Massachusetts First-Time Buyers: $25,000 Interest-Free Downpayment Aid Ends July 31. Here's How to Lock In.

Massachusetts Governor Maura Healey and MassHousing announced April 28, 2026, that the state has expanded its downpayment assistance program to offer up to $25,000 in interest-free loans to eligible first-time homebuyers.^[1] The expanded assistance is available to buyers who lock in a MassHousing mortgage between April 27 and July 31, 2026.^[1][6]

The program replaces a previous version that charged 2 to 3 percent interest on 15-year second mortgages.^[1] The new assistance carries 0 percent interest with deferred repayment, meaning buyers do not make monthly payments on the $25,000 until they sell, refinance, or pay off their primary mortgage.^[1]

Who Qualifies

To receive the $25,000, applicants must meet three core requirements.^[1][4][6]

First, they must be first-time homebuyers who have not owned a home in the last three years.^[4] Second, their household income must not exceed 135 percent of area median income for their region: $205,335 in eastern Massachusetts, $165,645 in Worcester County, $137,565 in the Berkshires, and $129,870 in Hampden County.^[1] Third, they must use a MassHousing mortgage originated through one of the agency's more than 80 lending partners across the state.^[5]

MassHousing loans require a minimum 3 percent down payment for single-family homes, condos, and two-family properties, and 5 percent for three-family properties.^[4] Credit score minimums are 640 for single-family homes and condos, and 660 for two-family or three-family homes.^[4] Applicants must also have less than $75,000 in total household assets, excluding most retirement and college savings accounts.^[4]

What Changed From the Old Program

Before the Healey-Driscoll Administration's $25 million investment announced in January 2026, MassHousing offered up to $25,000 in downpayment assistance structured as a 15-year second mortgage with interest rates of 2 to 3 percent depending on household income.^[1] Under that structure, buyers paid monthly installments on the assistance loan alongside their primary mortgage.

The expanded program eliminates interest entirely and defers all repayment until the primary mortgage ends.^[1] MassHousing estimates that four out of five MassHousing mortgages since 2023 have been supported by downpayment assistance, making this a central tool for most buyers using the agency.^[1]

Governor Healey announced the $25 million expansion in her January 22, 2026 State of the Commonwealth Address, stating the investment would help 1,000 more middle-income households purchase a first home over the following year, nearly double the number served the prior year.^[2] She also committed to lowering MassHousing mortgage rates by 0.55 percent for all eligible buyers, a measure expected to save the average homebuyer more than $42,000 over the lifetime of their mortgage.^[2]

How the Process Works

MassHousing does not lend directly to consumers. The agency works through a network of more than 80 approved lenders statewide.^[5] Prospective buyers must apply through one of these partner lenders and request a MassHousing mortgage.^[5] The lender determines eligibility for both the primary mortgage and the downpayment assistance.^[5] After closing, MassHousing purchases the loan from the originating lender, and the buyer makes monthly payments to MassHousing.^[5]

Downpayment assistance funds can be applied to the down payment, closing costs, permanent interest rate buydowns, or upfront mortgage insurance premiums.^[6]

What This Means for You

The structure of this program reflects a real shift in who Massachusetts is trying to reach. The income ceiling of 135 percent of area median income captures households well above what many traditional first-time buyer programs cover. A teacher, nurse, or software engineer in eastern Massachusetts earning up to $205,335 for a household of one or two could qualify. That is a deliberate expansion of the middle class into homeownership assistance.

The deferred-repayment structure is also meaningfully different from the prior loan. Buyers are not taking on an additional monthly payment during the years they are building equity and paying down their primary mortgage. The $25,000 stays invisible on their budget until they exit the property. That removes a friction point that caused some buyers to shy away from the older program.

The July 31, 2026 lock-in deadline is the critical variable. The assistance is not a permanent program change; it is a funded expansion with an expiration date. Every day a buyer waits is a day closer to a closed window.

Action steps:

1. Check your county income limit at masshousing.com to confirm your household falls at or below 135 percent of area median income for your region.^[1]

2. Pull your credit report and confirm your score meets the 640 minimum for a single-family home or condo, or 660 for a two-family or three-family property.^[4] If it is close, address any errors or collections before applying.

3. Verify your asset total stays below $75,000 excluding retirement and college savings accounts, per MassHousing eligibility rules.^[4]

4. Contact a MassHousing partner lender from the agency's network of more than 80 lenders and ask specifically about MassHousing mortgage options and the $25,000 assistance.^[5] Do this before July 15, 2026 to leave buffer time for underwriting and closing before the July 31 lock-in deadline.

5. Ask the lender whether the $25,000 can be applied as a permanent interest rate buydown, which would lower your monthly payment in addition to covering closing costs. Compare the long-term savings from a buydown against using the funds as a pure down payment credit.^[6]

The deadline is firm. The money is interest-free. The eligibility window is wider than it has ever been.