Closing Cost and Down Payment Assistance with MassDREAMS

As of 11/30/2022, the MassDREAMS program has been discontinued. Please contact a loan expert to determine whether you qualify for any other down payment assistance programs.

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MassHousing, an agency that provides financing for affordable housing in Massachusetts, and the Massachusetts Housing Partnership have come together to launch an initiative called MassDREAMS. This initiative delivers financial assistance in the form of grants to low- and moderate-income homebuyers, helping them reach their goals even in a down economy.

MassDREAMS, which stands for Delivering Real Equity and Mortgage Stability, provides down payment and closing cost assistance through grants to first-time homebuyers in Massachusetts. Properties must be located in select communities with economies that were hit hardest by the pandemic. 

Only homebuyers who are accessing a MassHousing loan or the Massachusetts Housing Partnership (MHP) first mortgage loan are eligible for grants. The grant funds do not need to be repaid and can be directed toward a down payment or closing costs, making the homebuying process more affordable to residents who need it the most. 

This perk is being made available thanks to federal funding via the American Rescue Plan Act of 2021, a piece of legislation that delivers relief to U.S. states affected by COVID-19 economic fallout. 

In Massachusetts, this means first-time homebuyers can receive up to $50,000 in grants for properties located across 29 qualifying cities that were hardest hit by the pandemic. These towns include: 

• Attleboro 
• Barnstable 
• Boston
• Brockton 
• Chelsea 
• Chicopee 
• Everett 
• Fall River 
• Fitchburg 
• Framingham 
• Haverhill 
• Holyoke 
• Lawrence 
• Leominster 
• Lowell 
• Lynn 
• Malden 
• Methuen 
• New Bedford 
• Peabody 
• Pittsfield 
• Quincy 
• Randolph 
• Revere 
• Salem 
• Springfield 
• Taunton 
• Westfield
• Worcester

MassDREAMS Details

Eligible homebuyers can qualify for grants depending primarily on the average median income (AMI) of their area. In Massachusetts, the AMI differs depending on the county where the property is located. For instance, Berkshire County’s AMI is $117,855 while Essex County’s is higher at $179,955. 

• Homebuyers who earn a maximum of 100 percent of their AMI could qualify for a grant of as much as $50,000.
• Homebuyers who earn between 100.01 percent and 135 percent of their AMI could qualify for a grant of up to $35,000. 
• The funds, which come in the form of a grant, translate to 5 percent of the property’s purchase price as well as relevant closing cost assistance. 
• The grant money may also be used toward eligible insurance subsidies. 

Affordable Mortgage Products to Pair with MassDREAMS

Considering that the MassDREAMS grant must be paired with a state-sponsored mortgage program, we thought it would be helpful to learn more about the loan products available to you. 

• The ONE Mortgage Loan: offered by the MHP and meant for first-time homebuyers in the low-to-moderate-income categories. It has a discounted 30-year fixed interest rate and a low down payment requirement of at least three percent of the property purchase price (five percent for three-family residences). There’s also no Private Mortgage Insurance (PMI) requirement, which saves homebuyers more money on closing costs. 
• The One+ Boston Loan: meant for eligible first-time homebuyers in the city of Boston. It includes a “heavily discounted” fixed 30-year interest rate as well as further homebuyer assistance provided by the city of Boston. There’s no PMI requirement and eligible residents may qualify for more financial help. To qualify for this loan, you’ll need to prove your residence in the city and also complete a homebuyer class. Your income must fall below pre-established limits, which depend on your household size. Your total household assets should not exceed $75,000. 
• MassHousing Loan: offered to homebuyers in Massachusetts and delivers about $700 million annually. Features of this loan include down payment help of up to $30,000 and even $50,000 in some cases. In addition to first-time homebuyers, repeat borrowers may also qualify. These loans have a competitive 30-year fixed mortgage rate with no option for adjustable rates. 

MassHousing loans also offer job-loss protection, granting eligible individuals up to $2,000 per month for principal and interest payments for up to half a year. There is no additional cost to borrowers on loans that are insured by MassHousing. MassHousing also offers an intertwined purchase and renovation loan which can be used to both finance the deal and account for any repairs the property may need. 

Total Mortgage is among the lenders to have partnered with MassHousing for these mortgage loan products. Reach out to one of our mortgage experts today to learn more about these programs.  

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How to Qualify for a MassDREAMS Grant

To qualify for a MassDREAMS grant, prospective homebuyers should meet certain criteria. First and foremost, you should be a first-time homebuyer and live in one of the 29 Massachusetts towns listed above - all of which were hit especially hard by the health crisis.

In addition, you should purchase a single-family home, condominium, or even a multi-family home of up to four families. However, the property should serve as your primary place of residence. Also, you should meet the income standards that are associated with each given jurisdiction.

To qualify, residents must complete a homebuyer education course that is approved by MassHousing. MassDreams also offers a pre-screening process so that you can know sooner than later whether you will be eligible for the grant funds. You can access that questionnaire here. 

If you meet these early qualifications, you will receive a letter letting you know. 

Total Mortgage and MassDREAMS 

MassDREAMs has partnered with a number of lenders to help facilitate the grants throughout Massachusetts, including Total Mortgage. Contact Total Mortgage today for access to the expert advice of our mortgage bankers at offices across Massachusetts. They will help you learn whether you qualify for a MassDREAMS grant and can support you through the home-buying process.