ONE Mortgage Program

Massachusetts developed what was called the SoftSecond Loan Program in order to address a pattern of racial bias in mortgage lending. The program was transformed into the ONE mortgage program, which has a simpler structure, and it removes some of the obstacles faced by first-time homebuyers with less income. If you are interested in this program in connection with your purchase of a first home, the real estate attorneys at Pulgini & Norton can represent you throughout the process and offer sound legal advice. A Boston mortgage lawyer may be critical in protecting your interests.

The ONE mortgage program is similar to the SoftSecond program in terms of affordability and financial security. If you are a low income or moderate-income first-time buyer who has an income at or lower than the median income of the area and who meets other criteria, you are eligible for this program. The average household income of homebuyers who used the program in 2013 was $50,000. However, the household income limits vary depending on the community.

An applicant must also have less than $75,000 in household liquid assets, not including certain retirement accounts. "First-time homebuyer" is defined as not owning a home in the three years prior to applying for the program.

In addition to eligibility requirements, there are also requirements related to the real estate transaction itself. When buying a condominium, a single-family home, or a two-family piece of real estate, the total down payment must be equal to 3% of the purchase price. At least 1.5% of the down payment must be contributed from your own savings. The remaining amount can be a gift or some sort of assistance. When it is a three-family property, you must make a down payment of 5% of the purchase price with at least 3% from savings.

You must also meet the participating program lender's credit and underwriting requirements and agree to use the property you buy through the program as a primary residence through the loan term.

Two advantages of a ONE mortgage are the 30-year fixed interest rate and low down payment. Unlike private mortgages, you do not need to make certain insurance payments. Some homebuyers are also eligible for subsidized payment in the first seven years they own the house. The lender automatically applies the subsidy to mortgage payments.

In order to obtain a mortgage through the program, you will have to complete a homebuyer education class that has been approved before closing. If you are purchasing a multifamily property, you will need to participate in individual counseling with an approved agency as well. The purpose of the counseling is to make sure you understand the full costs of home ownership and know enough about the property. If you are buying a house in Boston, you will also need to have your income certified by the Massachusetts Affordable Housing Alliance.

Once you determine you want to obtain a mortgage through the program, you will need to pick a lender. The lender will request various documents, which must be submitted by certain deadlines. Once you have closed on the home, you must complete an approved post-purchase workshop within a year. The program wants to make sure all borrowers understand how to keep their property in good condition.

Buying a home is a huge investment for most people, and perhaps especially for those of lower income or moderate income. It is helpful for most people to have an attorney to navigate the process for them, including the process of obtaining a mortgage. An experienced Boston ONE mortgage program lawyer at Pulgini & Norton can offer sound legal advice on home mortgages and other real estate matters. Our property transactions attorneys also represent clients in Braintree, Somerville, Quincy, and other cities in Massachusetts. Call us at 781-843-2200 or contact us via our online form for a free consultation.