Eligibility

Borrowers

All owner-occupants of a 1-4 family homes and residential condominiums with failed sewage disposal systems whose income does not exceed Program Income Limits.  Borrowers must meet lenders’ internal credit guidelines.

Property Type

Single-family homes, 2-4 family homes, residential condominiums, and condominium associations.

Activities

All costs associated with sewage disposal system repairs or sewer connections.

Loan Terms

Amount

Minimum: $1,000
Maximum: $25,000

Terms

Amortizing: 3-20 years, based on size of loan.  Paid in full upon sale, refinance or transfer.

Interest Rate

Loans are full amortizing at interest rates of 0%, 3% and 5%, depending on household income.

Maximum Loan-to-Value

Loans are credit based, not equity based; maximum loan-to-value ratios are not applicable.

Points

“0” Points

Security

All loans are secured by a subordinate mortgage; nonassumable.

Insurance

Hazard insurance on each property, Flood insurance if applicable.

Debt-to-Income

The maximum debt-to-income ratio is 50% of the borrowers gross income.

Appraisal

No appraisal of the property is required.

Loan Application Process

Where to Apply

Borrowers apply for financing through MHFA-Approved lenders.

Required Forms

FHLMC #703 / FNMA#1012 plus other program-specific forms which will be provided by the participating lender.

Additional Documentation

Plans/specifications approved by local Board of Health as evidenced by a Disposal System Construction Permit; Sewage Disposal System Inspection form; contract with the firm price and Contractors Mass. Registration number; Certificate of Compliance by local Board of Health upon completion.