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HL1Housing Living 101

Down Payment Assistance Programs in Massachusetts

By Tanika Patel
9 minute read

What Massachusetts offers to first-time homebuyers

Massachusetts has several down payment assistance programs run by state agencies, nonprofits, and lenders. Most are limited to first-time homebuyers—people who have not owned a home in the past three years. The programs cover different amounts, have different income limits, and work in different ways: some give you a grant (money you do not repay), some offer a second mortgage at low or zero interest, and some combine both.

The largest and most accessible is the MassHousing Down Payment Assistance Program, which pairs a first mortgage through MassHousing with a second mortgage that covers up to 10 percent of the purchase price. You repay the second mortgage over 30 years at a fixed rate. There is no separate application—if you get approved for the first mortgage, you are automatically considered for the down payment piece.

A second major route is the Community Development Block Grant (CDBG) programs run by individual cities and towns. These vary widely: some offer grants of $5,000 to $15,000, some offer forgivable loans (you do not repay if you stay in the home for a set period), and some have income limits as high as 120 percent of area median income. Your city or town housing authority or community development office administers its own program, so you must contact them directly to learn what they offer.

Key Takeaways

  • MassHousing's Down Payment Assistance Program is available statewide and automatically pairs with a first mortgage—you do not apply separately for the down payment help.
  • City and town CDBG programs offer grants or forgivable loans but vary by location; contact your local housing authority or community development office to learn what your town offers.
  • Most programs require you to be a first-time homebuyer, have a household income below a set limit (often 80 to 120 percent of area median income), and complete homebuyer education.
  • Down payment assistance does not reduce the price of the home or lower your first mortgage rate—it covers part of the down payment you would otherwise pay out of pocket.
  • Processing times range from two to eight weeks depending on the program and your lender's speed.

MassHousing Down Payment Assistance: how it works

When you apply for a mortgage through MassHousing, you automatically become a candidate for their down payment assistance. The program gives you a second mortgage—a loan secured by your home—that covers up to 10 percent of the purchase price. You repay this second mortgage over 30 years at a fixed interest rate that is set when you close. The rate is typically lower than a conventional second mortgage but higher than your first mortgage rate.

The income limit is 80 percent of area median income for your county. In 2024, that ranges from roughly $65,000 for a single person in some counties to $93,000 in others, depending on where you are buying. The purchase price limit also varies by county and is usually between $400,000 and $550,000. You must be a first-time homebuyer and complete a homebuyer education course—MassHousing maintains a list of approved providers on its website.

To start, contact a lender that works with MassHousing. Not all lenders do, so ask specifically. The lender will tell you whether you meet the income and purchase price limits for your county, then process both the first and second mortgage together. You will have one closing date and one set of closing costs, though you will sign separate promissory notes for each loan.

City and town CDBG programs: what varies and how to find yours

Every Massachusetts city and town that receives federal Community Development Block Grant funding can run its own down payment assistance program. This means the program in your town might be very different from the one in the next town over. Some towns offer grants of $5,000 to $10,000 with no repayment. Others offer forgivable loans—you borrow the money, but if you live in the home for five or ten years, the loan is forgiven and you owe nothing. Still others offer a combination: a grant plus a low-interest loan.

Income limits also vary. Some towns set the limit at 60 percent of area median income (stricter), others at 80 or 100 percent, and some as high as 120 percent (more lenient). A few towns have no income limit at all. The amount of assistance, the income threshold, and whether the program is currently open all depend on your specific city or town.

To find what your town offers, contact your local housing authority, community development office, or planning department. You can also call your town's main line and ask for the department that handles down payment assistance or first-time homebuyer programs. Many towns post their programs on their websites, but calling is faster if you need an answer quickly. Some towns run out of funding partway through the year and reopen the program the following year, so ask whether the fund is currently open.

Nonprofits and lender-specific programs

Several nonprofits in Massachusetts offer down payment assistance or work with lenders to provide it. The Homeownership Center (formerly the Massachusetts Homeownership Center) offers grants and counseling in some regions. NeighborWorks affiliates throughout the state provide homebuyer education and may know of local assistance. Some credit unions and community banks also offer down payment assistance to their members or to borrowers in specific towns.

These programs are smaller and more localized than MassHousing or CDBG, so they are worth researching if you live in a town with limited CDBG funding or if you want to explore additional options. Start by searching "[your town name] down payment assistance nonprofit" or asking your lender whether they have a partnership program.

