First ever program in Boston combines down payment and closing cost assistance with a record low interest rate mortgage
June 15, 2020 – Boston Mayor Martin J. Walsh today announced a new mortgage and down payment program, ONE+Boston, which gives income-qualified first-time Boston homebuyers greater ability to purchase a home in Boston by combining a discount on a low-interest rate mortgage product with down payment assistance. The ONE+Boston program is the City's first affordable mortgage program to be created specifically for low- and moderate-income first-time homebuyers, and the first to be developed in the Commonwealth in the last 30 years.
"Thousands of Boston families, including mine, have benefited from the ONE program, which was originally developed 30 years ago to address racial disparities in lending," said Symone Crawford, MAHA's Director of Homeownership Education. "Today, we are excited to build on that program and launch ONE+Boston with Mayor Walsh, MHP, and participating banks which will help Boston residents buy in Boston and will help us make progress in closing the racial homeownership gap. Some of the 1,000 plus residents who attended the MAHA event last summer with the Mayor will hopefully be among the first to buy a home with this new program."
The ONE+Boston program was designed to supplement one of the state's existing affordable mortgage programs (the ONE Mortgage) by providing qualified buyers, based on area median income, additional discounts on interest rates. With the new ONE+Boston program, qualified Boston residents who earn between 80% and 100% area median income will receive a half percent (0.5%) discount rate off the already low-interest rate offered through the ONE Mortgage product (currently about 3%). In addition, Boston residents who earn below 80% of area median income will receive up to one percent (1%) off of the current ONE Mortgage rate. Qualified buyers will also be eligible for downpayment and closing cost assistance through the Boston Home Center.
For example, a family of four making 100% of area median income of $119,000, could afford a $410,000 single-family house in Boston with a conventional loan. With the ONE+Boston program, the same family could afford a $539,000 single-family house in Boston.
"The ONE+Boston program is a great new resource that will help make the dream of owning a home a reality for more residents," said Mayor Walsh. "Creating pathways to homeownership means giving people the opportunity for equity and wealth building for themselves and their family. One of the most important ways to close the wealth gap is by providing the ability for wealth to be passed on from generation to generation, and homeownership is a key part of that."
The ONE+Boston Program is an enhancement of the ONE mortgage program and the City of Boston's first time homebuyer downpayment assistance program. The City of Boston, through the Boston Home Center, has provided downpayment assistance to over 700 homebuyers since 2014, 70 percent of whom are people of color. Administered by the Massachusetts Housing Partnership (MHP), the ONE Mortgage program is offered by lenders across Massachusetts to first-time buyers earning at or below 100 percent of area median income. Created in 1990, the ONE Mortgage program has financed over 5,800 loans in Boston, 57 percent of which were for people of color.
"Thanks to the City of Boston's commitment, ONE+Boston will expand our ability to help moderate-income households and people of color," said Elliot Schmiedl, MHP's homeownership director. "We've always had great support from the Baker-Polito Administration and we're thrilled to partner with Mayor Walsh and the Boston Home Center to help more people build wealth through homeownership in Boston."
Increasing homeownership opportunities, particularly for low- and moderate-income residents, people of color, immigrants and first-generation homebuyers, is one of Mayor Walsh's top housing priorities, as reflected in his Housing A Changing City: Boston 2030 Plan. This new program was developed by Mayor Walsh's Barriers to Homeownership Working Group, which is comprised of representatives from varying housing groups, including business, realtors, local lenders, and advocacy groups such as the Massachusetts Affordable Housing Alliance (MAHA) and the Greater Boston Interfaith Organization (GBIO).
Four lenders are offering the ONE+Boston product and were instrumental in the development of the program: Boston Private Bank, Cambridge Trust, Citizens, and Santander banks. Boston Private and Santander are currently offering the ONE+Mortgage product; Cambridge Trust will join on July 1st and Citizens later this summer. For homebuyers interested in the new program, please visit the Boston Home Center's page here or MHP's webpage here for more information.
The ONE+Boston program is made possible thanks to $7.8 million in Community Preservation funds supported by Mayor Walsh, City Councillors and the Community Preservation Committee. MAHA and GBIO were the original applicants for Community Preservation Act funds for this purpose back in the fall of 2018. In his proposed Fiscal Year 2021 budget, Mayor Walsh is recommending an additional $1 million to support the program so that more potential homebuyers will have the opportunity to take advantage of the program when buying a home.