Mayor Michelle Wu highlighted her proposal to invest $106 million to expand opportunities for homeownership for Boston residents, including $60 million through American Rescue Plan Act (ARPA) funds and $46 million in City funds over three years. This proposal builds on Mayor Wu’s commitment to prioritize federal funds to address Boston’s housing crisis and boosts the City’s efforts to close the racial wealth gap by expanding affordable homeownership opportunities for BIPOC households and first-generation homebuyers.
“Homeownership is crucial to building generational wealth and long term stability for families,” said Mayor Michelle Wu. “We have an opportunity to transform what homeownership looks like in Boston. These investments will support existing programs for first time homebuyers, build generational wealth for Boston families, and help bring Boston one step closer to becoming a Green New Deal city.”
The new investments in affordable homeownership were part of Mayor Wu’s first operating budget proposal and federal spending plan, which were formally filed with the Boston City Council earlier this month.
The proposal includes $60 million in ARPA funds to:
Accelerate the production of affordable homeownership units supported by the Mayor’s Office of Housing (MOH)
Support down payment assistance programs, including for first-generation buyers
Expand the ONE+Boston Mortgage program, which lowers interest rates for income-eligible buyers
In addition, the proposed FY23 Operating Budget includes $3.4 million for homebuyer assistance programs, for a total of $10.2 million over the next three years. These investments are on top of $36 million from other City sources to support MOH’s homeownership development pipeline, which currently includes 312 new income-restricted units across 19 developments, all projected to break ground within the next three years. With additional support from ARPA funds, this pipeline of affordable homeownership units is expected to grow significantly. Together, these funds represent a significant increase in the City’s investment in affordable homeownership programs and production compared to previous years.
The proposed investments in homeownership are part of an unprecedented commitment of $380 million to address housing affordability and stability through the Operating budget, the Capital budget, and federal recovery funds to build and acquire new affordable units, upgrade public housing, and expand housing stability services and an expanded voucher program.
“We are thrilled that Mayor Wu and our city councilors understand the needs of thousands of MAHA members and graduates,” said Symone Crawford, Executive Director of the Massachusetts Affordable Housing Alliance. “And I’m proud of our MAHA community leaders who have worked so diligently to make this happen. This is an amazing accomplishment and a strong foundation for all of us to build on.”
“Investment in affordable housing at all levels matters if we are to foster generational wealth,” said Beverly Williams, Executive Team Leader with the Greater Boston Interfaith Organization. “GBIO is proud to celebrate this historic investment in affordable housing that does just that.”
Two programs slated to receive funding from the proposal, the ONE+Boston program and the financial assistance program for first-time homebuyers (FAP), assisted more than 150 households buy homes in the last year. Of those households, 60% were Black, Indigenous or People of Color (BIPOC).
“Dedicating these federal funds to first-generation and affordable homeownership will anchor our families in Boston and help close the racial wealth gap,” said Councilor Kenzie Bok, Chair of the Committee on COVID-19 Recovery. “I’m thankful for the Mayor’s partnership and for all the advocates who have pushed the City of Boston to make this enduring commitment.”
Boston has an overall homeownership rate of 35 percent, considerably less than the statewide homeownership rate of 62 percent. Homeownership rates differ significantly by race and ethnicity, as 44 percent of Boston’s white households are homeowners, compared to 31 percent of Black or African American households, 30 percent of Asian or Pacific Islander households, and 17 percent of Hispanic or Latinx households.
The Mayor’s Office of Housing works to expand access to homeownership by creating and preserving affordable homeownership units and providing financial assistance to aspiring homebuyers, particularly first-generation homebuyers.
The ONE+Boston program was designed to supplement one of the state’s existing affordable mortgage programs (the ONE Mortgage) by providing qualified buyers, based on area median income (AMI), additional discounts on interest rates. With the ONE+Boston program, qualified Boston residents who earn between 80% and 100% AMI will receive a half percent (0.5%) discount rate off the reduced interest rate offered through the ONE Mortgage product (currently about 4.65%). Boston residents who earn below 80% AMI will receive up to one percent (1%) off of the current ONE Mortgage rate. Qualified buyers will also be eligible for downpayment and closing cost assistance through the Boston Home Center.
The ONE+Boston program and the First Generation Homebuyer Program are two of several City resources available to first-time homebuyers in Boston. Through the Boston Home Center, the City’s one-stop-shop for homebuyers and homeowners, residents receive assistance in purchasing, improving, and keeping their home through a suite of resources including training, financial help and counseling to first-time and first-generation homebuyers, guidance and funding for home improvements and efficiency upgrades, and counseling to help families avoid foreclosure. The Home Center also markets homes developed for income-eligible, first-time homebuyers.
For more information about the proposed budget, visit budget.boston.gov. For more information about the proposed ARPA spending plan, visit boston.gov/recover.
The Mayor’s Office of Housing is responsible for housing people experiencing homelessness, creating and preserving affordable housing, and ensuring that renters and homeowners can obtain, maintain, and remain in safe, stable housing. The department develops and implements the City of Boston’s housing creation and homelessness prevention plans and collaborates with local and national partners to find new solutions and build more housing affordable to all, particularly those with lower incomes. For more information, please visit the MOH website.