Massachusetts First-Time Home Buyer | Programs & Grants

What to know about buying a house in Massachusetts

Buying your first home can be a real challenge. But, if you’re a Massachusetts first-time home buyer, you can expect a great deal of support.

The Bay State has plenty of assistance for first-time buyers: from homeownership counseling and educational courses, to down payment assistance grants or loans that could help you buy a home much sooner than you dreamed possible. Here’s how to get started

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Massachusetts home buyer overview

The median price for a single-family home in Massachusetts was $549,450 in March 2022, according to Massachusetts Association of REALTORS. That was up 13.3% from the year before.

Such huge price rises are a serious challenge to Massachusetts first-time home buyers. How can you hope to reach your savings goals when the target keeps moving?

Well, read on for more information about down payment assistance, which could help you make up any shortfalls.

Massachusetts home buyer stats

Average Home Sale Price in MA	$549,450
Minimum Down Payment in MA (3%)	$16,483
20% Down Payment in MA	$109,890
Average Credit Score in MA1	732
Maximum MA Home Buyer Grant2	5% of your purchase price, capped at $15,000 or $25,000 (MassHousing)

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Massachusetts

If you’re a first-time home buyer in Massachusetts with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans and service members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• Massachusetts state’s ONE Mortgage program: May include competitive interest rates and can be used with down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

MA first-time home buyer programs

MassHousing is a great starting point for any Massachusetts first-time home buyer.

This organization provides links to information and home-buyer education courses — both statewide and local — on its Housing Consumer Education Centers webpage. Most first-time buyer mortgages require you to attend such a course before you are eligible to apply.

For example, you will need to complete a homebuyer education course if you want to apply for MassHousing’s ONE Mortgage.

This loan program, available through participating lenders, can give you a mortgage with a competitive fixed rate and a 3% down payment. And you’re allowed to use down payment assistance (DPA) money toward that out-of-pocket cost.

But maybe the best news is that MassHousing Mortgages have no private mortgage insurance, even with less than 20% down. These loans also offer “extra assistance” to help lower your mortgage payments.

Indeed, the website says, “With these features, ONE Mortgage can lower your monthly payments by hundreds of dollars every month compared to other 30-year mortgages.”

Eligibility requirements for a MassHousing Mortgage include:

• Being a first-time homeowner with a minimum credit score of 640
• Your total assets must be less than $75,000
• Your household income must be below local income limits

You can see local income caps here and explore other requirements on the program’s website.

MA first-time home buyer grants

There are a variety of down payment and closing cost assistance programs local to Massachusetts and nationwide. Your real estate agent and/or loan officer can help you find programs you might be eligible for.

MassHousing has its own down payment assistance programs. But its website provides very little information about these. So they might be grants, forgivable loans, or repayable loans.

MassHousing invites you to “Call us at 888-843-6432 to speak with our homebuying experts,” if you have any questions. Start by asking what type of down payment assistance is on offer and whether you qualify.

What MassHousing does tell you is how much help you might receive

• Across most of Massachusetts, you can get up to 5% of your purchase price, capped at $15,000
• If you’re buying in one of the Commonwealth’s 26 “Gateway Cities,” that cap increases to $25,000 — though it’s still capped at 5% of your home purchase price.

Gateway Cities that allow higher DPA amounts include:

• Attleboro, Barnstable, Brockton, Chelsea, Chicopee, Everett, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Leominster, Lowell, Lynn, Malden, Methuen, New Bedford, Peabody, Pittsfield, Quincy, Revere, Salem, Springfield, Taunton, Westfield, and Worcester

See below if you’re looking for home buying assistance in Boston.

Buying a home in Massachusetts’s major cities

As you’d expect, Boston is by far the most expensive city in The Bay State for residential property. But the good news is that Boston home prices remained relatively steady between mid-2021 and mid-2022.

The next two biggest cities, Worcester and Springfield, are much more affordable. But the bad news is that prices were rising quickly there during the same period.

Boston first-time home buyers

The median list price in Boston in March 2022 was $799,900, according to Realtor.com. That was a 3.2% increase year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $24,000 for 3% down payment
• $159,980 for 20% down payment

The Boston Home Center can lend you up to $30,000 in down payment assistance for a single-family home and between $35,000 to $40,000 for a multi-family home. These loans charge no interest and you don’t have to make monthly payments. But you will have to repay it in full when you “refinance, or at the transfer of title, sale, or when you no longer keep the home as your primary residence.”

See the website for a list of eligibility criteria. But one is that your income cannot exceed 135% of the area median income. For a family of four living in Boston that is $101,050, according to the website.

Worcester first-time home buyers

The median list price in Worcester in March 2022 was $340,000, according to Realtor.com. That was up 15.3% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $10,200 for 3% down payment
• $68,000 for 20% down payment

The City of Worcester’s Housing and Neighborhood Grants program lets you download a handy PDF concerning its down payment assistance offering. You should read that for all the information you need.

It seems that you can get up to $5,000 in help to cover the “affordability gap,” providing you’re eligible. There are caps on household income and assets.

This assistance takes the form of a forgivable second mortgage. And that means you don’t make monthly payments or pay interest. But you’ll have to repay the loan, plus interest, if “the property is sold or transferred in full or part, (including refinances) during the first three (3) years of ownership, or upon a default under the conditional agreement (for example the borrower’s failure to occupy the home as their primary residence).”

As long as you don’t sell, refinance, or move within three years, you won’t owe a cent on that loan.

Springfield first-time home buyers

The median list price in Springfield in March 2022 was $239,900, according to Realtor.com. That was up 11.6% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $7,200 for 3% down payment
• $47,980 for 20% down payment

The City of Springfield’s down payment assistance program offers up to $4,000 in financial help. You can put that toward your down payment or some of your closing costs.

As with Worcester’s program, this takes the form of a forgivable second mortgage. So there are no monthly payments nor any interest charges.

But, in Springfield’s case, the loan is forgiven over five years at a rate of 20% each year. If you sell, refinance or move out during those five years, you’ll have to repay the outstanding portion. For example, 80% after the end of Year 1 or 20% after Year 4. After Year 5, you owe nothing.

Click the link above to read the full legal version of that summary, plus other conditions and eligibility criteria. But you’ll need to be in a low-income or moderate-income household to qualify.

Where to find home buying help in Massachusetts

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the commonwealth of Massachusetts or their local area.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources:

Statewide and regional first-time home buyer programs in Massachusetts

Massachusetts first-time home buyer resources by city

You can see a list of programs by city and town on HUD’s website here.

What are today’s mortgage rates in Massachusetts?

You can see today’s live mortgage rates in Massachusetts here.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three to five mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: Massachusetts Association of REALTORS Housing Statistics Report
²Source: Experian.com study of 2021 and 2020 data
³Based on a review of the state’s available DPA grants at the time this was written