Massachusetts first-time homebuyer assistance programs
One of the original Thirteen Colonies, historic Massachusetts has all-too-contemporary real estate prices. In January 2024, homes were selling for a median price of $585,959, according to Zillow — over $100,000 above the national median of $417,700.
The good news? Even with high prices, first-time homebuyers in the Bay State have access to low-interest loans and other programs that can help make homeownership more affordable. There are options available through MassHousing, a quasi-public agency charged with providing affordable housing financing, as well as another nonprofit, the Massachusetts Housing Partnership.
Massachusetts first-time homebuyer programs
MassHousing Mortgage
Well-suited to first-time homebuyers, MassHousing is a not-for-profit that sells bonds, using the profits to fund loans for low- to moderate-income borrowers. It offers fixed-rate mortgages featuring MI Plus, a type of mortgage payment protection that covers your loan’s principal and interest in the event of a job loss. MI Plus covers payments for as long as six months, and up to $2,000 per month.
Borrower requirements:
- Must meet credit and other eligibility requirements as determined by mortgage lender
- Must complete homebuyer education course
- Must meet MassHousing income limits
- Must work with an approved lender
Property requirements:
- Must be a single- to four-family home, or condominium
- Must be your primary residence
MassHousing Purchase and Renovation Loan
If you’re buying a home in need of repairs, MassHousing offers a rehabilitation loan option for financing both the purchase of the home and renovation costs in a single mortgage. The borrower can finance up to 75 percent of the home’s “as completed” appraised value for the renovation expense.
Borrower requirements:
- Must meet credit and other eligibility requirements as determined by mortgage lender
- Amount borrowed for renovations must be at least $10,000, and includes the cost of the renovation itself, inspection and title fees and a contingency reserve (10 percent of total reno cost)
- Must meet MassHousing income limits
Property requirements:
- Must be a single- to four-family home
MassHousing Operation Welcome Home
MassHousing’s Operation Welcome Home program offers a fixed-rate mortgage to first-time homebuyer military members and veterans. (The first-time buyer requirement doesn’t apply to military members and veterans buying in Boston and other select markets.)
Along with the mortgage, the program offers closing cost assistance up to $2,500, which can be combined with MassHousing down payment assistance. In order to qualify, borrowers must be a member of the National Guard or Reserves, active-duty military, veteran or Gold Star family member, and also meet income limits and other eligibility requirements.
Massachusetts Housing Partnership ONE Mortgage
The Massachusetts Housing Partnership (MHP) offers a 30-year fixed-rate loan, the ONE Mortgage, for low- and moderate-income first-time homebuyers. There is no private mortgage insurance requirement for this loan, and extra assistance is available to help lower the borrower’s monthly payments.
Borrower requirements:
- 3 percent down payment for a single- or two-family home or condominium; 5 percent down payment for a three-family home
- 640 minimum credit score for single-family home or condo; 660 minimum credit score for two- or three-family home
- Assets can’t exceed $75,000, excluding college or retirement savings
- Must complete homebuyer education courses
- Must meet MHP income limits
Property requirements:
- Must be primary residence
- Must be a single- to three-family home, or condominium
Massachusetts down payment assistance
MassHousing Down Payment Assistance program
MassHousing provides first-time homebuyers with down payment assistance (DPA) for 10 percent of the home’s purchase price, for up to $30,000 or $50,000 depending on where you’re buying. The assistance comes in two forms:
- An interest-free, deferred loan that only needs to be repaid when the original mortgage ends
- A 15-year, amortizing loan with a fixed interest rate of 2 percent
The DPA must be used in conjunction with a MassHousing mortgage, and has the same requirements, including area-specific income limits.
Other Massachusetts homebuyer assistance programs
Boston first-time homebuyer program
If you’re buying a home in Boston, you may be eligible for a grant of 5 percent of the purchase price plus closing costs. If you make less than 135 percent of the average median income (AMI), the grand maxes out at $30,000. If you make 100 percent of the AMI or less, you could receive up to $50,000 in grant funds. To qualify, you need to:
- Be a first-time homebuyer buying a one- to three-family residential property or condo in Boston
- Have the property as your primary residence
- Graduate from a Homebuying 101 class
- Get preapproved by a participating lender
- Have a household income less than 135 percent AMI
- Have less than $75,000 in assets
Worcester down payment assistance
For first-time homebuyers in Worcester, there’s a down payment assistance program that will help you with up to 3.5 percent of the purchase price, or up to $25,000. To qualify for, applicants must fall into at least one of four categories:
- Purchasing in a Qualified Census Tract (QCT), in which 50 percent of the households make 60 percent or less of the AMI, or has a 25 percent poverty rate.
- Disproportionately impacted households which include members of the following populations; Black/African-American, Hispanic/Latino and/or American Indian/Alaska Native.
- Are current recipients of income-restricted federal programs.
- Have low income at or below 185 percent of the poverty line, or at or below 40 percent of the county’s AMI.
Other Massachusetts first-time homebuyer loans
On a national level, there are loans geared toward first-time homebuyers that Bay Staters can take advantage of. Some of the loans you can explore include:
- FHA loans: Loans insured by the Federal Housing Administration (FHA) have more lenient financial requirements than other loans. You can get an FHA loan with 3.5 percent down and a credit score as low as 580.
- VA loans: For active-duty military, veterans and surviving spouses, a loan guaranteed by the U.S. Department of Veterans Affairs (VA) is a great option. These loans typically come with lower interest rates and don’t require a down payment.
- USDA loans: Loans guaranteed by the U.S. Department of Agriculture (USDA) also require no down payment, but you’ll need to buy in a designated rural area and meet area-specific requirements.
- HomeReady and Home Possible loans: HomeReady and Home Possible are loan programs created by government-sponsored enterprises Fannie Mae and Freddie Mac. They’re specifically for first-time homebuyers, requiring only 3 percent down and having more flexible income requirements.
Get started
MassHousing works with over 80 mortgage lenders in the state. MHP also maintains a list of participating lenders offering the ONE Mortgage. Keep in mind that lender requirements and interest rates in Massachusetts vary, so it’s important to compare options and fees before you commit to a loan offer.
Along with Massachusetts-specific programs, researching national first-time homebuyer programs may help you access extra assistance. Also, it’s smart to learn about the details of buying a house in Massachusetts before you go shopping. This way, you’ll know what to expect and make a more-informed purchase.
