40B HousingProgram Requirements Part Two
40B Housing Program Requirements Part Two
Affordable housing covers a wide range of affordable housing possibilities including rentals and for sale property. Massachusetts General Law 40B (MGL 40B) is also known as the Anti-Snob Zoning Act.
40B encourages cities, towns, and contractors to construct affordable housing through a locally granted permit procedure to address the significant shortage of affordable housing across the state. For more information on 40B please visit our 40B affordable housing lottery overview page here.
Here are a few of the 40B program requirements.
To start off, the mortgage must be a fixed rate for at least 25 to 30 years.
No household members may be a co-signer on the mortgage and the buyer is solely responsible for all down payments and closing costs. There are many lending programs that offer a mortgage with a minimum down-payment between 3-5% of the purchase price.
And, at least 1.5% of the down-payment must be sourced from the buyer’s own funds. The balance of the down-payment can be the result of gifted funds or, from available closing cost assistance programs.
The buyer will also need to have funds available to cover all listed pre-paid line items and closing costs. There are also post-sale restrictions on the 40B property regarding resale and refinancing.
Affordable housing programs such as 40B were created to give Massachusetts residents an opportunity to purchase a home at a reduced price. This target audience of potential homeowners wouldn’t have qualified for a conventional home purchase.
There’s more to learn! Find out in our next installment and in the meantime, remember that Delphic Associates specializes in affordable housing. Contact us for more information today!
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