Prosperous families. Stable and secure neighborhoods. Sound, private-sector loans that get repaid. That’s what the ONE Mortgage program delivers.
ONE Mortgage is offered by participating Massachusetts banks and credit unions. Along with its predecessor, the SoftSecond Loan Program, it has helped more than 21,000 low- and moderate-income families buy their first home.
The program was developed in 1990 by the Massachusetts Housing Partnership in collaboration with the Massachusetts Bankers Association, the Massachusetts Affordable Housing Alliance, the City of Boston and the Commonwealth in response to a Federal Reserve Bank study that found widespread racial discrimination in mortgage lending in Boston.
The program is successful because it breaks down barriers that used to prevent creditworthy families from buying a home: inadequate consumer education, high interest rates and fees, excessive down payment requirements, compulsory mortgage insurance, and a bias against 2- and 3-family properties. Those are barriers that affected everyone trying to buy a home in Massachusetts, especially minority families and those living in historically underserved neighborhoods
The key features of the ONE Mortgage program include:
- 30-year, fixed-rate mortgages that are originated and held in portfolio by a Massachusetts bank or credit union
- Three percent minimum down payment (five percent for three-family properties)
- 0.3 percent (30 basis point) interest rate discount provided by the lender for the life of the loan
- Reduced monthly payments for qualified borrowers during the early years of homeownership through a state-funded interest rate buy-down
- No limit on home appreciation, with a portion of any net gains recaptured to repay the interest rate buy-down (if any) when borrowers sell or refinance out of the program
- No cost for private mortgage insurance because participating lenders retain credit risk and the program includes a cash-funded loan loss reserve
- Hundreds of dollars a month in combined savings compared to conventional home mortgage products