Think you can’t afford to buy your own home? Think again
By Natasha Boye, Esq. and Angelo Nuby, MassHousing
Owning your own home has been a part of the American Dream for decades.
Yet the dream can seem out of reach for many, especially people with modest incomes and persons of color.
MassHousing may not be the first bank or mortgage lender you think of, but we offer one of the best opportunities for you to move from renter to owner and to build your family’s financial future.
Why own rather than rent?
First, there is the satisfaction of ownership. You can paint the walls any color you want and make other changes and improvements to suit you and your family.
Second, home ownership is usually a good investment, where the value of the home increases over time. If a home increases in value, it can be sold for a profit, used as collateral to borrow against or passed on to family members. Economists consistently cite home ownership as the number one way in which American families build wealth.
Unlike the rent you pay each month to a landlord, your monthly mortgage payment on a home that you own means you own a little more of that property than you did the month before. It’s called building equity. It means money in your bank account, not your landlord’s.
Barriers to home ownership.
As real estate professionals, we hear all the time about the many barriers standing between you and your own house or condo. We get it!
Saving up for a down payment can be challenging and time consuming. Knowing who to trust for a loan can provoke anxiety. You may know people who have had bad loans that caused them sleepless nights.
Fear of losing your job can keep you from committing to ownership as well.
Then there is general confusion over the process of buying a home and all the legal issues and terminology.
MassHousing was created specifically to help the first-time home buyer.
In the 1970s, some progressives in the legislative and the executive branches on Beacon Hill created The Massachusetts Housing Finance Agency (now MassHousing). One of the main purposes was to provide affordable home loans to people with modest incomes who have traditionally been overlooked by banks and mortgage companies (the other mission is to help build and improve affordable rental housing).
So, you can see, from the very beginning our mission has been to help people buy homes who otherwise might not be able to afford them.
Five decades later, MassHousing is not only providing loans that every year help thousands of people go from renting to owning but is also providing unbiased information to empower and educate people about the home purchase process.
What about that down payment? We can help with that.
Coming up with a down payment is often the biggest barrier to home ownership. But believe it or not, MassHousing can help. Eligible home buyers can receive as much as 5% of the purchase price of a house or condo from MassHousing, up to $25,000 in some instances, or $15,000 in others. To put that in perspective, $15,000 would be 5% of a property that is sold for $300,000.
These funds can make all the difference for a buyer who has been unable to save enough, or who does not want to put their last penny into the down payment.
What if you lose your job? We’ve thought of that, too.
Many people who secure a loan from MassHousing automatically receive a job-loss insurance policy from us, at no extra cost. What does it do? If you lose your job and collect unemployment from the state, MassHousing will help make the principal and interest payments on your home loan for up to six months while you find another job.
Every year, and especially during the pandemic, this insurance has helped to keep hundreds of people in their homes and avoid foreclosure.
I don’t know where to start. It seems confusing.
We hear this every day. And it is OK! We work with people just like you to help them better understand the steps to take on the journey to home ownership. Our website www.masshousing.com has pages of information about home buying, along with videos, podcasts, links to helpful websites and more.
On www.masshousing.com you will find links to local nonprofit organizations that provide affordable home buyer education classes – which these days are online, but in non-COVID times are either in-person or online.
You can also speak with our MassHousing home buying experts at 1-888-843-6432 or you can email us at firstname.lastname@example.org.
If you are not a typical bank how do I apply for a MassHousing loan to buy a home?
It’s true, we don’t have branches in brick-and-mortar buildings. Instead, people apply for MassHousing loans through more than sixty banks, credit unions and mortgage companies across Massachusetts. You can find a list of them on masshousing.com. You can click on the names of individual loan officers who know all about MassHousing loans and can help you apply when you are ready. We only work with trustworthy, reputable lenders who meet our strict criteria for ethical lending and customer service practices.
The internet is full of offers for low-cost loans to buy a home. Why would I choose to travel the road with MassHousing?
First and foremost, we are about people, not profits. We have a public mission to make responsible loans and to encourage home ownership for people in Massachusetts who have modest incomes and to help those who have historically been left behind.
Second, many home buyers focus too much on just the interest rate, and disregard other elements of the home loan, the lender, and the process. Only at MassHousing will you find so many benefits in one place – educational materials, competitive interest rates, down payment assistance, job-loss protection and other favorable terms that make the home more affordable for the long term.
Remember, MassHousing loans are made through select private-sector banks and mortgage companies who have a business relationship with us. You will not be applying to the government for a loan. The process is the same as applying for a loan from any bank or lender. But behind the scenes, the money and the benefits are made possible by MassHousing.
We’re in the community. Get to know us.
We are both regularly in the neighborhoods served by The Banner. We are telling people about MassHousing and spreading the good word about our mission to help people buy homes. Reach out to us any time if you think you are ready to take steps on the road to home ownership. You can find us at email@example.com and firstname.lastname@example.org.