Affordable Home Ownership in Groton

Affordable Homeownership in Groton

When Affordable Homeownership units are offered for sale in Groton, information will be listed here.  Units offered may be either new construction or resale of an existing home.

Deed Restriction

An affordable unit will be accompanied by a deed restriction that imposes certain limits to assure affordability of the unit over time.  Affordable homeowners can grow equity (by paying down the mortgage).  However, the deed restriction sets a maximum resale price when the owner decides to sell, which has the effect of reducing appreciation of the home.  In this way, affordable homeowners will likely realize less appreciation of the value of their homes upon resale than owners of unrestricted market rate homes.  There are other deed restrictions; however, this regulation of the resale price is a main element of affordable homeownership.

Allowable Income

MGL Chapter 40B aims to promote affordable housing for households earning 80% or less than the area median income.  Usually, a household will have to have a moderate level of income – close to 80% area median income — to afford to purchase affordable homeownership units. Once the unit is purchased, there is no further income test and the household is free to earn any amount of income.

Tip:  If your income is well under 80% of the area median income, and you would like buy a home, please consider applying to buy a Habitat for Humanity home.  As a nonprofit, Habitat for Humanity [with donations, buyer sweat equity, low purchase prices, and self-financing] manages to sell to households with incomes as low as 50% of the area median income. Here is a brochure with more information about purchasing through Habitat for Humanity.

Asset Limits

There are also asset limits which vary depending on the type of home offered.  Most affordable buyers are not hampered by asset limits.  Individual situations are mixed though it is well-known that moderate income households often struggle to accumulate sufficient savings to purchase a market rate home.

Financing

Buyers of affordable units must obtain their own home loan to purchase a unit.  There are partially subsidized home loans (that is mortgages) offered to first time homebuyers through the Commonwealth of Massachusetts.  Most lenders and homeownership programs expect buyers to make a downpayment.  The Commonwealth also offers downpayment assistance (up to $50,000).

Tip:  There is a federal law called the Community Reinvestment Act (CRA) that encourages banks to help meet the credit needs of the communities in which they do business.  Banks will sometimes offer their own financing, which can provide competitive alternatives to the state assisted loan programs.

Tip:  The Commonwealth’s home loans require that buyers complete a first-time homebuyer’s course. These online courses are offered across the state.  Merrimack Valley Housing Partnership (Lowell) and Nu Vue Communities (Fitchburg) are near Groton and have advised homebuyers in our area.  Taking a first-time homebuyer course can be a good way to learn about the homebuying process.  Homebuying is a major decision and informed consumers can better evaluate loan options.

Many of these loans and downpayment assistance options can be used to purchase either an affordable or a market rate home.  If you have questions, please contact the Housing Coordinator 978-732-1913 or fstanley@grotonma.gov .