Income limits, first-time homebuyer status, and other requirements

Most Massachusetts down payment assistance programs define a first-time homebuyer as someone who has not owned a home in the past three years. Some programs are stricter and require you to have never owned a home. A few allow people who own a home now but are buying a second property to may have access to if they will occupy the new home as their primary residence. Check the specific program's definition before you assume you are ineligible.

Income limits are based on area median income (AMI) for your county. If a program says "80 percent AMI," it means your household income cannot exceed 80 percent of what the median household in your county earns. These limits change yearly and vary by county, so a program in Boston may have a different income ceiling than one in Worcester. When you contact a program, ask for the current year's income limit for your household size.

Most programs also require you to complete a homebuyer education course before closing. These courses cover budgeting, credit, the mortgage process, and home maintenance. Many are offered online and take 4 to 8 hours. Some programs offer the course for free; others charge $50 to $150. A few programs waive the course requirement if you have already taken one within the past two years.

How down payment assistance affects your mortgage and closing

Down payment assistance reduces the amount of cash you need to bring to closing, but it does not change the price of the home or lower your first mortgage payment. If you are buying a $350,000 home and the program gives you $35,000 in assistance, you still owe $350,000 to the seller. The assistance simply means you borrow that $35,000 from the program instead of paying it out of pocket. You will have two monthly payments: one to your first lender and one to the down payment assistance lender (or none if it is a grant).

If the assistance is a loan, it appears on your credit report and counts toward your debt-to-income ratio. This can affect how much you can borrow for your first mortgage. For example, if a program gives you a $40,000 second mortgage with a $250 monthly payment, that $250 counts as debt when your lender calculates whether you can afford the first mortgage. Ask your lender to run the numbers before you commit to a program.

At closing, you will sign documents for both the first and second mortgage (if applicable). If the assistance is a grant, you will simply receive the money and sign a receipt. Processing time from application to closing typically ranges from four to eight weeks, depending on the program and your lender's workload.

What to do if you do not meet the income or purchase price limit

If your income is slightly above the limit for one program, check whether another program in your area has a higher threshold. CDBG programs in different towns can have different income ceilings, and some nonprofits have looser limits than MassHousing. You can also explore conventional down payment assistance from lenders—some banks and credit unions offer their own programs with higher income limits, though they typically require a larger down payment or charge a higher interest rate.

If the purchase price of the home you want exceeds the program limit, you have fewer options. Some CDBG programs have higher purchase price limits than others, so check your town first. If no program in your area covers the price, you may need to save for a larger down payment on your own or consider a less expensive home. A mortgage broker can also search for lenders that offer conventional down payment assistance without income or price restrictions, though these usually come with higher costs.

Frequently Asked Questions

Can I use down payment assistance if I already have an offer on a home?

Yes. In fact, you should apply as soon as you have an offer and a purchase price, because the program needs to know the exact amount to calculate your assistance. Some programs can move quickly—as little as two weeks—if your application is complete and your lender is responsive. Tell your seller's agent that you are using down payment assistance; most sellers accept this as long as your first mortgage is approved.

What happens if the down payment assistance is a forgivable loan and I sell the home before it is forgiven?

You will owe the remaining balance of the loan when you sell. If the loan was for $10,000 and forgives over ten years, and you sell after five years, you owe roughly $5,000 from your sale proceeds. Read the loan documents carefully to understand the forgiveness schedule and what happens if you move or refinance.

Do I have to use a specific lender to get down payment assistance?

For MassHousing, yes—your lender must be approved to work with MassHousing. For CDBG programs, it depends on the town. Some towns work with any lender; others have a list of preferred lenders. Ask your town's program administrator which lenders they work with, or ask your lender whether they are approved.

Can I combine down payment assistance from two different programs?

Sometimes. You can usually combine a MassHousing first mortgage with a CDBG grant from your town, because one is a first mortgage and one is a grant. You cannot usually combine two loans from the same category (two second mortgages, for example) because lenders worry about your ability to repay. Ask each program whether they allow stacking before you apply to both.

What if my town does not have a CDBG program or the fund is closed?

Check whether neighboring towns have programs you can access—some towns allow people who work in the town or have family there to apply. If not, focus on MassHousing and nonprofit programs. You can also ask your lender whether they offer in-house down payment assistance. If none of these work, you may need to save for a larger down payment or explore a less expensive home.