Massachusetts Real Estate


Massachusetts introduces 1st time buyers 8k tax credit program for down payments

1st time home buyersAt this point almost everyone knows that as part of the housing stimulus program the federal government has given 1st time home buyers a tax credit of up to $8000 for the purchase of an owner occupied home or condominium.

This tax credit has been part of the American Recovery and re-investment act.

Massachusetts however, has just introduced a 1st time buyers tax credit program that can be applied to a down payment and closing costs!

Massachusetts joins a growing number of states that allow the tax credit to be used toward the buyers down payment on the home rather than waiting till they file their 2009 taxes.

The program was introducing in a joint effort between The Massachusetts Association of Realtors (MAR) and Mass Housing. Below is a detailed description of what 1st time home buyers need to know about the program.

How it works

  1. Home buyers who are using a MassHousing first mortgage loan to purchase their first home apply for the Tax Credit Loan program through their lender.
  2. The Tax Credit Loan is used to cover closing costs or as part of the down payment.
  3. In 2010, the home buyer claims the $8,000 tax credit on their 2009 federal tax return.
  4. The home buyer then repays the MassHousing tax credit loan.
    • No interest is charged if the Tax Credit Loan is repaid by June 1, 2010.
    • Otherwise, the Tax Credit Loan is amortized over the next 10 years, at the same interest rate as the first mortgage.


To qualify for the Home buyer Tax Credit Loan Program, you must

  • Be a first-time home buyer using a MassHousing mortgage.
  • Meet income limits and purchase price guidelines
  • Purchase a one- to four-family home by November 30, 2009.
  • Use the property as your primary residence for the life of the mortgage.

Other Information

  • The Tax Credit Loan may be used for down payment and closing costs.
  • Principal and interest payments on the Tax Credit Loan are deferred until June 1, 2010.
  • There is a $300 application fee. If the tax credit loan is repaid by June 1, 2010, the borrower will receive a $300 credit toward the principal of their first mortgage.
  • Maximum tax credit loan amount is $8,000 or 10% of the home's purchase price, whichever is less.

A recent study from the National Association of Realtors found that 82% of all 1st time home buyers believe that their biggest obstacle to purchasing their 1st home is coming up with a down payment. This 1st time buyers program is designed to relieve this issue in order to create more buying opportunities.

MassHousing’s home loans feature safe and affordable fixed rates and include unique benefits such as MassHousing’s MI Plus™ mortgage insurance, which will help pay the borrower’s monthly principal and interest payments for up to six months in the event of a job loss.

Mass Housing mortgages offer competitive interest rates, low- and no down payment options, and discounted rates for lower-income borrowers. As a buyer you should check with your lender to make sure they are offering this program. It should be noted that not all lenders are involved with MassHousing loans.

I commend Governor Deval Patrick and others involved with this program as it should open up additional buying opportunities and increase 1st time buyer involvement in the Massachusetts Real Estate market.

One important note that must be mentioned is that the buyer must still have a minimum of 3.5% of their own funds! The tax credit can be used in addition to the 3.5% down payment but can NOT be used to make up any part of the 3.5%.

If you are not going to buy a home using the latest Masshousing loan, the chart below summarizes the current Federal 1st time home buyers 8k tax credit program. Remember a 1st time home buyer is considered someone who has not owned a home in the last three years.

One of the best resources that I have seen on the new 1st time buyers tax credit comes from The National Association of Home Builders website. It is located here at the frequequently asked questions about the home buyer tax credit.

1st time home buyers tax credit





About the Author: The above Real Estate information on 1st time home buyer tax credits was provided byRE/MAX Executive Realty Hopkinton Mass Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at or by phone at 508-435-5356.

Thinking of buying your 1st home in Metrowest Mass? I have a passion for Real Estate and love to share my Real Estate expertise!

For Metrowest Massachusetts Real Estate and homes see Metrowest MA Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.

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Building lasting relationships by helping people move in and out of Metrowest Massachusetts for the last 23 years.

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comment balloon 33 commentsBill Gassett • July 20 2009 07:01AM


Great news Bill! Here in Raleigh they can use that tax credit as a down payment as well.  If I'm not mistaken can't that 3.5% down payment also come from a loan from a family member or even an employer?  First time home buyers couldn't find a better REALTOR® in MetroWest Mass than you - they'll be in good hands.

