Mortgages

Finding the right type of loan

Conventional Loans

Conventional loans are the most common mortgages and are not backed by a government agency. Instead, lenders follow rules set by Fannie Mae and Freddie Mac. Loans that stay within those rules are called "conforming." They tend to offer the best long-term cost for buyers with solid credit and steady income.

Learn more: https://www.fanniemae.com and https://www.freddiemac.com

Minimum credit score	620 typical lender floor, with the best pricing at 740 and above
Minimum down payment	3% for first-time buyers, 5% for repeat buyers, 20% to skip PMI
Mortgage insurance	PMI required under 20% down, cancellable once you reach 20% equity
2026 loan limit	$832,750 baseline, up to $1,249,125 in high-cost counties
Eligibility Steady, documented income, usually two years of history Debt-to-income ratio generally up to 43% to 45% Works for primary homes, second homes, and investment properties Property stays within the conforming loan limit
Pros PMI comes off once you reach 20% equity, unlike FHA Flexible for many property types and uses Often the lowest total cost for strong-credit buyers	Cons Harder to qualify for than government-backed loans Best rates favor higher credit scores Repeat buyers need at least 5% down

Government-backed loans

FHA Loan

Insured by the Federal Housing Administration, FHA loans are built for buyers with lower credit scores or smaller down payments. They are more forgiving to qualify for, but the mortgage insurance usually stays for the life of the loan.

Learn more: https://www.hud.gov/program_offices/housing/sfh

Minimum credit score	580 with 3.5% down, or 500 to 579 with 10% down
Minimum down payment	3.5%
Mortgage insurance	Upfront premium of 1.75%, plus an annual premium that usually lasts the life of the loan at minimum down
2026 loan limit	Roughly $541,287 in lower-cost areas up to $1,249,125 in high-cost areas
Eligibility Primary residence only, move in within 60 days of closing Property must pass an FHA appraisal for safety and soundness Documented income and an acceptable debt-to-income ratio
Pros Low credit and down payment bar More flexible on past credit issues	Cons Mortgage insurance typically stays for the life of the loan Lower loan limits can rule out higher-priced homes Property must meet FHA condition standards

ONE Mortgage

Run by the Massachusetts Housing Partnership, ONE Mortgage is a subsidized loan for first-time buyers. Its standout feature is no private mortgage insurance, which can lower the monthly payment meaningfully compared to a conventional loan.

Learn more: https://www.mhp.net/one-mortgage

ONE+ adds up to $50,000 in down payment and closing cost help for current residents of 29 eligible communities, including Worcester.

Learn more: https://www.mhp.net/one-mortgage/programs-2/one-plus

Minimum credit score	640 for a single-family or condo, 660 for a 2- or 3-family
Minimum down payment	3% for a single-family, condo, or 2-family, with at least 1.5% from your own savings, and 5% for a 3-family
Mortgage insurance	None
2026 loan limit	No set loan-amount cap. Income limits vary by community, and household assets must stay under $100,000
Eligibility First-time buyer, meaning no ownership in the past three years Household income under the community limit Complete an approved homebuyer education class Live in the property as your primary residence Household assets under $100,000, excluding most retirement and college savings
Pros No PMI, which lowers the monthly payment by roughly 20% versus a conventional loan Discounted 30-year fixed rate with no points Post-purchase support through the HomeSafe program	Cons Limited to first-time buyers with an asset cap Income limits apply by community Higher down payment and credit bar for 3-family properties

MassHousing Mortgage

A state-supported loan through the Massachusetts Housing Finance Agency, aimed at first-time and moderate-to-middle-income buyers. You do not apply with MassHousing directly; you work through an approved local lender.

