MassHousing Purchase and Rehab Loans
If you are a first-time homebuyer and looking to purchase a home in need of major repair, MassHousing’s Purchase and Rehabilitation loan might be just the program for you. Mortgages covering the purchase price of the home plus necessary rehabilitation costs are available through MassHousing-approved Rehabilitation Lenders.
Product Features:
- Available on one-to-four family properties.
- The Purchase and Rehabilitation option carries the same interest rate and point structure as a MassHousing Mortgage.
- Maximum loan amount may not exceed 97% of the lesser of the sales price plus rehabilitation cost or the estimated appraised value after rehabilitation.
- Minimum rehabilitation amount is $7,500 for all property types.
- Rehabilitation costs include the amount required to pay for the repairs, as well as other allowable expenses:
-
Inspection fees
Title update fees
Required contingency reserve equal to 10% of the total rehabilitation cost.
- The lender or Local Rehabilitation Agency (LRA) may charge a fee of up to $1,500 based on the cost of the rehabilitation.
- Borrowers may utilize the services of a MassHousing accepted LRA.
- Licensed contractors must complete all rehabilitation work.
- At the time of the loan closing, the borrower will be responsible for the full mortgage payment on the total principal amount.
Eligibility:
To qualify for a MassHousing Purchase and Rehab Loan, borrowers must
- Have a signed Purchase and Sales Agreement for a condominium, single family, 2, 3 or 4-family property
- Be creditworthy; learn more about credit and your credit report
- Have housing debt of less than 33% of your income and total monthly debt of less than 41% of your income
- Property must be your primary residence through the term of the loan