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) over 10 years ago

Bill--What a great program! I know many first time buyers in MN now struggling to pull together the funds for a down payment. Strong buyers but are just a bit shy of the required downpayment. You explain the new system very well...Hope many first time buyers head your way for more expert advice!

Posted by Teri Eckholm, REALTOR Serving Mpls/St Paul North & East Metro (Boardman Realty) over 10 years ago

Pam - If I am not mistaken the 3.5% needs to be the buyers own funds. I have not heard that the down payment could come from a family member or employee.

Teri - This new 1st time buyer down payment program should help a few buyers get into a home or condo. I appreciate the compliments on the article.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

That was a smart move from MA!!!

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Trinity Northeast Ohio Real Estate Specialist) over 10 years ago





What a great opportunity for homebuyers to help in the purchase of a home!  Hopefully this type of information will help them to understand it and take advantage of it!










Posted by Debbie Hutchins over 10 years ago

I have my first one of these closing in NJ in a few weeks. (Found it on ActiveRain ...) In my case it is someone that has money, but is electing to do this just to keep more money in their pockets - and I would agree with that mentality.

Posted by Stephen Kappre, Helping You Home (KW Hometown) over 10 years ago

Chock full of information! Love it. You are THE MAN Bill, and you stand out in your field.

Posted by Susie Blackmon, Ocala, Horses, Western Wear, Horse Farms, Marketing over 10 years ago

Bill, This is a great move by your state of Mass, good to know they are taking a bold step in helping to get new buyers into the market. Your post is full of useful information for all types of buyers.

Posted by South Austin Real Estate Blog (Sky Realty South Austin) over 10 years ago

Maryland does not have the funds on any level to facilitate this program by December.

Posted by Linda Greco Rich, ABR, SRES, Harford County Specialist (Exit Preferred Realty) over 10 years ago

Bill - Kentucky implemented a similar program a few months ago.  The primary difference is that the funds can be used towards the 3.5% down payment. 

Posted by Erik Hitzelberger, Louisville - Middletown Real Estate (RE/MAX Alliance - Louisville REALTOR-Luxury Homes) over 10 years ago

Hi Bill...This help stimulate your Business...Go Bill Go.

Great Post, have a great week!

Posted by Fred Carver Personal Real Estate Corporation, Accredited Real Estate Consultant (RE/MAX Camosun Victoria BC Real Estate) over 10 years ago

Bill this is a good deal especially since they can get the money interest free if they pay it back before June 1, 2010.

Erik, and Lee & Pamela you should check on being able to use the $8,000 towards the 3.5% downpayment, because that would be in violation of FHA Guidelines, and states can not over ride those guidelines.  However, it is still a great benefit to be able to get it ahead of time, and being able to use it toward Closing Costs.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 10 years ago

Hi Bill, great post and a very smart move on Massachusett's program.  I am sure you will be busier than ever.

Posted by Rebecca Gaujot, RealtorĀ®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) over 10 years ago

Hi Bill!

I wish our state would do something like this to help get the tax credit before next year. The fact they are giving it to your buyers with no interest is awesome! :) 


Posted by Lisa Udy, Logan Utah Realtor ( Platinum Real Estate Group) over 10 years ago

George - I was wondering about Erik's comment as well. I did not think it was possible and am glad you have confirmed the same.

Everyone - thanks for all your comments on Massachusetts 1st time buyer tax credits that can be used toward a down payment!

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

Bill, Wouldn't it have been nice if they put this program in place in the beginning?  Either way, I'm glad to hear it's there now and I'm sure people will take advantage of it.  It would be nice if the other states followed suit.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 10 years ago

Bill :

Programs like this helps to keep us going and rolling. I hope the Federal Government extend it to the end of 2010.


Posted by Richard Stabile, Bergen County New Homes Builder Realtor (Re/Max Real Estate Limited) over 10 years ago

'Looks like Massachusetts is at the forefront with this program.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) over 10 years ago

George, Bill - I went down this path when the Ky legislation was first passed.  We confirmed it was acceptable for a government entity to offer a second lien and the funds to be used towards the 3.5% requirement.  I think there is a Mortgagee letter that offered some clarification, but I cannot find it. 

