Profile picture for ledarling

Very confused about Mortgage options (MA)

My husband and I are looking to purchase a home in Worcester MA. I am a graduate student, work part time and have lots of student loans. He was planning on purchasing the home himself as he has a great job which he has been at for eight years and no debt (paid off credit cards, car, etc). He has decent credit and enough for a 5% downpayment at the moment but still saving up. He can also afford it on his salary alone.

We would like to buy a single family 2-3 bedrooms that is in need of some renovation but not a total rehab situation. Our realtor has shown us several in the area that could be good options we are just very confused about our financing options.

He was pre-approved for Masshousing but we really do not know what that is. The banker said we would need to do 80/20 to use this option. The website says different. We do not really understand what this is. She also said they will not finance anything below 100k which several in Worcester are below 100k. We are also trying to figure out if Masshousing has any sort of rehab program.

He was also pre-approved for FHA. I have heard since we are married if we go FHA my debt may be figured in or that my credit has to be run even as a non-purchasing spouse? Is this the case in Massachusetts? The 203k or 203b option sounds like it is what we would be looking for but we don't know if he can do it alone. I am sure my student loan debt would make his debt ratio too high.

Lastly we have heard about the "Buy Cities" program does anyone know what that is?

We are looking to see what are the pluses and minuses of each loan. Any help you could offer would be great. Thanks!



  • August 27 2011 - Worcester
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Answers (3)

Mass housing offers a purchase and Renovation program.  If the property needs work you can either go with the MHFA purchase and rehab or an FHA 203K.  As long as your husband doesn't make too much money the MHFA program will likely be the best option.  If he makes too much money or the repairs exceed 35K you can go with an FHA 203K renovation loan.

I would be happy to create a loan comparison for you putting your options side by side.
  • August 29 2011
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Much of this depends on the condition of the property.
If it needs repairs that will disqualify it from regular financing then FHA 203k is the way to go!

If it is in decent "lendable" condition then an FHA 203b program or a MassHousing program will do the trick.

Your debt will NOT be included with MassHousing, but your income WILL be used to be sure you fit their criteria (they have income limits)  FHA  does not have income limits amd your debt will not be counted against the debt ratios.

FHA and MassHousing will both lend on properties of less than $100,000

The BuyWorcesterNow ('buy cities")  program is a great way to buy in Worcester with reduced closing costs and great incentives!

Hope this info helps and get a good Loan Officer that knows these products!
  • August 29 2011
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Profile picture for shapiroamg

Lets start off with the FHA. If your husband is the only person on the loan then you have no issues. Your debt will not be included if only he is on the loan. You could be on title. If you go on the title then you will sign a coulple forms at the closing. This is ok in MA.

Not sure about MA Housing being a 100% program so I cant comment. We used to deal with MA Housing and its a good program if you qualify.

As for Buy Cities, Ive never heard of it, but I'm sure there are programs out there offered by various cities/towns that are used to pay for buyers closing costs or give soft second mortgages.

If you are not getting your basic questions answered by your Loan Officer, you might want to try a different LO.

Good Luck

  • August 27 2011
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