Learn more: https://www.masshousing.com/home-ownership/homebuyers

Minimum credit score	640 to 700 depending on loan and property type
Minimum down payment	As low as 3%
Mortgage insurance	Available through MassHousing, with the MI Plus benefit that can cover payments for up to six months after a job loss
2026 loan limit	Income and purchase-price limits vary by community, reaching up to 135% of area median income in some areas
Eligibility Buy a single-family home, condo, or 2- to 4-family property as a primary residence Income within the limit for the property's community Homebuyer education often required Available in every city and town in Massachusetts Down payment assistance of up to $30,000 may be available, confirm current terms
Pros Down payment assistance available statewide MI Plus benefit can cover payments for up to six months if you lose your job Competitive fixed rates through approved lenders	Cons Income and purchase-price limits apply Assistance terms and amounts change over time Must go through a participating lender

VA Loan

Guaranteed by the Department of Veterans Affairs, VA loans are one of the strongest options available to those who qualify: no down payment and no monthly mortgage insurance.

Learn more: https://www.va.gov/housing-assistance/home-loans/

Minimum credit score	No VA-set minimum, though lenders often want around 620
Minimum down payment	0% with full entitlement
Mortgage insurance	None. A one-time funding fee of 1.25% to 3.3% applies instead
2026 loan limit	None with full entitlement
Eligibility Eligible service members, veterans, and some surviving spouses Certificate of Eligibility from the VA Primary residence, property must pass a VA appraisal Funding fee waived for veterans receiving disability compensation, Purple Heart recipients, and certain surviving spouses
Pros No down payment and no monthly mortgage insurance Typically among the lowest rates available No loan limit with full entitlement	Cons Limited to eligible military borrowers The funding fee is a real upfront cost, though it can be financed Property must meet VA condition standards

USDA Loan

Backed by the U.S. Department of Agriculture, USDA loans offer zero down for homes in eligible rural and many suburban areas. Despite the "rural" label, a good share of central Massachusetts towns qualify, so it is worth checking the map.

Learn more: https://www.rd.usda.gov/programs-services/single-family-housing-programs

Minimum credit score	640 for streamlined approval, 620 possible with manual underwriting
Minimum down payment	0%
Mortgage insurance	A 1% upfront guarantee fee plus a 0.35% annual fee
2026 loan limit	No set loan limit. Household income is capped at 115% of the area median
Eligibility Property in a USDA-eligible area, confirmed on the USDA map Single-family primary residence Household income within the county limit for your household size Debt-to-income guidelines around 29% housing and 41% total
Pros No down payment Lower fees than FHA for eligible buyers	Cons Location and income limits are strict Primary residence only, no investment or second homes Slightly longer closing timeline due to USDA review

Other types of loans

Conventional 97, HomeReady, and Home Possible

These are low-down-payment versions of the conventional loan, all allowing 3% down. Conventional 97 has no income cap. HomeReady (Fannie Mae) and Home Possible (Freddie Mac) add income limits, usually tied to 80% of the area median income, in exchange for reduced PMI costs. All require you to live in the home.

Minimum credit score	620
Minimum down payment	3%
Mortgage insurance	PMI required, reduced on the income-based HomeReady and Home Possible options
2026 loan limit	$832,750 baseline, up to $1,249,125 in high-cost counties
Eligibility Conventional 97 has no income cap HomeReady and Home Possible cap income around 80% of the area median Primary residence only Homebuyer education may be required
Pros Only 3% down with conventional-loan flexibility Reduced PMI on the income-based versions A strong fit for first-time and moderate-income buyers	Cons HomeReady and Home Possible carry income limits Homebuyer education may be required Primary residence only

Jumbo Loans

A jumbo loan is any mortgage above the conforming limit, meaning over $832,750 in most Massachusetts counties in 2026. Because these loans are too large for Fannie Mae or Freddie Mac to buy, lenders carry more risk and set tougher requirements.

Minimum credit score	Typically 700 and above
Minimum down payment	Often more than 10%, sometimes 20%
Mortgage insurance	Varies by lender
2026 loan limit	None. This is the above-conforming category, over $832,750 in most Massachusetts counties
Eligibility Strong credit with a debt-to-income ratio usually at or under 45%, cash reserves often of six or more months of payments, and full income and asset documentation.
Pros It finances higher-priced homes in a single loan and offers competitive rates for well-qualified buyers.	Cons It carries steeper credit, down payment, and reserve requirements, with more documentation and stricter underwriting.