The Dorchester-based Olmsted Green development on the site of the old Boston State Hospital has received approval from the Federal Housing Administration to offer its condominium properties with a government-funded program that allows buyers to put only 3.5 percent down.
The property has made five condominium sales since the FHA-approval, said Serafin Sanchez, of Coldwell Banker Residential Brokerage and an on-site sales manager. Of those sales, four involved the FHA program.
â€œThere were a number of units under agreement but waiting for FHA approval,â€ Sanchez said. â€œNow that we have it, we are able to market the development to a larger base of prospective buyers. It gives us a greater edge over other projects.â€
For most developments, buyers typically have to put 10 percent, he said. At Olmsted Green, a two-bedroom condominium is selling for about $275,000 and 3.5 percent down is $9,000.
The FHA program provides loan protection and mortgage insurance to approved lenders. In addition to the 3.5 percent of total sale cost as a down payment, the buyers are qualified for competitive interest rates. Under the program, the FHA insures the loan. This allows for higher debt-to-income ratios, Sanchez pointed out. â€œLenders are more willing to be a little more flexible,â€ he said.
Sanchez said they hope buying will start to pick up even more since the federal government has extended the $8,000 tax credit for first-time homebuyers until April 30. In addition, Congress extended the program to include non first-time homebuyers. â€œNow you can qualify for a tax credit even if you are not a first-time buyer,â€ he said.
â€œI think people are more optimistic now,â€ Sanchez said. â€œThere are a number of things that are making people look at properties. Prices are lower and interest rates are still low. And you have the tax credit. Itâ€™s the perfect storm for getting some incentives that really make it a good time to buy.â€
The Olmsted Green site, being developed by the New Boston Fund, a real estate development trust, is located on 42 acres on the property of the former state hospital, a psychiatric facility that was closed in 1979. The project was initiated in 2005 and had its official major groundbreaking in 2007, Sanchez said.
The development currently includes 50 apartment rentals and 19 townhouse condominiums.
The rental units are part of the development but located across the street, he said. They are fully occupied. The first phase of the development was completed in 2008 and the first occupants of the rental units moved in December of 2008, he said. Ultimately the plans provide for a total of 72 condominiums of the site with construction on the remaining units linked to sales.
Olmsted Green has as a neighbor a 67-acre wildlife sanctuary called the Boston Nature Center, which is managed by the Massachusetts Audubon Society. The property is named after Frederick Law Olmsted, a renowned landscape designer of some one hundred years ago who laid out many city parks, including the Emerald Necklace, series of parks and ponds that winds throughout Boston, and Central Park in Manhattan.