and renovate” option.
Since REALTORS® are usually the first people buyers meet on their homebuying journey, they are in a unique position to influence the buyer on many aspects of the process, including on where to go to get a loan. A MassHousing loan comes with generous benefits that are sure to empower buyers and make them better candidates to get to the closing table.