The nation's housing crisis has hit especially hard in states where real estate prices were highly inflated prior to the 2008 housing crash. One of those states is Massachusetts, where first time home buyers have several options available for assistance. Such assistance may come in the form of grants or low interest loans to pay for closing costs and down payment, or low-interest mortgages offered in conjunction with local banks and other lending institutions. First time home buyers assistance programs in Massachusetts are administered by the state's Executive Office of Housing and Economic Development (EOHED), through an agency known as MassHousing.
MassHousing
MassHousing is a state entity formed by the Massachusetts Legislature in 1966. The independent public authority is charged with the mission of providing financial assistance not only to eligible homeowners, but also to builders committed to constructing affordable housing in the state. To date MassHousing has disbursed more than $13 billion in funds and is considered one of the leading such agencies in the country. MassHousing currently provides assistance to first time home buyers through low interest loans and mortgage insurance.
MassHousing Loan
The MassHousing Loan program is available to all Massachusetts home buyers based upon income eligibility requirements. The loans feature a 30-year, fixed interest rate that is lower than the rate charged for a standard loan. The loan also offers lower down payment options, liberal income eligibility requirements, and payment protection in case the homeowner is unemployed or on extended leave at anytime during the mortgage term. These loans are administered by MassHousing but offered through local lenders.
Buy Cities
MassHousing administers another program aimed at selling properties in certain designated cities. Known as Buy Cities, this program provides low interest loans that can cover as much as 100% of the cost of the home. Loan products under this program are 30-year, fixed-rate mortgages with no points. Applicants must meet income eligibility requirements, have a good credit score, and must have a total monthly debt ratio of no more than 45%.
DHCD Down Payment Assistance Program
The Massachusetts Department of Housing and Community Development (DHCD) offers assistance to eligible first time home buyers in the form of down payment and closing cost grants. There are income restrictions that apply. The program is offered in conjunction with local municipalities and nonprofit organizations as the funds are available. Because the various municipalities and organizations have different requirements, it is not possible to provide additional information about this program. The EOHED website makes available a list of participating municipalities along with contact information.
Other Programs
Other programs may be available in the state of Massachusetts on a limited basis. Such programs may be funded through HUD grants, nonprofit organizations, and special state or county programs. Your mortgage lender or real estate broker should have information about programs currently available in your area. The HUD website also lists such programs from time to time. Below is a partial list of programs listed as active in Massachusetts:
- Cambridge Purchaser Assist Program (PAP)
- Infill Housing Homeownership Program (IHHP)
- Lawrence Down Payment Loan Program (DPL)
- Lowell Coalition For A Better Acre HOME Homeowner Acquisition Loan Program (HHALP)
- Multi-Communities, Quincy Community Action Programs, Inc. Down Payment Assistance Program
- New Bedford Neighborhoods First Time Homebuyer Program
- Plymouth Buyers Assistance Program (FTHB)
- Salem First Time Homebuyer Program (FTHB)
- Taunton First Time Home Buyer Program (FTHB)