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2022 First-Time Homebuyer Programs in Massachusetts

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If you’re a first-time homebuyer, you know the financial challenges involved in buying a home. If you live in Massachusetts, you may qualify for a statewide or local first-time homebuyer program that provides financial support to soon-to-be homeowners. It’s worth noting that some of these programs require you to pay back the funds if you refinance or sell your home or fail to meet the minimum occupancy period.

Keep reading to learn more about what these programs entail, including how to qualify for them.

Massachusetts statewide and local first-time homebuyer programs

If you’re a first-time homebuyer, depending on where you live in Massachusetts, you may qualify for a statewide or local down payment assistance (DPA) program if you meet certain location, income and property requirements.

Program nameAssistance amountAssistance typeWhere it’s available
Town of Easton Homebuyer Assistance ProgramUp to $95,000 or 35% of purchase price — whichever is lowerGrantEaston
South Shore HOME ConsortiumUp to $20,000Deferred payment loanBraintree, Holbrook, Quincy and Weymouth
ONE+BostonReduced effective interest rate by up to 2%Heavily discounted, fixed, 30-year interest ratesBoston
First Time Homebuyers Down Payment Assistance and Counseling ProgramUp to $7,500 for nonsubsidized property and up to $3,000 for HOME-subsidized propertyForgivable loan after five yearsArlington, Chelsea, Everett, Malden, Medford, Melrose, Revere and Winthrop

What to know about different types of down payment assistance

All down payment assistance programs offer different types of aid and have unique applicant requirements, but for the most part, they follow similar structures. These are two types of down payment assistance you may encounter.

Grants

When you come across a program that offers assistance in the form of a grant, you won’t have to repay that money. Generally, you’ll find down payment grants offered by your state or local municipality. In order to qualify for a grant, typically you must qualify for a mortgage first. To help cover the costs of the grant, some programs charge higher interest rates, so make sure you budget accordingly.

Second mortgages

Another common form of support is a “second mortgage.” For this type of assistance, you need to take out a regular mortgage first, which is your first mortgage, then the down payment assistance is offered in the form of a second mortgage, which is placed behind your first mortgage and acts as a lien on the property. With some programs, you may have to make payments on the second mortgage while you own the home, but other programs will completely forgive the loan amount after you live in the home for a certain period of time. It’s important to research the unique terms of any programs for which you apply.

How Massachusetts first-time homebuyer programs work

Massachusetts has a wide variety of first-time homebuyer programs available to residents of this New England state. While each program has its own unique application process, many require the following steps.

  1. Meet program requirements. All first-time homebuyer programs have clear sets of eligibility requirements you need to meet surrounding factors such as income, recent homeownership and who will be occupying the home you plan to buy. Get familiar with the requirements of each program you want to apply for.
  2. Find a home in an eligible city. Some first-time homebuyer programs allow you to buy a home in any area of the state, but some are designed for select cities, communities or counties. Research local programs as well as statewide ones to have as many options as possible.
  3. Understand the length of ownership restrictions. Many of these programs require that you own the home for a certain number of years in order to reap the full financial benefits. If you sell or refinance the home before the agreed-upon length of ownership, you may have to repay some or all of the financial aid you received.
  4. Pursue homeownership counseling or education. It’s fairly common for these programs to require homeownership counseling or education that will teach you about the responsibilities and potential costs of homeownership.

Massachusetts first-time homebuyer program requirements

Applying for first-time homebuyer programs can be quite a time commitment, so before you start applying, spend some time getting familiar with the basic requirements of any programs you think may be a good fit for you.

Here are a few examples of requirements for some popular Massachusetts first-time homebuyer programs.

Program name Credit score minimumDebt-to-income (DTI) ratio maximumMaximum income limitHow long you have to live in home
Town of Easton Homebuyer Assistance ProgramMust meet lender requirementsMust meet lender requirements$55,950-$86,300, depending on household sizeN/A
South Shore HOME ConsortiumMust meet lender requirements33% housing/front-end ratio, 45% back-end ratio$62,450-$117,750, depending on household size5 or 10 years, depending on amount of assistance
ONE+Boston640 (single-family home) or 660 (multifamily home)N/A$84,560-$159,456, depending on household sizeThe term of the mortgage loan
First Time Homebuyers Down Payment Assistance and Counseling Program62050%$70,750-$133,400, depending on household size5 years

THINGS YOU SHOULD KNOW

Because first-time homebuyer programs have income restrictions, it’s key that you understand which types of programs your income will exclude you from. Some programs will have set dollar limits for your specific household size (the larger your household is, the more you can make). Limitations on income are sometimes based on how much you make compared to local average income. You can learn more about Massachusetts’ current limits by visiting the U.S. Department of Housing and Urban Development (HUD) website and entering your state and county information.

National first-time homebuyer programs

Alongside local options, you may have some national first-time homebuyer program options. First-time buyers typically need to also qualify for one of the programs below to be eligible for one of the Massachusetts programs highlighted above, but these loans aren’t exclusive to first-time homebuyers.

Conventional loans. A conventional loan can come from a private lender. If you have a high credit score and need a larger loan amount than government-backed loans can provide, then you may find a conventional loan is a good fit for you. You generally need a 620 credit score to qualify for a conventional mortgage loan.

FHA loans. An FHA loan is a government-backed loan insured by the Federal Housing Administration (FHA). FHA loans are a good fit for first-time homebuyers with lower incomes who can’t qualify for conventional financing. To qualify, you need to be able to provide proof of stable income over the past two years.

VA loans. Military borrowers may qualify for a VA loan from the U.S. Department of Veterans Affairs (VA). Active-duty and veteran service members can qualify to buy up to a four-unit dwelling to be used as a primary residence. No down payment or private mortgage insurance (PMI) is necessary with a VA loan.

USDA loans. This is also a type of government loan, and it’s guaranteed by the U.S. Department of Agriculture (USDA). USDA loans are for homes in rural areas as defined by the USDA. You won’t need to make a down payment to get a USDA loan, and PMI isn’t required.

FAQs about Massachusetts first-time homebuyer programs

Who qualifies as a first-time homebuyer in Massachusetts?

Generally, individuals who haven’t owned a home in the past three years (ending on the date of purchase) are considered to be first-time homebuyers. That being said, you should confirm the specific qualifications of any program you apply for.

Can I qualify for down payment assistance in Massachusetts?

It’s possible to qualify for down payment assistance in Massachusetts if you meet all of the program requirements (income, location of home, etc.) of a program you apply for.

How much of a down payment do I need to buy a house in Massachusetts?

All programs have differing down payment requirements. If you qualify for a VA loan, you won’t need to make a down payment, but plenty of other programs will require one.

Home price trends in Massachusetts major areas

The higher the price of your home is, the bigger the mortgage loan you’ll likely need to take out, which will lead to higher monthly mortgage payments on a 30-year home loan. If you have your heart set on buying in Massachusetts, take a close look at your budget. In the second quarter of 2021, Nantucket County had one of the highest median home values at $1,218,781. In Suffolk County, which includes the city of Boston, home prices rose 9.2% over the past year, to a median price of $670,853, per the National Association of Realtors. This translates into a monthly mortgage payment of $2,546, up $147 year over year.

 

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