Mortgage Lenders in Massachusetts Key Terms

Creative options for mortgage lenders representing low to moderate income borrowers in Massachusetts

By Sheila Briggs

The real estate market in Eastern Massachusetts has typically been one of the most expensive real estate markets in the country. In an effort to make home ownership more tangible, the Massachusetts state government has created a number of incentive programs for mortgage lending to low and moderate income home buyers. These mortgage lending programs not only make homes more affordable, these loans reward the use of public transportation and the restoration of property that has been damaged or neglected.

Home of the Brave program

Veterans of the U.S. Military living in Massachusetts are eligible for mortgages through the "Home of the Brave" program. This program does not require a down payment and is available to active duty service and spouses of military personnel killed in active duty. The "Home of the Brave" program is only available for the purchase of a primary residence.
Try: Meetinghouse Bank is a local mortgage lender that has committed to lending up to five million dollars in home loans to applicants that qualify for mortgages through the "Home of the Brave" mortgage program.

Mass Advantage

Mass Advantage loans are available to lower income, first time home buyers. These loans are intended for the purchase of condominiums and multi-family dwellings. Borrowers must have good credit scores and provide a down payment of at least three percent when purchasing their home.
Try: The Massachusetts Housing Finance Agency website details limits that apply to specific cities or towns, such as income and purchase price.

SoftSecond

Massachusetts mortgage lenders may offer home buyers 30 year fixed mortgage rates a quarter to one half of a percent below the market interest rate through SoftSecond loans. These loans combine traditional mortgages with a subsidized second mortgage. Mortgage lenders use SoftSecond loans to assist borrowers in buying more expensive properties. This program is the most successful in Massachusetts for assisting low and moderate income borrowers purchase their first home.
Try: The Massachusetts Housing Partnership provides detailed explanation of SoftSecond mortgages for lenders and borrowers.

MassHousing Purchase and Rehabilitation Mortgages

MassHousing Purchase and Rehabilitation Mortgages allow the mortgage lender to collect one quarter point (0.25 percent) on the loan to cover administration costs. Massachusetts grants purchase and rehabilitation loans to cover the cost of the home purchase as well as the cost of rebuilding the property, up to 97 percent. These loans require a down payment of three percent and require that all construction be completed by licensed contractors.
Try: Basic qualifications for the purchase and rehabilitation loan program are listed on the website for the City of Peabody.

Take the 'T' Home

In an effort to reduce urban sprawl and encourage the use of public transportation, Massachusetts has approved mortgage lenders to grant mortgages with low interest rates and no down payment to frequent riders of Massachusetts public transportation. Borrowers are not required to be first time home buyers, but cannot own more than one home at the time of closing.
Try: Melrose Cooperative Bank is a community bank within service area of the Massachusetts Bay Transit Authority (MBTA) participating in the Take the "T" Home program.

MyCommunity Mortgage

MassHousing provides listings for approved mortgage lenders for the MyCommunity Mortgage program. The MyCommunity program is available to borrowers with an income too high for a MassAdvantage Mortgage. However, there are income limits for borrowers that apply for a mortgage through the MyCommunity program. The income limits for borrowers are contingent upon the community in which the home is purchased.
Try: The website for Deval Patrick, Governor of Massachusetts, provides more details about the MyCommunity and MassAdvantage mortgage loans.