Buying a house in Massachusetts: First Time Buyer

First Time Buyer

Massachusetts, one of the original Thirteen Colonies, boasts a rich historical heritage, but its real estate prices remain contemporary and relatively high. As of December 2022, the median home price in Massachusetts stood at $534,000, which is over $100,000 above the national median, according to Redfin.

However, there’s good news for first-time homebuyers in Massachusetts. They have access to low-interest loans and various programs designed to make homeownership more affordable. MassHousing and the nonprofit Massachusetts Housing Partnership offer several options to assist first-time homebuyers in the state.

Massachusetts First-Time Homebuyer Loan Programs

  1. MassHousing Mortgage Tailored for first-time homebuyers, MassHousing provides a fixed-rate mortgage with a unique feature called MI Plus. This feature offers mortgage payment protection, covering both the mortgage principal and interest in the event of job loss. MI Plus can provide payment coverage for up to six months, with a maximum of $2,000 per month.

Borrower Requirements:

  • Must meet credit and other eligibility criteria set by the mortgage lender.
  • Completion of a homebuyer education course is mandatory.
  • Income must be within MassHousing’s income limits.
  • Collaboration with an approved lender is required.
  • The property must be a single- to four-family home or condominium.

Property Requirements:

  1. MassHousing Purchase and Renovation Loan If you’re purchasing a home that requires repairs, MassHousing offers a rehabilitation loan option that combines financing for both the home purchase and renovation expenses into a single mortgage. Borrowers can finance up to 75 percent of the home’s “as completed” appraised value for renovation costs.

Borrower Requirements:

  • Must meet credit and other eligibility criteria specified by the mortgage lender.
  • The amount borrowed for renovations must be at least $10,000 and should cover the renovation itself, inspection and title fees, and a contingency reserve (equivalent to 10 percent of the total renovation cost).
  • Income must fall within MassHousing’s income limits.
  • The property must be a single- to four-family home.

Property Requirements:

  1. MassHousing Operation Welcome Home MassHousing’s Operation Welcome Home program offers a fixed-rate mortgage to military members and veterans who are first-time homebuyers. Notably, the first-time buyer requirement does not apply to military members and veterans buying in Boston and select markets.

In addition to the mortgage, the program provides closing cost assistance of up to $2,500, which can be combined with MassHousing’s down payment assistance. To qualify, borrowers must be part of the National Guard or Reserves, active-duty military, veterans, or Gold Star family members. They must also meet income limits and other eligibility criteria.

These programs aim to make the dream of homeownership more attainable for first-time buyers in Massachusetts, even in a market with relatively high real estate prices.

Massachusetts Housing Partnership ONE Mortgage Program

 

The Massachusetts Housing Partnership (MHP) presents the ONE Mortgage, a 30-year fixed-rate loan tailored for low- and moderate-income first-time homebuyers. This program eliminates the need for private mortgage insurance and offers additional assistance to reduce the borrower’s monthly payments.

Borrower Requirements:

  • A 3 percent down payment is required for a single- or two-family home or condominium; a 5 percent down payment is necessary for a three-family home.
  • Minimum credit score of 640 for single-family homes or condos; minimum credit score of 660 for two- or three-family homes.
  • Maximum 38 percent debt-to-income ratio (with exceptions up to 43 percent in some cases).
  • Assets must not exceed $75,000, excluding college or retirement savings.
  • Completion of homebuyer education courses is mandatory.
  • Income must meet MHP’s specified limits.

Property Requirements:

  • The property must serve as the primary residence.
  • Eligible properties include single- to three-family homes or condominiums.

Massachusetts Down Payment Assistance

MassHousing Down Payment Assistance Program

 

MassHousing extends down payment assistance (DPA) to first-time homebuyers, offering support of up to $50,000 or 10 percent of the home’s purchase price, whichever amount is lower. This assistance is in the form of a 15-year fixed-rate loan with a 2 percent interest rate, to be repaid upon the sale of the home or refinancing.

Borrower Requirements:

  • Income must align with MassHousing’s income limits, except when purchasing in Boston or specific “Gateway Cities” such as Lowell, Springfield, and Worcester. In these areas, borrowers can earn up to 135 percent of the area median income (AMI) and still qualify.

Property Requirements:

Eligible properties encompass single- to four-family homes and condominiums.

MassDreams

MassDreams, introduced in the autumn of 2022, provides immediate financial aid to first-time homebuyers in 29 communities that experienced substantial pandemic-related challenges. Eligible applicants, with incomes reaching up to 135 percent of their local median income, may be eligible to receive up to $50,000 to cover down payments and closing costs, contingent on their purchasing location and income level. These funds are intended to complement a primary mortgage from either MHP or MassHousing.

MassHousing Workforce Advantage 2.0 Program

MassHousing’s Workforce Advantage 2.0 Program provides first-time homebuyers with up to $50,000 in down payment assistance. Under this program, buyers secure a fixed-rate MassHousing Mortgage (inclusive of MI Plus protection) alongside a down payment assistance loan, featuring a zero-percent interest rate. Payments on the down payment assistance (DPA) loan are deferred until you sell the property, transfer ownership, or repay or refinance your primary mortgage.

Borrower Requirements:

  • Eligibility extends to those with incomes of up to 80 percent of the area median income (AMI).

Property Requirements:

  • Eligible properties include single- or two-family homes and condominiums.

Other first-time homebuyer loan programs

  • Beyond the offerings provided by MassHousing and the Massachusetts Housing Partnership, first-time homebuyers have the option to explore FHA, VA, and USDA loans. These loan programs feature terms and rates that can simplify the homebuying process. For a comprehensive overview of these and additional options, refer to MasshHousing guide on first-time homebuyer loans and programs.

Areas Of Operation:

Greater Boston Area

Inside route 495

(215)919-6683

MyCoffeeIsReallyGood@Gmail.com

About Company

BuildEstate LLC is active in real estate brokerage in both residential and commercial, building and developing, design and construction, as well as property management. We also offer lucrative real estate investment opportunities to our clients. 

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