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Updated on Wednesday, April 3, 2019
If you’re thinking of buying your first home in the State of Massachusetts, you’re in good company. First-time buyers made up 40% of all home sales in the Bay State in 2018 — well above the national average of 33%, according to the National Association of Realtors.
Massachusetts homes are selling like hotcakes, even with median home prices rising. In February 2019, the Massachusetts Association of Realtors reported the state had hit its 12th straight month of year-over-year increases in single-family home and condominium sales.
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How can you afford a home in this environment? One option might be to get a loan backed by the Federal Housing Administration (FHA). They generally come with lower interest rates and down payment requirements, and yet are easier to qualify for, even with a less-than-stellar credit score.
In 2018, 1.4% of all of these loans used by homebuyers in the United States were scored by Massachusetts buyers, according to the U.S. Department of Housing and Urban Development. And this year FHA loan limits have climbed, offering qualified buyers from Boston to the Berkshires even more money to buy a home.
Depending on where you live in the state, if you qualify for one of these government-backed loans, you may be able to borrow anywhere from $314,827 to $726,525 for a single family home.
Massachusetts FHA loan limits by county
|County Name||One-Family||Two-Family||Three-Family||Four-Family||Median Sale Price|
How are FHA loan limits calculated?
The Massachusetts loan limits from the FHA are determined the same way as other states: The federal government looks at median home prices, then uses those figures to set maximum amounts that buyers can borrow.
The state of Massachusetts has a mix of what the federal government considers high-cost and low-cost areas. Low-cost areas are places where FHA loans max out at 65% of the amount Fannie Mae and Freddie Mac will fund for a mortgage, also known as the conforming loan limit. In high-cost areas, buyers are eligible for as much as 150% of the conforming loan limit.
The FHA loan maximum for a single-family home in low-cost areas is $314,827 in 2019, a number that applies in places like Pittsfield and Greenfield. The FHA loan limit for high-cost areas of the state is $726,525 for a single-family home.
Here are the 2019 standard FHA limits for all property types in the United States:
- One-unit: $314,827
- Two-unit: $403,125
- Three-unit: $487,250
- Four-unit: $605,525
Here are the 2019 standard FHA limits for high-cost areas in the United States:
- One-unit: $726,525
- Two-unit: $930,300
- Three-unit: $1,124,475
- Four-unit: $1,397,400
Are you eligible for an FHA loan in Massachusetts?
If you’re looking for a mortgage loan with more attractive terms than a conventional loan, an FHA loan could be the right option. Note that you will have to purchase mortgage insurance with an FHA loan, both upfront and for the life of the mortgage.