SoftSecond FAQs

How can this program help me buy a home?

Before purchasing a home, you must qualify through a participating bank. Banks evaluate a variety of factors in qualifying prospective borrowers, including credit history, mortgage amount, amount of monthly payments, and income. The bank usually requires your housing ratio which is the percentage of your monthly income used to pay your mortgage payments, taxes and insurance to be less than 33 percent. The two-mortgage structure, the interest subsidy and the lower interest rates through SoftSecond help bring down monthly costs and lower the borrower's ratio.

How are the 1st and 2nd mortgage amounts and the subsidy determined?

The first and second mortgage amounts are based on what you can afford. The first mortgage can be up to 77 percent of the property value. The second mortgage is always 20 percent of the purchase price of the property (or, if you are purchasing a home that costs less than $100,000, the second mortgage will be set at $20,000). If you choose to put more than three percent down, that percentage will be subtracted from your first mortgage amount. You are expected to contribute approximately 28-33 percent of your monthly income to carry the first and second mortgages and other housing expenses. The amount of subsidy you receive is the difference between the amount you are able to contribute to the second mortgage and the payment's full monthly amount.

What happens if I want to sell or refinance?

All subsidy awarded by MHP is secured by a mortgage. If you receive subsidy and later decide to sell your home, you are responsible for repaying the subsidy according to the SoftSecond Program Guidelines. If you sell within five years of purchase, you must repay the full amount of the subsidy applied to the interest payments on the second mortgage. If you remain in your home for five years or longer, the repayment is equal to the lesser of the amount of the subsidy used or 20 percent of the net appreciation gained at the time of sale. However, in no event shall this amount, when combined with your other secured debt, exceed 97 percent of the property's value.

For more information, email SoftSecond or call 1-800-752-7131.