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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 housing assistance for first-time buyers: from homeownership counseling and educational courses, to loans and down payment assistance grants 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 $552,950 in November 2022. That was a slight increase of 0.72% from the year before, according to the Massachusetts Association of REALTORS.
Of course, average prices vary widely depending on where you buy. For instance, the median price in Springfield is just $249,500 while Boston comes in at nearly $800,000. If you’re buying in one of the pricier parts of the state, check out the assistance programs below to see if you could be in line for some help.
Massachusetts home buyer stats
| Average Home Sale Price in MA1 | $552,950 |
| Minimum Down Payment in MA (3%) | $16,600 |
| 20% Down Payment in MA | $110,600 |
| Average Credit Score in MA2 | 732 |
| Maximum MA Home Buyer Grant3 | 5% of home price, or up to $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 U.S. 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 that 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 active-duty 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
- MHP 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
Massachusetts has two statewide nonprofits that offer first-time buyers a variety of affordable mortgage options. Here’s what you need to know about both of these organizations.
MassHousing
The Massachusetts Housing Finance Agency, or 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.
A MassHousing mortgage can help first-time home buyers who are using either conventional or FHA financing. It offers a 30-year fixed-rate loan that comes with MI Plus Mortgage Insurance — up to six months of mortgage payment protection in the event of job loss.
To qualify, you’ll need to:
You can also pair a MassHousing Mortgage with down payment assistance. We explore this in more detail below.
Massachusetts Housing Partnership
The Massachusetts Housing Partnership (MHP) is another affordable housing option for first-time home buyers. This nonprofit’s flagship first-mortgage program could be the best choice for many.
MHP’s One Mortgage program is available through participating lenders and can provide a mortgage with a competitive fixed rate and a 3% down payment. You’re also allowed to use down payment assistance (DPA) money toward your out-of-pocket cost.
The best news is that the One Mortgage program has no private mortgage insurance, even with less than 20% down. And these loans can offer “extra assistance” to help lower your mortgage payments.
Eligibility requirements for the MHP One 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
- Successful completion of a home-buyer education course
You can see local income-eligibility caps here and explore other requirements on the MHP website.
MA first-time home buyer grants
There’s a variety of down payment and closing cost assistance programs both nationwide and local to Massachusetts. Your real estate agent or loan officer can help you find programs for which you might be eligible.
MassHousing runs two of its own down payment assistance programs that are worth looking into:
- Across most of Massachusetts, you can get up to 5% of your purchase price or $15,000, whichever is less
- If you’re buying in one of the Commonwealth’s 26 “Gateway Cities,” the cap is still 5% of your purchase price, but increases to a maximum of $25,000
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
Aside from those details, the MassHousing website provides very little information about its DPA options. So they might be grants, forgivable loans, or repayable loans.
You can call (888) 843-6432 to speak with a MassHousing homebuying expert if you have any questions. Start by asking what type of down payment assistance is on offer and whether you qualify.
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. The next two biggest cities, Worcester and Springfield, are much more affordable. But the bad news is that prices are rising more quickly.
Boston first-time home buyers
The median list price in Boston was $799,000 in November 2022. That was a 6.5% increase year-over-year, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $24,000 for 3% down payment
- $159,800 for 20% down payment
The Boston Home Center can lend up to 5% of your home’s purchase price in down payment assistance. That’s capped at $50,000 if your income is less than 100% of the area median income (AMI), or $35,000 if your income is between 101% and 135% of the AMI. For a family of four living in Boston, that’s a household income of $111,850, according to the website.
This DPA loan charges no interest and you don’t have to make monthly payments. But you will have to repay it in full when you refinance, transfer the title, sell the home, or when you no longer live there as your primary residence.
Worcester first-time home buyers
The median list price in Worcester was $369,000 in November 2022. That was up 13.5% year-over-year, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $11,100 for 3% down payment
- $73,800 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. Borrowers can get up to $5,000 in help to cover the “affordability gap,” providing they’re income eligible. You should read that for all the information you need.
This assistance takes the form of a forgivable second mortgage. 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 was $249,500 in November 2022. That was up 8.9% year-over-year, according to Realtor.com.
If you want to buy a home at that median price, your down payment options might fall between:
- $7,500 for 3% down payment
- $49,900 for 20% down payment
The City of Springfield’s down payment assistanceprogram 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. 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 of 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 cansee today’s live mortgage rates in Massachusetts here.
When you’re ready to start the home buying process, experiment with a mortgage calculator to see how down payment and interest rates will affect your monthly payment. Then 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. Because 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
