On hand for the HomeChoice mortgage announcement last week are: (from left) Mark Formica, vice chairman of retail delivery and citizens services, Citizens Financial Group; Richard Maurano, director of government and industry for Fannie Mae; U.S. Rep. Barney Frank; and Jack Wilson, senior deputy director of Fannie Mae’s Massachusetts Partnership Office.
With recent reports identifying Massachusetts as the least affordable state for housing, Citizens Bank and Fannie Mae have found a way to make buying a home affordable and manageable for people living with disabilities.
On the fifth anniversary of Citizens’ Housing and Planning Association’s Home of Your Own Program, Citizen’s and Fannie Mae, the nation’s largest source of financing for home mortgages, announced the availability of HomeChoice mortgage in Massachusetts, a product created to provide affordable homeownership opportunities for low- and moderate-income borrowers who have disabilities, or individuals who have family members with disabilities living with them.
Citizens’ Housing and Planning Association is the nonprofit umbrella organization for affordable housing and community development activities throughout Massachusetts. The agency uses its contacts with local, state and federal officials to encourage housing preservation and production through new programs, incentives and regulations, while making adequate housing resources available for low-income people.
“Becoming a homeowner is a challenge for most individuals, but HomeChoice mortgage truly makes a difference for individuals with disabilities and their families,” said Jack Wilson, senior deputy director of Fannie Mae’s Massachusetts Partnership Office. “The HomeChoice mortgage is part of Fannie Mae’s commitment to provide affordable housing opportunities to all individuals who are ready to become homeowners.”
Representatives from CHAPA, Citizens Bank of Massachusetts and Fannie Mae announced the availability of the HomeChoice mortgage program last week with the support of U.S. Rep. Barney Frank, who attended the event.
“There is a national demand for housing,” said Frank, who is the senior Democrat serving the Housing Programs in the Committee on Financial services. “I welcome this initiative as another step in our effort to make homeownership opportunities as broadly available as possible.”
The Home of Your Own Program was established in 1997 as part of a nationwide effort to increase individual control for housing and homeownership opportunities for people with disabilities.
Since its establishment, HYOP has provided 47 first-time homebuyers with disabilities with assistance in their down payment or closing costs for purchasing a home.
The HomeChoice initiative addresses the homebuying needs of individuals with disabilities by allowing more flexible use of second mortgage financing for down payment and closing cost assistance, rehabilitation and access modifications and special qualifying and underwriting guidelines for borrowers with nontraditional credit histories. Citizens oversees the mortgage and the loans and, according to Stephen Adamo, president and chief operating officer of Citizens Bank Mortgage in Rhode Island, the “success of the program is driven by local community groups helping to locate affordable housing and provide seminars on buying a new home.”
Fannie Mae and Citizens Bank of Massachusetts are each providing CHAPA with a grant to assist in their mission of homebuyer education, and Citizens Bank of Massachusetts will originate the mortgages.
This past spring, Citizens Bank introduced a rental assistance program for low- to moderate-income borrowers known as Section 8. The program provides appropriate counseling and screening with the mortgage payment, and Adamo said because the HomeChoice program can be layered on top of the Section 8 program that will “dramatically change the availability of the housing options around the state.”
“We’re expanding … so people can afford more of a purchase price,” said Adamo. “We also provide a non-occupant co-borrowing on this loan so that if there is a person co-signing on the loan, their income will be used in calculation for a loan, but it doesn’t knock [the homebuyer] out of their demographics.”
Since HYOP kicked off in 1997, 47 homebuyers purchased residences ranging from condominiums and single-family homes in 32 cities around the state, expanding around Greater Boston, Metro West, Northern Massachusetts and a majority of buyers in Southern Massachusetts and Cape Cod.
Adamo agreed that although the South Shore is certainly more affordable than the city, “this is a Massachusetts loan program so we’ll see people on the periphery of the city.”
“We have been able to help many families with disabilities move into a home of their own and, thanks to the flexibility and nontraditional underwriting criteria of the HomeChoice mortgage, we can help even more,” said Aaron Gornstein, executive director of CHAPA.
“Citizens Bank is proud to provide financial support to individuals with disabilities as they work to find affordable and adequate housing in Massachusetts,” said Mark Formica, vice chairman of retail delivery and Citizens services, Citizens Financial Group. “We are pleased to serve as the lead lender for the HomeChoice mortgage to help strengthen special needs populations through the power of homeownership.”
The availability of the HomeChoice mortgage is part of Fannie Mae’s $2 trillion American Dream Commitment to increase homeownership nationwide among minorities, immigrants, people with disabilities and others whose homeownership rates lag the general population.
“Citizens is very involved in the community and customer,” said Adamo. “This product helps communities and allows people with disabilities to be homeowners and works well with allowing people to have the American dream.”
