First time home buyer - Mass Housing or FHA ? Boston

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First time home buyer - Mass Housing or FHA ? Boston

Aaron Gilmer
Rental Property Investor · Boston, MA · Member since 2019 · 8 posts · 1 vote

Hi Bigger Pockets Community,

I am currently looking to purchase my first multi family home around the greater Boston area where I am looking to owner occupy. Through talking to different real estate agents I’ve heard about both mass housing and fha loan programs.

The mass housing loan program also has a downpayment assistance program, that will pay for a good portion of the downpayment. I have been told that this loan typically has a little bit higher of an interest rate than fha, but no PMI.

The part that was attractive to me about this loan is that you can still do an fha purchase down the road and secure another property with a loan downpayment. What would you all recommend as a loan option between the two for someone who is looking to get into real estate investing for their first purchase?

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  • David BarnettPro Member
    Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
    6y

    @Aaron Gilmer This is a great question, and was wondering if you were looking at the Soft Second program with Mass Housing or a different program? If you are looking at the Soft Second program and qualify for the 80% area median income subsidy, I would highly recommend it. I was able to utilize this program (not as a house hack) to get into my primary residence. The only thing is you have to live in the property or refinance out of the loan. My understanding is that the loan product is not as flexible as the FHA loan. Good luck!

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  • Aaron Gilmer
    OP
    Rental Property Investor · Boston, MA · Member since 2019 · 8 posts · 1 vote
    6y

    @David Barnett thanks Dave. I looked into that program previously, but I don’t meet the income limitations. Appreciate the advise!

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  • David BarnettPro Member
    Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
    6y

    @Aaron Gilmer Ah, makes sense.  I'll defer to the collective knowledge of the community on which is a better fit.  Good luck!

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  • Lior Rozhansky
    Real Estate Agent · Boston, MA · Member since 2016 · 106 posts · 69 votes
    6y

    @Aaron Gilmer I would look to try and pull off Mass Housing on your first one. You alluded to it in your post, but this way you open yourself up to utilizing FHA to go get your second property. Many ppl will use FHA up-front and then be "stuck" once they close as they dont have a clear path for the next property. That being said, once you get your first property under contract, you can ask your lender to evaluate the different scenarios and make sure that's still a good deal for you.

    Hope that helps!

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  • Aaron Gilmer
    OP
    Rental Property Investor · Boston, MA · Member since 2019 · 8 posts · 1 vote
    6y

    @Lior Rozhansky thanks for the insight! That’s exactly what I was thinking.

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  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    I think you do have to compare the rates, closing costs, and ultimate mortgage figures in the end calculations. Mass Housing I believe has an income limit so you'll have to verify if you even qualify for it. Big plus of the no PMI and no self sufficiency test with higher rates and income limit. FHA has best rates with PMI but 3.5% down payment.

    I would strongly advise you to tread lightly on the down payment assistance program - FHA or Mass Housing. While you can definitely participate in those programs, it is even more vital for you to gauge your finances and not overextend yourself in these purchases. This is how a domino effect could really happen. Vacancies do happen, repairs are needed, and cap ex will for sure be there.

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