At the July 2 launch of A Home for the Brave program are: (from left) East Boston Savings’ Philip F. Freehan, Richard J. Gavegnano and John S. Tirrusa.
Just in time for the Fourth of July, a group of nearly 50 Massachusetts lenders have announced a new loan product aimed at veterans.
Collectively, 42 banks and credit unions across the state are contributing more than $200 million in financing toward the program, A Home for the Brave.
Through the MassHousing-organized effort, they will offer discounted 30-year fixed-rate mortgages or adjustable mortgages with initial 10-year fixed rates to U.S. veterans.
Announcing the new loan product at the State House last Wednesday, Gov. Deval Patrick said Massachusetts is home to 400,000 veterans. By MassHousing’s estimate, up to 70,000 of them are in their prime home-buying years.
“Responding to their needs, such as housing and health care, is the least we can do,” Patrick said.
Helping veterans “is not only the right thing to do, but also turns out to be pretty smart economically,” he added, noting that veterans bring millions of dollars worth of specialized training to the state’s economy.
A Home for the Brave loans will be offered at up to 100 percent financing and include MassHousing’s branded mortgage insurance product, MI-Plus.
MI-Plus makes mortgage payments for up to six months if a borrower loses his or her job or is re-deployed.
MassHousing Executive Director Thomas R. Gleason said he expects it will be particularly attractive to borrowers today, since it is available for 100 percent financed homes.
Private mortgage insurance companies are not insuring loans of that size these days, he said.
A Home for the Brave recipient must earn no more than 135 percent of the area median income. There is no maximum loan amount. The minimum borrower credit score is 620, for a 95 percent loan-to-value loan. Government loan insurer Fannie Mae is also contributing $300,000 to assist with closing costs for the first 200 veterans who purchase homes with the product.
Heroes in Homes
First Citizens Federal Credit Union Executive Vice President and Chief Operating Officer Peter J. Muise, whose Fairhaven-based institution is a lender participant in the program, said that in adding A Home for the Brave mortgage loans, First Citizens now has another offering specifically for veterans.
“This is a natural extension for us,” he said.
Since November, First Citizens Federal Credit Union has offered the Hero Account, an advantageously-priced, fee-free deposit account aimed at current and former U.S. service members.
More than 470 Hero Accounts have been opened since they became available, and more than $23,000 contributed to local veterans’ organizations as a result.
First Citizens contributes $50 to a veterans’ charity selected by the account-holder for every new account.
East Boston Savings Bank, another Home for the Brave participant, announced late last week that it contributed $5 million toward the $200 million banks and credit unions have put up in total.
“We’re a community bank, and doing business with veterans is good business,” said the bank’s bard chairman, Richard J. Gavegnano. East Boston Savings’ market lending area has a number of qualified, potential participants, he added.
In the past, MassHousing has offered specialty loan programs aimed at other specialized groups, teachers and municipal workers, among others.
But Gleason said A Home for the Brave is especially comprehensive with the added benefit of MI-Plus, a product the agency introduced just three years ago.
