Why Most North Shore Buyers Leave Money on the Table

In my 20 years helping North Shore buyers, the single most common thing I hear is: "I did not know these programs existed." And it is true — Massachusetts has some of the most generous first-time home buyer programs in the country, but they are not advertised, and most lenders do not volunteer the information unless you ask.

If you are buying a home in Essex County — whether it is a condo in Beverly, a colonial in Peabody, or a starter home in Haverhill — you may qualify for down payment assistance, reduced mortgage insurance, below-market interest rates, or a combination of all three. The savings can be tens of thousands of dollars over the life of your loan.

Here is the complete 2026 guide to every major first-time home buyer program available on the North Shore.

Who Counts as a First-Time Home Buyer in Massachusetts?

This is the first surprise: you do not have to be buying your very first home. Massachusetts defines a first-time home buyer as someone who has not owned a primary residence in the past three years. If you owned a home five years ago, sold it, and have been renting since — you qualify as a first-time buyer.

There is one additional rule: the home you purchase must be your primary residence. You cannot use these programs to buy an investment property or a second home. You must intend to live in the home.

Program 1: MassHousing

MassHousing is a quasi-public state agency that provides mortgage loans to first-time and repeat home buyers in Massachusetts. It is not a direct lender — it works through a network of approved lenders across the state. MassHousing offers several products, but the two most relevant for North Shore buyers are:

The down payment assistance is the headline feature. It is structured as a 0% interest, 15-year forgivable second mortgage. Each year you live in the home, one-fifteenth of the assistance is forgiven. If you stay for 15 years, the entire amount is forgiven — it effectively becomes a grant. If you sell or refinance before 15 years, you repay the prorated remaining balance.

MassHousing also offers MI Plus — mortgage insurance that includes job-loss protection. If you lose your job, MassHousing covers your mortgage payments for up to six months while you get back on your feet. No other mortgage insurance product in Massachusetts offers this.

Program 2: ONE Mortgage

ONE Mortgage was created by the Massachusetts Affordable Housing Alliance (MAHA) in partnership with participating lenders. It is specifically designed for low-to-moderate-income first-time buyers and offers one of the most affordable paths to homeownership in the state.

Here is how it works:

• You put down 3% of the purchase price (minimum $1,000 of your own funds).
• The first mortgage is a conventional 30-year fixed-rate loan at a competitive rate.
• A subsidized second mortgage covers an additional portion, reducing your effective loan amount and monthly payment.
• No PMI — the program structure eliminates the need for private mortgage insurance entirely.
• Income limits apply and vary by municipality and household size.

The elimination of PMI is significant. On a $500,000 loan, PMI typically costs $150 to $300 per month. Over the life of a loan, that is $54,000 to $108,000 in savings compared to a conventional loan with PMI. For buyers trying to qualify based on monthly debt-to-income ratios, removing PMI from the equation can make the difference between qualifying and not qualifying.

Program 3: MHP SoftSecond (Now SoftSecond/ONE)

The Massachusetts Housing Partnership (MHP) originally created the SoftSecond program, which has since evolved and merged with elements of the ONE Mortgage program. It remains available through participating lenders and offers similar benefits: a subsidized second mortgage to reduce monthly payments, no PMI, and affordable fixed rates.

For most North Shore buyers, ONE Mortgage and MHP's current offerings overlap significantly. Your lender can help you determine which program gives you the best terms based on your income, purchase price, and the specific municipality where you are buying.

Program 4: Federal Programs Available on the North Shore

In addition to state programs, several federal loan programs are available to North Shore buyers. These are not exclusive to first-time buyers, but they are especially valuable for first-time buyers who have limited down payment funds.

Income and Purchase Price Limits on the North Shore

State programs use income limits based on Area Median Income (AMI), which is set by HUD and varies by region. In Essex County, the AMI is relatively high compared to national averages — which means the income limits for these programs are also higher than you might expect.

Key things to know:

• Income limits are based on household size — a household of four has a higher limit than a single buyer.
• Purchase price caps vary by municipality and property type (single-family vs. condo vs. multifamily).
• Some North Shore towns have higher limits because they are designated as high-cost areas.
• Limits are updated annually, so always check the current numbers with a participating lender.

The Home Buyer Education Requirement

Nearly every first-time buyer program in Massachusetts requires completion of a home buyer education course from a HUD-approved counseling agency. This is not a formality — it is a requirement, and you cannot close without the certificate.

The course covers budgeting, credit, the mortgage process, inspection basics, and closing. It is available online or in person, typically takes 6 to 8 hours, and costs $50 to $150. Some programs waive the fee for income-eligible buyers. I recommend completing this before you start house hunting — the certificate is valid for 12 to 24 months depending on the program.

How to Choose the Right Program

The right program depends on your income, credit score, down payment savings, and the town where you are buying. Here is a quick framework:

If you are not sure which program fits, the best first step is to talk to a lender who participates in all of these programs — not just one. A lender who only offers conventional loans will not tell you about ONE Mortgage. A lender who only does FHA will not tell you about MassHousing's down payment assistance. For a list of vetted lenders I trust on the North Shore, visit my preferred lenders page.

Common Mistakes First-Time Buyers Make with These Programs

1. Waiting too long to apply. Some programs have funding cycles or waitlists. Start the conversation with a lender before you start house hunting.
2. Assuming you earn too much. Essex County limits are higher than most of the state. Check before disqualifying yourself.
3. Not completing the education course early. The certificate takes time and is required to close. Do it before you are under contract.
4. Using only one lender. Different lenders offer different programs. Get quotes from at least two — one that offers state programs and one that offers conventional.
5. Forgetting about closing costs. Down payment assistance does not cover closing costs. Budget separately for those. Read our closing costs guide for details.

Kathleen's Take

I have had buyers who were about to give up on buying a home because they did not have 20% down — and then we found a program that gave them $15,000 in down payment assistance and eliminated their PMI. Their monthly payment dropped by $400. These programs are real, they are available on the North Shore, and they are underused. The key is working with a lender who knows all of them — not just the one that pays them the most. Start with the education course, then talk to two lenders. If you want recommendations, I keep a short list of lenders I trust on my preferred lenders page.