Mass Housing Mortgage

Home bought with Mass Housing mortgage

Description of Mass Housing Mortgage

The Mass Housing Mortgage offers competitive interest rates with low down payment options to low- and moderate income households for purchases and refinances of owner-occupied properties.

Purchases are not limited to only first time homebuyers – move-up or repeat homebuyers are allowed to purchase a new home provided they do not own any other property at closing. Homeowners can refinance their current mortgage whether or not it is a Mass Housing loan, but cannot take out any additional cash.

MassHousing is committed to offering mortgages to its borrowers that they can afford over the long run. The Mass Housing Mortgage is restricted to a conventional fixed-rate, fully amortizing loan over a 30 year term which traditionally has had the lowest rates of default.

Mass Housing Mortgage Income Guidelines

  • Gross household income is calculated as the sum of all borrower income from any source
    • Income earned by household members not on the note or deed is not included
  • Non-occupying co-borrowers and co-signers are not allowed
  • Must meet Mass Housing Mortgage income limits ranging from $93,015 to $137,565
    • Rental income must be included in total income when determining compliance with income limits
      • 50% market rent used for unoccupied units
      • 75% market rent for 2-unit properties
      • 65% market rent for 3 and 4-unit properties
  • Maximum debt-to-income ratios
    • 41% DTI for 1-unit property up to 97% LTV
    • 45% DTI for 1-unit property up to 95% LTV
    • 58% gross DTI (rental income excluded) for 2-unit properties
    • 68% gross DTI (rental income excluded) for 3-4 unit properties

Mass Housing Mortgage Credit Guidelines

  • Minimum credit score requirements
    • 680 for up to 97% LTV for single family residences or condominiums
    • 660 for up to 95% LTV for 1-2 unit properties; 700 for up to 95% LTV for 3-4 unit properties
    • 640 for up to 80% LTV for 1-2 units properties
  • Non-traditional credit allowed for borrowers with no reported credit scores only (requires 4 credit lines with minimum 12 month history)
  • All collection accounts must be paid in full by closing

Mass Housing Mortgage Property Guidelines

  • Loan amounts limited to :
    • $417,000 for 1-unit property (single-family or condominium)
    • $533,850 for 2-unit property
    • $645,300 for 3-unit property
    • $801,950 for 4-unit property
  • No manufactured housing or cooperatives allowed
  • 600 square feet minimum
  • Deed restricted properties (40B projects) must include full and deed restricted value in appraisal and deed rider must be approved by MassHousing
  • 2, 3 and 4-unit properties must have been first occupied as a residence 5 years prior to closing
  • Newly constructed 2-unit properties are not eligible for financing unless in a targeted area
  • Newly constructed 3-unit and 4-unit properties are not eligible for financing
  • All borrowers must be on the note and deed and occupy the property within 60 days of closing

Condominiums

  • Number of units financed in a condo project cannot exceed MassHousing exposure limits
  • Must meet Fannie Mae standard condo project requirements
  • At least 70% of total units in new or newly converted project in subject phase must be sold/pre-sold as owner-occupied or 2nd home properties
  • 50% owner occupany required for existing projects with more than 4 units
  • Limit of one unit financed in 2-4 unit projects per the following schedule :
    • 2 unit project - 2nd of 2nd unit sold/pre-sold
    • 3 unit project – 2nd of 3rd unit sold/pre-sold
    • 4 unit project – 3rd of 4th unit sold/pre-sold
  • Pre-sold defined as having a fully executed Purchase & Sale agreement with earnest money given and all mortgage contingencies met
  • 2 unit projects must have an executed arbitration agreement
  • HO-6 (“walls-in”) insurance policy is required if master condominium insurance does not cover
    • HO-6 insurance must be escrowed with monthly mortgage payment and included in debt ratios

Mass Housing Mortgage General Guidelines

  • Home buyer counseling required for all first-time homebuyers
  • Landlord counseling required for all multi-unit properties
  • All first-time homebuyers are subject to recapture tax
    • MassHousing offers Recapture Relief Protection and will reimburse the borrower if they incur recapture tax
      • No borrowers have ever had to pay recapture tax to MassHousing’s knowledge
    • Recapture tax is due when all three following conditions are met :
      • Property is sold within 9 years of purchase
      • Property sold for a profit
      • Borrower’s income increases substantially
    • For more information, see Estimating Recapture Tax on Sale of Home
  • No minimum borrower contribution is required for single family residences or condominiums; 3% for 2-4 unit properties
    • Funds needed for down payment and/or closing costs may come from a gift from an acceptable donor as follows :
      • a relative, defined as the borrower’s spouse, child, or other dependent, or by any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or
      • a fiancé, fiancée, or domestic partner
    • Donor providing gift may not be, or have any affiliation with, the builder, the developer, the real estate agent, or any other interested party to the transaction
  • Interested party contributions (including seller) limited to 3% of purchase price
    • Allowed only for 3 and 4-unit properties if LTV is 90% or less
  • Subordinate financing only allowed for approved down payment assistance programs
    • Maximum 105% CLTV
  • Lawful permanent and non-permanent residents are eligible under same terms as U.S. citizens

Other Mass Housing Loan Programs