There are a lot of barriers for potential first time home buyers in Massachusetts thanks to the state’s expensive and competitive housing market. In Metro Boston, low supply, high demand, and a median home price of $605,000 — which is much higher in downtown Boston! — have kept many first time buyers out of the market. The good news? There are tons of first time home buyer programs in Massachusetts that can help you get into the home of your dreams including low interest rate mortgages and down payment assistance.
Here’s a complete look at the best first time home buyer grants in Massachusetts plus great loans for first time buyers.
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Down Payment Assistance in Massachusetts
While Massachusetts does not offer a mortgage credit certificate (MCC) program like many states, there are still many forms of down payment assistance that help first time home buyers break into the costly housing market in the state. Here are the primary statewide first time home buyer programs in MA that offer down payment and/or closing cost assistance.
Down Payment Assistance Program | MassHousing
MassHousing is a major semi-public agency that helps low-income and first time home buyers in Massachusetts buy a home. The agency’s down payment assistance program in Massachusetts is available to first time buyers in Boston and other Gateway Cities who earn up to 135% of the area median income and buyers in other areas who earn up to 100% of the area median income.
Get down payment assistance of up to 5% of the purchase price or $15,000. The down payment assistance is in the form of a 15-year loan with a fixed interest rate of 2%. The down payment loan becomes due if the home is sold or refinanced.
MassHousing, 1 Beacon St, Boston, MA 02108 (617) 854-1000
Operation Welcome Home | MassHousing
As an eligible active-duty military member, veteran, Gold Star family member, or member of the Reserves or National Guard, you can qualify for closing cost assistance in Massachusetts through MassHousing.
The program offers up to $3,000 in closing cost assistance in MA and it can be combined with down payment assistance of up to 5% or $15,000. To qualify, you must meet income and loan limits and be a first time home buyer in Massachusetts unless you’re buying a home in select cities like Cambridge and Boston.
MassHousing, 1 Beacon St, Boston, MA 02108 (617) 854-1000
First Time Home Buyer Loans in Massachusetts
While down payment assistance programs in MA are incredibly helpful, you still need an affordable mortgage. There are two major programs in Massachusetts that offer discounted mortgage rates for first time buyers in Massachusetts that can be combined with down payment assistance.
MassHousing Mortgage | MassHousing
MassHousing is a semi-public housing agency that offers a mortgage program for first time homebuyers in Massachusetts. The MassHousing mortgage offers financing with no hidden fees, competitive fixed interest rates, and local loan servicing. The program offers lower interest rates, low down payments and mortgage payment protection in case you lose your job.
The MI Plus Mortgage Insurance feature of the MassHousing mortgage is a unique and important feature. If you lose your job within the first 10 years of the loan, the principal and interest portion of your mortgage payments will be covered up to $2,000 per month and for up to 6 months. The benefit is included at no cost.
MassHousing, 1 Beacon St, Boston, MA 02108 (617) 854-1000
One Mortgage | Massachusetts Housing Partnership
The One Mortgage program is one of the most popular first time home buyer loans in Massachusetts. This statewide program offers a 30-year, fixed-rate mortgage with a discounted interest rate. A down payment of only 3% is required and there is no private mortgage insurance (PMI). To qualify for the loan program, your household income can’t exceed 100% of the area median income. In Suffolk County, for example, that’s $79,310 for a one-person household.
You can use the program to buy a condo, single-family home, or a two- or three-family home through a participating lender.
The most unique aspect of the One Mortgage program is the interest subsidy. If your income is below 80% of the area median income with a down payment of less than 20% and fewer than $75,000 in liquid assets, you can automatically get a state-funded interest subsidy rolled into your loan. This subsidy lowers your monthly mortgage payments for the first 7 years.
You do not need to pay the subsidy back but it is not a first time home buyer grant in Massachusetts. Instead, it’s secured by a second mortgage with a 0% interest rate and a 30-year term. It’s only recaptured when you sell or transfer the home.
Massachusetts Housing Partnership, 160 Federal St # 2, Boston, MA 02110 (617) 330-9955
Nationwide First Time Home Buyer Loans
You have options beyond the Massachusetts first time home buyer loans like the One Mortgage program. If you don’t qualify for one of the programs below, or they aren’t quite right for your needs, a federal loan for first time home buyers may be a good option.
- VA Loans through the Department of Veterans Affairs are considered the best mortgages in the U.S. Available to veterans, military members, and families, VA loans have low closing costs, no down payment requirement, and no private mortgage insurance.
- FHA Loans through the Federal Housing Administration are popular with first time buyers as they require a down payment of just 3.5%. The drawback to an FHA loan? Mortgage insurance premiums which can be quite expensive.
- USDA Loans through the Department of Agriculture are the only mortgages aside from VA loans that do not require down payments. To qualify for a USDA loan, you must buy a home in a rural or semi-rural area, however.
- HomeReady through Fannie Mae is designed for first time buyers. This conventional mortgage program only requires 3% down.
- Home Possible through Freddie Mac is another conventional mortgage program that requires a 3% down payment.
First Time Home Buyer Programs in Boston
Buying a home in Boston? When you’re buying in one of the most expensive housing markets in the United States, you can probably use a little help! The good news is there’s a great program specifically for first time home buyers in Boston with discounted interest rates and down payment assistance.
ONE+Boston First Time Home Buyer Loan | Boston Home Center
Introduced in June 2020, ONE+Boston first time home buyer loans in Boston combine closing cost and down payment assistance with a low interest rate for first-time buyers. Get the lowest possible interest rate for a 30-year fixed mortgage if you meet income and asset guidelines and buy a home within the city of Boston. The program uses funds from the City of Boston in partnership with the Massachusetts Housing Partnership (MHP) with interest rates 0.5% to 1% lower than the already discounted rates for ONE mortgages.
The loan program can be combined with down payment assistance of up to 5% through the Boston Home Center.
Note that you need to pay at least 1.5% of the purchase price as a down payment and complete a Homebuying 101 class.
Boston Home Center, 26 Court St #9, Boston, MA 02108 (617) 635-4663
You can see additional down payment assistance programs in other Massachusetts cities through the Massachusetts Housing Partnership.
Massachusetts First Time Home Buyer FAQs
Who is considered a first time home buyer in Massachusetts?
The definition of a first time buyer depends on the program. In most cases, you are a first time buyer if you haven’t owned a home in the last 3 years.
Do I have to pay back down payment assistance in Massachusetts?
While it depends on the program, most first time home buyer programs in Massachusetts only require paying down the assistance if you sell your home or refinance. Some programs work like a second loan with a low, fixed interest rate.
What programs are available for first time home buyers in Massachusetts?
There are low interest first time home buyer loans in Massachusetts that can be combined with down payment assistance. There are also down payment assistance programs offering up to 5% of the purchase price to help you buy a home.
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