The Commonwealth of Massachusetts
Executive Department
State House Boston, MA 02133
(617) 725-4000
MITT ROMNEY
GOVERNOR
KERRY HEALEY
LIEUTENANT GOVERNOR
FOR IMMEDIATE RELEASE:
January 31, 2003 CONTACT:
Shawn Feddeman
Jodi Charles
(617) 727-2759
Eric Gedstad
617-854-1079
ROMNEY UNVEILS NO-DOWNPAYMENT LOAN OPTION
Users of public transportation benefit from ‘Take the PVTA Home’ Program
WEST SPRINGFIELD - Highlighting his goal of better coordination between the state's housing, transportation and environmental agencies, Governor Mitt Romney today launched a new no-downpayment home mortgage loan program to make it easier for Pioneer Valley Transit Authority (PVTA) riders to realize the American Dream of homeownership.
“Homeownership is the true American Dream,” Romney said. “All individuals and families have the right to expect a reasonable standard of living. With programs such as Take the PVTA Home they will meet their personal goals on many levels.”
The Take the PVTA Home program, administered by MassHousing, is designed to encourage people to buy homes near mass transit and leave their cars at home. It builds on a program that was launched last year with 20 eastern Massachusetts banks and the Massachusetts Bay Transportation Authority (MBTA). The Boston-area program has already provided more than $4 million to help regular “T” riders purchase homes.
“When we learned of the transit-oriented mortgage idea, we thought immediately that it could work in the Pioneer Valley,” said United Cooperative Bank President Richard Collins, who hosted Romney for the announcement. “Given the need many families have for affordable housing, and the sheer number of passengers served by the PVTA, there was no question this was something we wanted to do.”
United Cooperative Bank is currently offering the “Take the PVTA Home” mortgage with a 30-year fixed interest rate of 5.75 percent.
Banks like United Cooperative are willing to make the no-downpayment loans because MassHousing insures them. As an added incentive, lenders receive enhanced Community Reinvestment Act (CRA) credit for the loans for partnering with MassHousing.
In order to apply for loans under the new program, potential homebuyers will have to demonstrate that they are:
Frequent users of the PVTA, either by showing 10 months of passes, a mass transit auto insurance discount, or verification from their employer that they get a transit pass at work.
Once they have established that they are regular PVTA riders, buyers will undergo a traditional mortgage application process. Borrower's household incomes cannot exceed 135 percent of area median income, which in Springfield is $68,445, and they must have good credit. Also, housing expenses cannot account for more than 38 percent of a borrower's gross monthly income.
That percentage is more generous than most lenders will allow, according to MassHousing Executive Director Tom Gleason, “When we designed the program, we took into account that people who take mass transit have fewer car-related expenses, and have more money to spend on a mortgage.”
Officials from the PVTA, the state's second-largest regional transit authority serving 24 communities, are enthusiastic about the program.
“We encourage the use of public transportation because it is affordable and accessible and benefits public safety, the environment and our neighborhoods,” said PVTA Executive Director Gary A. Shepard
While United Cooperative Bank is currently the only Springfield area lender making the loans, others could eventually sign on, according to MassHousing. Several other states have experimented with similar “location efficient” mortgage programs, but Massachusetts is the first state to offer the no-downpayment option.
Borrowers looking for more information can contact United Cooperative Bank via phone 413-787-1247 and Internet www.bankatunited.com or MassHousing at 1-877-309-HOME or www.masshousing.com.
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