Posted by Erik Hitzelberger, Louisville - Middletown Real Estate (RE/MAX Alliance - Louisville REALTOR-Luxury Homes) over 10 years ago

Erik, when that option was first introduced that was the case, but within the same day of coming out with the Mortgagee Letter stating that you could do that, they pulled it because it violated FHA Guidelines.  The new Mortgagee Letter clearly states that the $8,000 can be used in addition to the 3.5%, but not as a part of the 3.5%.  The reason why you can't find the Mortgagee Letter is because they pulled it and it no longer exists.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 10 years ago

If you can't pull together a down payment on your own, you shouldn't be buying.  I am disheartened by the ever increasing government subsidization of the real estate industry.  It is unfair to renters, it is unfair to our children for whom this will prop up still unaffordable prices, it is unfair to those who do not qualify for the credit, and it is unfair to taxpayers in general.

Posted by David over 10 years ago

George - After reading Erik's comment I thought he may have missed the whole hoopla of the announcement and then subsequent retraction of this use of the money towards the 3.5%. I guess that is the case.

David - I agree with you 100% about a buyer should have to come up with their own funds. Part of the whole collapse in the Real Estate industry was due to loose lending practices. As it stands right now a buyer in this program MUST have 3.5% of their own money in order to qualify.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) over 10 years ago

Great Report Bill, your State like the Feds and other States recognizes the positive economic energy that home owners provide to our communities and nation.  That "first-time" purchasing experience can often times seem like a huge hurdle, especially during a period of economic recovery.  The first home I purchased was at a time when interest rates were finally coming down, and adjustable rate mortgages first appeared I got an ARM at a teaser rate of 8.25%!!! John

Posted by Alexander- Slocum, Realty Team- Vancouver WA Real Estate (Premiere Property Group, LLC - Vancouver Washington) over 10 years ago

Bill - This is great for you and your market. Ma. is doing a great thing for you. I know the fed program has helped out many of my own customers so far this year and kept me alive on a personal basis.

Great report. Go get em Bill

Posted by Robert Hammerstein, Bergen County NJ Real Estate (Keller Williams Valley Realty) over 10 years ago

Hi Bill!!  Haven't been around in a while but I wanted to tell you, Great Post!  There sure are a lot things you can't use it for though!

Posted by Tami Vroma, Realtor, Grand Rapids MI Real Estate (West Michigan Real Estate Specialist-Five Star Real Estate) over 10 years ago

Bill - This is a smarkt move on Massachusettes part.  I hope you will see an increase in home sales as a result.

Posted by Pam Dent, REALTORĀ® - Charlottesville Virginia Homes / Horse (Gayle Harvey Real Estate, Inc.) over 10 years ago

Hi Bill, This sounds like great news for first time homebuyers in Massachusetts.  This should get people off the fence and into your office. :o)

Posted by Shirley Parks, Broker, 210-414-0966, San Antonio TX Real Estate (Sands Realty 210-414-0966) over 10 years ago

Bill  Not here in Virginia yet, but it sounds like a great boost in the federal program Karen

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) over 10 years ago

Missouri is offering additional funds to help homeowners purchase this year.  To help rid the number of foreclosures we have, they offer $15,000 if they qualify to buy a foreclosure using MHDC financing.  However, many bank owned properties can not be financed this way without repairs.  Kind of a two sided sword.

Posted by Kay Van Kampen, RealtorĀ®, Springfield Mo Real Estate (RE/MAX Broker, RE/MAX) over 10 years ago

Hi Bill, This a wonderful post and very informative. I would think this type of post is very useful for any of your Buyers and of course 1st time Buyers since it was directed there. An excellent format and so well done!

Posted by William Johnson, Retired Real Estate Professional (Retired) about 10 years ago


Now all you need is a great mortgage person in MA to work with. I am finding that other top agents are concerned with working with one lender shops. Again the value that a Mortgage Broker may bring you over your one lender options.

Great post as always. Take care .

Posted by ed about 10 years ago

Awesome Bill .. very similar here in The Woodlands (Houston) Texas

Posted by Pippa Mac, The Woodlands TX Real Estate (Chevaux Group Realtor, The Woodlands and Spring) about 10 years ago

Ed I work with one of the best mortgage lenders in the business.

Pippa - Thanks for the compliments about the 1st time buyer program.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) about 10 years ago

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