Let’s face it – low inventory of homes in MA and RI, coupled with high home prices and mortgage interest rates have made homebuying a challenge for many. The good news is that there are ways to help increase your chance of qualifying for a mortgage in Massachusetts or Rhode Island. Across Southern New England, there are several local programs aimed at making home ownership more attainable. If you are considering buying a home in this competitive market, here are some of the most valuable mortgage programs to consider.
Massachusetts and Rhode Island Programs
Housing Our Workforce (HOW)
The HOW Program is available to homebuyers in New England, including MA and RI. The Housing Our Workforce (HOW) program is an excellent tool for obtaining a grant to cover some of the costs associated with purchasing a home. These grants help those who are earning over 80% and up to 120% of the median income for the area, with both down payment and closing cost assistance. Here’s what you need to know:
- Eligible homebuyers can receive up to $25,000 in grants to use for closing costs or down payment costs.
- You have to earn at least 80% of the local median wage, and your income cannot exceed 120% of the local median wage.
- Aims to support workers who are essential to the long-term economic vitality of the community, encouraging people to buy locally.
- You’ll need to make a minimum down payment that is at least 3% of the home’s purchase price.
- You’ll need to attend a homebuyer counseling program.
Equity Builder Program
A second option for those in MA and RI is the Equity Builder program. This is also a grant, which means you do not have to pay back the funds as long as you remain in the home for five years. Details of the program include:
- Provides first-time homebuyers with up to $29,000 in grant funding.
- Available to those who have an income at or below 80% of the HUD median income for the region where they are buying the home.
- Buyer must make a down payment of at least $500.
- In order to qualify, must attend a homebuyer education program.
BankFive’s Rate Switcher Mortgage
Many potential homebuyers are concerned with how high mortgage rates currently are, and are patiently waiting for rates to go back down. If the current rate landscape is making you hesitant to lock in a long-term mortgage, you might consider BankFive’s Rate Switcher mortgage offer. This unique offering allows borrowers to get a home loan now with an opportunity to refinance (without a lender refinance fee) when rates start to fall. Eligible borrowers must:
- Close their home loan with BankFive
- Make at least 7 on-time monthly loan payments
- Apply for a refinance with BankFive by 12/31/24
Conditions and restrictions apply, and more information can be found at www.bankfive.com/rateswitcher.
Lift Up Homeownership Program
The Lift Up Homeownership program is offered through the Federal Home Loan Bank of Boston and is designed to provide financial assistance to minority first-time homebuyers, including Black, American Indian, Alaska Native, Hispanic, Asian, Native Hawaiian/Pacific Islander borrowers. The program provides up to $50,000 in down payment and closing cost assistance.
Qualifying minority borrowers must:
- Be purchasing their first home
- Earn no more than 120% of the area median income
- Complete a homebuyer counseling program
BankFive has been approved to participate in the Lift Up Homeownership program and interested borrowers can learn more by contacting us.
Programs for First-Time Buyers in MA
Although MassDREAMS funds are no longer available through Mass Housing (where they once were readily accessed), you may still qualify for the program through BankFive’s partnership with the Massachusetts Housing Partnership (MHP). The MassDREAMS program, which stands for “Delivering Real Equity and Mortgage Stability”, is a federally funded grant program. This program is aimed specifically at first-time homebuyers who are buying a home in Fall River, New Bedford, Attleboro, Barnstable, Brockton, Taunton, or one of 23 other eligible Massachusetts communities. Here are some specifics to keep in mind:
- Eligible first-time homebuyers can receive assistance equal to 5% of the home’s purchase price and applicable closing cost assistance based on their needs.
- To qualify, you must earn less than 100% of the median income for the area.
- The maximum eligible assistance is $50,000.
- You can pair this particular assistance program with other available programs, potentially extending your opportunities.
ONE Mortgage Program MA
Another potential opportunity is the ONE Mortgage Program, which BankFive offers in partnership with the Massachusetts Housing Partnership (MHP). This program aims to support first-time homebuyers with the financial support they need to overcome some of the most common obstacles that get in the way of buying a first home, such as high interest rates and large down payments. Here are some details on the program:
Programs for First-Time Buyers in RI
Rhode Island DPA Grant
The RI Statewide Down Payment Assistance (DPA) Grant program provides first-time homebuyers in Rhode Island with $17,500 in grant funds that they do not have to repay. Eligible homebuyers can use the funds to help cover the cost of their down payment and closing costs. RIHousing income limits apply, and there are additional eligibility requirements as well:
- Must be a first-time homebuyer purchasing a 1 to 4 family home or condo, and must live in the home as a primary residence.
- Must have a credit score of at least 660.
- Must complete a homebuyer education course.
- Must obtain a RIHousing-funded first mortgage through a participating lender, like BankFive.
FirstGenHomeRI is an opportunity for first-generation homebuyers to receive a grant to help cover the down payment and closing costs associated with buying a home in Rhode Island. A first-generation homebuyer is defined as a homebuyer whose parents or guardians did not own a home during their lifetime or lost their home to foreclosure or short sale. The funds for this program are limited and available on a first come, first serve basis. To be eligible, borrowers must:
- Currently reside in Central Falls, East Providence, Pawtucket, Woonsocket, Providence or Newport and plan to purchase a 1 to 4 family home or condo in RI that they will live in as a primary residence.
- Have a credit score of at least 660.
- Meet all RIHousing price and income limits.
- Meet the HUD-approved first-time homebuyer education course requirements.
- Obtain a loan through a RIHousing-approved lender, like BankFive.
At BankFive, we know how difficult it is to buy a home in the current housing market. We also know how overwhelming it can be trying to determine which local mortgage program might be the right fit. So, if you are looking to purchase a home in Massachusetts or Rhode Island, let us guide you through the process. Our dedicated team of local mortgage experts are standing by to help you navigate the programs and options available to you. Contact us to schedule a free consultation or start a conversation today.