Soft Second Loan Program
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.
What is the Soft Second Loan Program?
Am I eligible?
What are the income limits?
What are the asset limits?
What are the benefits?
How do I apply?
Useful links
NOTE: Glossary words are highlighted. Click on any glossary word to see its definition.
What is the Soft Second Loan Program?
The Soft Second Loan Program is a special home loan program for low and moderate-income families in Massachusetts, developed by the Massachusetts Bankers Association, the State Department of Housing and Community Development (DHCD) and the Massachusetts Housing Partnership (MHP).
Soft Second loans are available throughout Massachusetts.
Am I eligible?
- You must be a first-time homebuyer or qualify for an exception.
- You must complete an approved pre-purchase homebuyer education course.
- You must complete a post-purchase HomeSafe course within 1 year of closing.
- Your income must be within the Soft Second income limits.
- Your assets must be within the Soft Second asset limits.
- You must live in the home as your primary residence for the term of the loan.
- You must pay a minimum down payment of 3% of the purchase price (half can be a gift or grant).
- You must buy a condominium, single-family, two-family, or three-family home.
What are the income limits?
Your total household income must be no greater than 100% of the area median income in your community for your household size. Homebuyers with household incomes less than 80% of the area median income are eligible for interest subsidies.
Soft Second income limits, by household size, for Boston, Worcester, and Springfield, are shown in the table below:
| 2010 Soft Second Income Limits Gross Annual Household Income Effective June 2010 |
|||||||
| Household Size | Boston | Worcester | Springfield | ||||
| 80% AMI | 100% AMI | 80% AMI | 100% AMI | 80% AMI | 100% AMI | ||
| 1 | $51,550 | $64,260 | $44,750 | $55,930 | $43,800 | $47,180 | |
| 2 | $51,550 | $73,440 | $51,150 | $63,920 | $50,050 | $53,920 | |
| 3 | $58,000 | $82,620 | $57,550 | $71,910 | $56,300 | $60,660 | |
| 4 | $64,400 | $91,800 | $63,900 | $79,900 | $62,550 | $67,400 | |
| 5 | $69,600 | $99,144 | $69,050 | $86,292 | $67,600 | $72,792 | |
| 6 | $74,750 | $106,488 | $74,150 | $92,684 | $72,600 | $78,184 | |
| 7 | $79,900 | $113,832 | $79,250 | $99,076 | $77,600 | $83,576 | |
| 8 | $85,050 | $121,176 | $84,350 | $105,468 | $82,600 | $88,968 | |
For income limits in other Massachusetts communities, see the SoftSecond Income Limits on the Massachusetts Housing Partnership (MHP) web site (PDF).
For more information, call the MHP at 617-330-9955 (Boston), 413-253-7379 (Amherst), or toll-free at 1-877-MHP-FUND.
What are the asset limits?
Your total household assets cannot be greater than $75,000. Assets include: savings and checking accounts, stocks and bonds, other capital investments, and real property. Retirement accounts and college savings plans are not counted.
The money to be used for the down payment and reserves is included in countable assets.
What are the benefits?
The Soft Second Loan Program helps families qualify for mortgage loans by splitting the loan amount into two parts:
- A regular first mortgage at market interest rates for up to 77% of the purchase price. The homebuyer must pay the principal and interest on this mortgage.
- A second subsidized mortgage for 20% of the purchase price (or $20,000, whichever is greater). This mortgage is interest-only for the first ten years.
For qualifying homebuyers, interest payments are subsidized with public funds. The amount of the subsidy depends on household income and housing expenses. The subsidy is gradually decreased each year, and the homebuyer pays full interest in the 10th year.
After ten years, the homebuyer must pay the principal and interest on this mortgage.
The remaining 3% is the down payment. Half of the 3% down payment can be a gift or grant.
Other Soft Second benefits are:
- The buyer does not have to purchase private mortgage insurance.
- The homebuyer does not have to pay “points.” Points are fees that banks usually charge homebuyers when they give them a loan. Most homebuyers pay several thousands of dollars in points.
With a low down payment, a subsidized second mortgage, and no required mortgage insurance or points, many low and moderate-income families qualify for Soft Second loans.
How do I apply?
To apply for a Soft Second loan, you should contact a participating bank in your community. Participating banks are listed on the MHP‘s web site:
To find out more about the Soft Second program, you should call the Massachusetts Housing Partnership at 617-330-9955 (Boston), 413-253-7379 (Amherst), or toll-free at 1-800-752-7131.
Useful links
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- Homebuyer: Soft Second Loan Program
Eligibility, benefits, and contact information for the Soft Second Loan Program, including SoftSecond Program Guidelines, from the Massachusetts Housing Partnership (MHP).
