First-Time Homebuyer Programs in Massachusetts

The down payment on a new home often represents the biggest hurdle for first-time homebuyers. In Massachusetts, where the average home value is $627,596, you would need a down payment of $125,519 to avoid private mortgage insurance.

Fortunately, first-time homebuyer programs in Massachusetts can help you achieve homeownership. There are also mortgages available that allow you to put less down on a home, though these typically come with income requirements and mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs to assist individuals from different financial backgrounds.

Massachusetts offers grants and loans to assist first-time homebuyers with covering down payments and closing costs. We have compiled the first-time homebuyer programs MassHousing offers to help you find the best option for your needs and situation.

MassHousing Mortgage Loans offers affordable, fixed-rate options for both first-time and repeat homebuyers in Massachusetts. The program provides conventional and FHA loans with low down payment requirements. It also offers MI Plus, a unique mortgage insurance option that covers mortgage payments for up to six months (up to $4,000 per month) if the borrower becomes unemployed, providing an additional safety net.

MassHousing offers a Down Payment Assistance (DPA) program designed to help eligible homebuyers in Massachusetts with up to $30,000 for their down payment. This assistance comes in two forms: an interest-free deferred loan or a 15-year amortizing loan at a 2% fixed interest rate. The deferred loan requires no payments until the property is sold or refinanced, while the amortizing loan includes monthly payments. Buyers can use the assistance in any city or town in Massachusetts when paired with a MassHousing mortgage.

Aside from statewide first-time homebuyer programs in Massachusetts, city-specific programs are also available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in Massachusetts that provide first-time homebuyer programs for potential residents.

Zero-down-payment loan programs in Massachusetts don't require you to put money down when purchasing a home. USDA and VA loans are government-backed loans with no down payment.

USDA loans assist homebuyers in rural areas, providing opportunities for those who might not qualify for traditional financing. They are issued by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program.

These loans offer several benefits, including the ability to purchase a home with no down payment required. They also feature competitive interest rates, which can make homeownership more affordable. USDA loans are intended for low- to moderate-income families, helping secure housing in eligible rural areas.

To qualify for a USDA loan, your property must be 2,000 square feet or less and located in a USDA-eligible rural area with a population under 35,000. Additionally, you must meet certain income limits, which vary depending on where you live. For example, in Dukes County, MA, the income limit for a four-person, low-income household is $108,400, while in Nantucket County, MA, it is $122,100. Understanding these criteria can help determine if a USDA loan is right for you.

VA loans are a mortgage option offered by the U.S. Department of Veterans Affairs, catering to veterans, active-duty service members and certain members of the National Guard and Reserves. These loans provide an opportunity for eligible individuals to purchase a home with favorable terms.

One of the standout features of VA loans is the no-down payment requirement, making homeownership more accessible. Additionally, VA loans do not require private mortgage insurance (PMI), which can significantly reduce monthly payments. Generally, these loans also offer lower interest rates compared to conventional loans. As of November 2024, the APR for a 15-year fixed-rate VA loan in Massachusetts is 6.10%, while the 30-year fixed-rate VA loan stands at 6.21%.

To qualify for a VA loan, you must meet specific eligibility requirements. These include your length of service or service commitment, duty status and character of service. Income limits may apply depending on your location, and a valid Certificate of Eligibility (COE) is necessary to proceed with the application.

First-time homebuyers in Massachusetts can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA loans and conventional loans are frequently compared because they are the two most common types of mortgages. FHA loans require a minimum down payment of 3.5%, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements, making them less accessible for some borrowers.

As of November 2024, the current APR for a 15-year fixed-rate conforming loan in Massachusetts is 6.00%. In contrast, the APR for a 15-year fixed-rate FHA loan is 6.56%. FHA loans often have higher APRs due to additional fees and costs associated with government-backed loans.

Use our FHA vs. conventional loan calculator below to compare both mortgage programs and determine the best option.

We have answered some frequently asked questions about first-time homebuyer programs in Massachusetts to help you determine the best option for your needs and move closer to homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in Massachusetts to help you with the homebuying process.