Mortgage Talk - New MassHousing Mortgage Program Requires No Down Payment

Can allow qualified buyers to purchase first home with 100% financing...
Frank Merola is Executive Mortgage Banker for William Raveis Mortgage LLC.

MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts. MHFA is one of the larger lenders in the state of Massachusetts with a network of more than 160 banks, credit unions and mortgage companies that offer their products. MassHousing mortgages currently finance up to 97 percent of a home purchase price. They recently announced the MHFA 100 loan program. 


The MHFA 100 product is a DPA or Down Payment Assistance loan that is designed to promote home ownership and lower the barriers to achieving the American dream in the Commonwealth of Massachusetts, including the Sandbar known as Cape Cod.  It will allow qualified homebuyers to finance up to 100 percent of the purchase price of their first home.

How does the loan work?

  • The Agency’s new down payment assistance program will finance up to an additional 3 percent of the purchase price, allowing for up to 100 percent financing for creditworthy income-eligible borrowers.
  • The down payment assistance will be a fully amortizing 15-year, fixed-rate second mortgage, with an interest rate of 1 percent.
  • The down payment assistance loan will carry no additional fees, and will be due in full upon the sale or refinancing of the property.
  • Down payment assistance will be capped at 3 percent of the purchase price, up to $12,000.
  • If a buyer utilized the down payment assistance instead of putting down 3%, the payment on the $12,000 second adds roughly $74 per month to their payment.

How does one qualify for the MHFA 100?

  • In order to use MassHousing financing to purchase a single-family or condominium unit, the individuals on the mortgage must make a household income below the median income and that number varies by county. Currently, eligible households in Barnstable County must earn below $121,770 per year.
  • Homebuyers accessing down payment assistance must still meet MassHousing’s underwriting criteria, including minimum credit score. Borrowers should try to have their middle FICO credit score be no less than 660.
  • Debt-to-income qualifications are also fairly liberal with this program allowing a total ratio not to exceed 41% of gross income. Those with higher FICO scores and down payments may be able to qualify higher and should check with their mortgage banker.
  • Lastly, Borrowers have to attend a homeownership education class which can often times be done online.

If you have any questions about this fantastic program feel free to call or email me. Thanks for making it this far!

Frank Merola

Executive Mortgage Banker

NMLS Mortgage Loan Originator ID: 1020051

William Raveis Mortgage LLC NMLS ID #2630

Cell 508-740-5922

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