On June 13, Governor Deval Patrick announced $9 million in new funding for the Massachusetts Homeownership Compact, adding that the first six months of the state’s homeownership compact has been a success with 26 mortgage lender participants and more than 1,000 new homeowner participants.
The Massachusetts Homeownership Compact was established last year to continue state funding of the ONE Mortgage Program and to monitor the state mortgage finance programs, ensuring that they remain sustainable for low- and moderate- income homebuyers and safe for the lending institutions.
“There continue to be pockets of distressed properties in certain communities that require ongoing attention and resources, which is why foreclosure prevention and first time homebuyer education efforts are so crucial,” stated Commissioner of Banks David J. Cotney in a press release announcing the new funding. “Public-private partnerships which allow for innovative ideas such as the compact and for us to reinvest administrative fees directly into communities via grant money are truly the foundation for a stronger housing market.”
The ONE Mortgage Program replaced the previous two-loan program, named the SoftSecond Loan, in June of 2013. The ONE’s predecessor was created in response to Federal Reserve Bank data that showed racial disparities in mortgage loans in the City of Boston. The Massachusetts Housing Partnership, the Massachusetts Bankers Association, and the Massachusetts Affordable Housing Alliance established a double mortgage product, which also included education before and after the purchase. This product led to increased homeownership among low-income African American families, and to a decrease in the delinquency rates among this demographic.
