(Boston, MA) Luis Arias of Boston changed his life and his financial future with the stroke of a pen today thanks to an unparalleled program from NACA and the City of Boston.
NACA (Neighborhood Assistance Corporation of America), the nation’s largest homeownership and community advocacy organization, has partnered with the City of Boston Department of Neighborhood Development (DND) to create a major step forward in eliminating the shortage of affordable housing in Boston. The results are creating a new standard for cities nationwide.
The partnership will allow Boston homebuyers to receive a grant of up to $20,000 from the City of Boston Financial Assistance Program (FAP) funds to buy down their interest rate permanently for the life of the loan, creating a significant impact by either reducing the overall mortgage payment to a more affordable figure or increasing the maximum affordable loan amount for homebuyers.
“The goal of this partnership is to make homeownership more affordable by providing first-time homebuyers with unprecedented financial assistance for interest rate buy-down, and NACA has dedicated up to $50 million for mortgages in this program”, according to Bruce Marks, Founder and CEO of NACA.
With a 30-year fixed rate NACA mortgage, each one percent for the mortgage amount (or one “point”) permanently reduces the interest rate by 0.25%, potentially to virtually zero, and with a 15-year fixed rate mortgage through NACA, each one percent reduces the interest rate by 0.50%. Also, there is no down payment, no closing costs and no PMI (Personal Mortgage Insurance) with the NACA program.
For 28-year-old Luis Arias, the program not only created an opportunity to become a homeowner, but created personal financial security by purchasing a $781,000, three-family property, changing his living status from renter to homeowner and landlord.
Arias received a $20,000 grant from the NACA/DND program. The NACA program already starts with below-market interest rates, and Arias bought down his interest rate from 3.375% to 2.688%. This will save him more than $104,000 in interest over the 30-year term of the loan. Arias must live in the property as long as he has the NACA loan and may not sell for at least ten years under the terms of the grant. However, income from renting out the other two units will all but guarantee that his new home will literally pay for itself as well as supplement his income from his job at a local cleaning company.