HOW DO I APPLY FOR THE SOFT SECOND LOAN PROGRAM (FIRST-TIME HOMEOWNERS) AND/OR DOWNPAYMENT ASSISTANCE?
Your first home just became more affordable .
A program offered by the City of Marlborough Community Development Department may be able to help you afford to buy your own home.
The program, called the Soft Second Loan Program, can help you qualify for a mortgage, and help with mortgage payments.
How does it work?
When you apply for a mortgage, the bank ordinarily qualifies you based on the total mortgage amount - all the money you need to borrow in order to buy your new home. This means your income has to be high enough so you can start paying off the entire mortgage the day you move in.
Mortgages through the Soft Second Loan Program are different. Instead of qualifying a buyer based on the total mortgage, participating banks break the mortgage into two pieces - a first mortgage, of up to 75 percent of the purchase price, and a second mortgage, which can be up to 20 percent of the purchase price. The remaining 5 percent is your down payment.
Funds available through the state Department of Housing and Community Development will be used to pay off a portion of that second mortgage for the first ten years.
This means the bank will qualify you on the basis of the first mortgage, and the reduced payments on the second. You can also avoid private mortgage insurance, and get favorable interest rates. This all means you may be closer to buying your first home than you thought!
Who is eligible?
This program is available to first-time homebuyers only, meaning you cannot have owned a home within the past three years.
The program is also limited to families who want to buy a home in Marlborough, although some other communities in Marlborough have similar programs available.
Your income must be below a level set by the federal government. In the Marlborough area, that limit is $66,150 annually from all sources for a family of four. There are different limits depending on your family size. Finally, you must have a decent credit rating, and you must be able to show the bank that you can make your mortgage payments on time.
Income Limits:
HOUSEHOLD SIZE MAXIMUM INCOME
1 $46,300
2 $52,950
3 $59,550
4 $66,150
5 $71,450
6 $76,750
7 $82,050
8 $87,350
What kind of house can we buy?
You can buy a single-family home, a two-family home or a three-family home. The price limits are shown below.
*Purchase price MAY be waived
How do we apply?
The first step is to contact the City of Marlborough Community Development Department. We're located on the third floor of City Hall, on Main Street, and the office open during regular business hours. Or call us at 508-460-3715.
We will ask you to provide some information about your household income. We will need copies of tax returns and other information, so that we can make sure that you meet the program's eligibility requirements.
While we are checking that information, you should contact a real estate broker and begin looking for your home. Or, you can start with the real estate broker, and come to us with a home in mind. You will need to supply us with a copy of a purchase-and-sale agreement or written offer to purchase before we can finish processing your application.
What next?
After you've been approved to participate in the program, we will send your application form to the three participating banks. They are:
l Citizens Bank in Hudson
l Marlborough Cooperative Bank
Bank of America
You can choose whichever of these banks you prefer. They will all know that you have met the basic income and homeownership eligibility requirements for the program. You must then meet the bank's requirements to qualify for a mortgage.
When can we start the process?
Start today! Applications are being accepted now. Funds are limited, so don't delay!
If you don't meet the qualifications for this program, each of the participating banks has other programs available which may help you to purchase your first new home. You may be closer than you think to being a new homeowner!
To get started you can download the Soft Second Loan Pre-Application application form by clicking HERE.
To download the Downpayment Assistance Application click HERE.
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