Massachusetts is a wonderful place to buy your first home.

The state is small but mighty, rich in history and home to some of the most-loved sports teams in the nation. But whether you are looking to deck out a shrine to Tom Brady or enjoy a cozy colonial home, you must take the necessary steps to becoming a first-time homebuyer. Massachusetts has a variety of options for first-time homebuyers who want to get an affordable loan and buy the house of their dreams.

Use this guide to start your journey toward becoming a home buyer in The Bay State.

Real Estate Prices in Massachusetts

Is this a good time to buy?

As of late 2018, housing prices in Massachusetts are quickly going up (and houses are quickly selling.) Land prices are also skyrocketing, encouraging owners to build bigger houses and sell them for higher prices.

To meet current demands in the housing market, state legislators are putting away over $1 billion to boost housing production. You might see affordable housing options popping up around the Foxboro, Seekonk, and Norfolk areas.

Bostonians do get a bit of good news, however—housing prices are not increasing as fast as market watchers are used to seeing.

Buyers who are ready to jump into the fast-moving Massachusetts housing market should know that there are many options for financing their home purchase.

Loan Options for First-Time Homebuyers in MA

Don’t be discouraged by rising prices throughout the state. Soon-to-be homeowners have many options for obtaining a loan that will help them secure a mortgage and buy a home.

But before you settle on a loan, shop around and compare interest rates, down payment requirements, and other loan terms.

Federal Loans

FHA and USDA loans are loan programs offered by the federal government. Borrowers choose these options because often the most forgiving loans that allow buyers to obtain a mortgage, even if they do not have the best credit history or are prepared to shell out a huge down payment.

Veterans can also apply for a VA loan; they do not need a high credit score to apply and can get low-interest rates without a high down payment.

Learn more about how these loan programs can benefit first-time homebuyers on our blog.

State Loans

Massachusetts buyers can also apply for state loans that offer down payment and closing cost assistance, as well as other opportunities to save money. Often, these loans are available for residents who are looking to purchase an owner-occupied home in the state.

Check out the following loan programs and see which option is best for your financial situation.

ONE Mortgage

Offered through Massachusetts Housing Partnership.

Options for first-time homebuyers:

  • 30-year fixed rate mortgage with discounted interest rates
  • Pay around 3% down payment without having to pay mortgage insurance
  • Buyers with low to moderate income may qualify for reduced monthly payments for a number of years

MassHousing Loan

Offered through the Massachusetts Housing Finance Agency (MassHousing).

Options for first-time homebuyers:

  • 30-year fixed-rate mortgage
  • Low down payment
  • Affordable mortgage insurance
  • Mortgages insured by mortgage payment protection

Rehabilitation Mortgage

Offered through: MassHousing

Options for first-time homebuyers:

  • Low down payment
  • Closing cost assistance
  • Opportunity to finance 50% of home’s appraisal value (after proposed renovations) to go toward renovations and related expenses

(This is a great fixer-upper mortgage option.)

Operation Welcome Home Loans

Offered through: Operation Welcome Home


  • First-time homebuyer
  • Repeat buyers (limited to certain cities)
  • Active duty military or National Guard member, honorably discharged veteran, member of the Reserves, Gold Star family members

Options for those who qualify:

  • Down payment assistance
  • Closing cost assistance
  • Mortgage insurance options

What are MA mortgage credit certificates?

First-time homebuyers can be intimidated by the purchase price and other fees that come with applying for a mortgage or buying a house. That’s why there are mortgage credit certificates. In short, mortgage credit certificates help to ease buyers’ minds by offering lower mortgage payments through a tax credit.

Here’s how it works. Buyers can already deduct the interest they pay on their mortgage each year. With an MA mortgage credit certificate, buyers will deduct less of their mortgage in exchange for dollar-for-dollar credit on the amount that was not deducted.

For example, let’s say you would normally deduct $20,000 worth of interest at the end of the year. If you receive a mortgage tax credit for 20% of that interest, you would deduct $16,000—but you would also take $4,000 off the amount of tax you owe at the end of the year. For many buyers, they can pad their pockets with a bit more money during tax season.

Mortgage credit certificates are usually reserved for first-time homebuyers. Talk to lenders about this opportunity to save on your mortgage payments.

Other Tax Breaks and Opportunities To Save

In addition to mortgage credit certificates, first-time homebuyers may be able to deduct money and reduce mortgage payments through the following programs:

  • Mortgage points deductions
  • Tax-free IRA withdrawals
  • Home office deductions
  • Home energy tax credits
  • PMI deductions

How First-Time Homebuyers Can Qualify for Loans

The more qualified you are to get a loan, the easier it will be to find low-interest rates, low down payment requirements, and more affordable housing for you and your family. Take the following steps to prepare yourself for mortgage loan applications.

Look at your credit scores.

High credit scores help buyers qualify for more affordable mortgages with lower interest rates. If you have not checked your credit score, you can look online. Buyers may want to spend some time improving their credit score before they start shopping for mortgages.

Take homebuyer education courses.

Most lenders require borrowers to take a homebuyer education course before they apply. These courses can be found online through My Mass Mortgage.

Do research for additional assistance.

In conclusion, if you are looking for additional help finding public housing, obtaining rental assistance, or obtaining energy assistance, reach out to the Massachusetts Department of Housing and Community Development.