MHP/SoftSecond | First Time Home Buyer

Buying a home for the first time? At Mortgage Home Loan USA we help the first time home buyer obtain the lowest interest rate.

Homeownership

Homebuyers can get a fix on their future, while banks and homeownership developers can serve their customers best with SoftSecond, the state's most successful mortgage program for low and moderate-income first-time homebuyers. Since 1990, SoftSecond has helped nearly 10,000 first-time homebuyers purchase their first home.

Why SoftSecond

Get a fix on your future! Buy more house and save thousands with the SoftSecond Loan Program, a low-interest rate, low down payment mortgage for first-time homebuyers. Unlike other mortgage products that offer variable rates, SoftSecond offers a fixed rate that will save you thousands over the life of your loan.

SoftSecond is now available in every community in Massachusetts. More than 35 lenders throughout the state offer SoftSecond through a partnership with the Department of Housing and Community Development and MHP. SoftSecond Loan has been hailed as one of Massachusetts's most affordable mortgage programs for low- to moderate-income homebuyers.

Key features of a SoftSecond Mortgage:

Low fixed interest rates

Participating lenders offer SoftSecond rates that are fixed for 30-years and range from 1/4 to as much as 1/2 percent below market rate.

Low down payment

The minimum down payment for a SoftSecond loan is 3 percent of the purchase price; some of which can even be a gift or grant.

No PMI

Borrowers who qualify for a SoftSecond loan are not required to pay Private Mortgage Insurance - a savings of approximately $125 to $250 per month.

No points

"Points" are fees banks ask buyers to pay when they buy a home. One point equals 1 percent of the loan. Banks do not charge points for SoftSecond loans. Not paying points will save buyers $3000-$7000.

Subsidy available for qualified borrowers

Some SoftSecond buyers qualify for a zero percent interest subsidy payment from MHP. The subsidy payment may cover up to 75 percent of the interest-only payment on the second mortgage.

Homebuyer support

Pre and post-purchase educational courses are designed to help homebuyers purchase their home and keep up with payments.

Proven track record

Since 1991, SoftSecond has helped nearly 10,000 families buy their first home, with a state-low delinquency rate of 1.9 percent and a microscopic foreclosure rate of .35 percent.

How SoftSecond Works

SoftSecond works by splitting a conventional home mortgage in two. Buyers are qualified based on the first mortgage, which is typically 77 percent of the purchase price; the second mortgage which is always 20 percent of the purchase price, and a down payment of at least three percent. And, unlike a conventional mortgage, private mortgage insurance is not required.

The following graphic illustrates how SoftSecond works:

Sample SoftSecond mortgage payment schedule

Step by Step SoftSecond

To qualify for a SoftSecond you must:

Be a first-time homebuyer. This means you have not owned home in the three years prior to applying for the SoftSecond™ Loan Program. If you have owned a home with a former spouse, are a single parent, or owned a home without a foundation you may also qualify for the program.
Have completed a first-time homeownership education workshop.
Meet SoftSecond's income guidelines in the community you are looking to purchase in. Click here to find your community's median income limit.
Have less than $75,000 in total household liquid assets (excluding retirement accounts such as 401K, 403b, 457 and IRA accounts).
Agree to use the property you purchase through the SoftSecond™ Loan Program as your primary residence throughout the term of your loan.

SoftSecond FAQs

How can this program help me buy a home?

Before purchasing a home, you must qualify through a participating bank. Banks evaluate a variety of factors in qualifying prospective borrowers, including credit history, mortgage amount, amount of monthly payments, and income. The bank usually requires your housing ratio which is the percentage of your monthly income used to pay your mortgage payments, taxes and insurance to be less than 33 percent. The two-mortgage structure, the interest subsidy and the lower interest rates through SoftSecond help bring down monthly costs and lower the borrower's ratio.

How are the 1st and 2nd mortgage amounts and the subsidy determined?

The first and second mortgage amounts are based on what you can afford. The first mortgage can be up to 77 percent of the property value. The second mortgage is always 20 percent of the purchase price of the property (or, if you are purchasing a home that costs less than $100,000, the second mortgage will be set at $20,000). If you choose to put more than three percent down, that percentage will be subtracted from your first mortgage amount. You are expected to contribute approximately 28-33 percent of your monthly income to carry the first and second mortgages and other housing expenses. The amount of subsidy you receive is the difference between the amount you are able to contribute to the second mortgage and the payment's full monthly amount.

What happens if I want to sell or refinance?

All subsidy awarded by MHP is secured by a mortgage. If you receive subsidy and later decide to sell your home, you are responsible for repaying the subsidy according to the SoftSecond Program Guidelines. If you sell within five years of purchase, you must repay the full amount of the subsidy applied to the interest payments on the second mortgage. If you remain in your home for five years or longer, the repayment is equal to the lesser of the amount of the subsidy used or 20 percent of the net appreciation gained at the time of sale. However, in no event shall this amount, when combined with your other secured debt, exceed 97 percent of the property's value