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First-Time Homebuyer Downpayment Assistance Loan Program

Salem, Massachusetts

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Income limit

80% AMI

Of area median income; varies by county and household size

Price cap

$1.0M

Highest purchase price the program allows

Repayment

Forgivable

Forgiven after 10 years

What is First-Time Homebuyer Downpayment Assistance Loan Program?

First-Time Homebuyer Downpayment Assistance Loan Program is a forgivable loan for homebuyers in Salem, Massachusetts.

  • The City of Salem First-Time Homebuyer Downpayment Assistance Loan Program (FTHB), administered by the Salem Department of Planning and Community Development (DPCD), provides 0% interest, deferred, forgivable second mortgages for low- and moderate-income first-time buyers purchasing a condo, single-family, or 2-4 unit home in Salem. Salem's program matches the buyer's down payment up to $6,500, with an additional $1,000 available to those who complete CHAPA homebuyer counseling, for a total maximum of $7,500. The loan is forgiven after 10 or 15 years of owner-occupancy (term depends on amount). Funded via HUD HOME, CDBG, and Community Preservation Act funds. Due to limited capacity, FY26 applicants are being placed on a waitlist.
  • Up to $6,500 in matching down-payment assistance, plus an additional $1,000 for buyers who complete a CHAPA-certified homebuyer counseling course (total up to $7,500). Provided as a 0% interest, deferred, and forgivable second-mortgage loan, forgiven after 10 or 15 years of continuous owner-occupancy (term depends on assistance amount).
  • Funding comes from HOME, CDBG, CPA, Federal, and Local Government.

Do you have to pay it back?

First-Time Homebuyer Downpayment Assistance Loan Program is forgiven after 10 years, so a buyer who stays that long does not repay it.

  • Repayment is triggered by Forgiven after 10 or 15 years of continuous owner-occupancy and unforgiven balance due upon sale, transfer, refinance with cash-out, or loss of owner-occupancy during the affordability period.
  • The assistance is recorded in 2 position.
  • Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

First-Time Homebuyer Downpayment Assistance Loan Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

The program requires

  • First-time homebuyer — with exceptions: First-time buyer required; single-parent and displaced-homeowner (divorce/legal separation) exceptions apply per Salem policy.
  • The home is occupied as a primary residence
  • On credit: Not formally published; lender minimums apply (typically 620+ for conforming/FHA)
  • A completed homebuyer education course, through North Shore CDC, Harborlight Homes, and other CHAPA-certified counseling agencies
  • Residency: Property must be located in the City of Salem and used as the borrower's primary residence.
  • Citizenship or immigration status: U.S. citizen or eligible non-citizen per first-mortgage product and HUD HOME rules
  • First-time buyer required (no ownership in past 3 years); single-parent and divorced/legally-separated displaced homeowner exceptions per Salem policy. Buyer's liquid assets cannot exceed $50,000. Property must be located in the City of Salem and used as principal residence. Eligible properties include condominium, single-family, or 2-4 unit owner-occupied home. Matching funds required. Forgivable after 10 or 15 years (term depends on assistance amount). Apply via pre-qualification form to be placed on a waitlist; due to limited capacity all FY26 requests including emergencies are being placed on a waitlist. Program is funded with HUD HOME, CDBG, and Community Preservation Act funds.

The program excludes

  • Manufactured homes
  • Purchases above the $1.0M price cap
  • Households above 80% of area median income

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

First-Time Homebuyer Downpayment Assistance Loan Program limits household income to 80% of the area median income, which varies by county and household size.

  • Household income at or below 80% HUD AMI for Boston-Cambridge-Newton HMFA (FY2025): approx. 1-person $91,200 to 8-person $151,100.
  • The limit applies to total household income, not only the borrower’s.
  • The program lists a maximum household size of 8.
  • Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

First-Time Homebuyer Downpayment Assistance Loan Program caps the purchase price at $1.0M.

  • Eligible property types include Single-family detached, Condominium, and 2-4 unit owner-occupied.
  • New construction is eligible.
  • Manufactured homes are not eligible.

Where does it apply?

First-Time Homebuyer Downpayment Assistance Loan Program serves buyers purchasing in Salem, Massachusetts.

How do you apply?

Applications for First-Time Homebuyer Downpayment Assistance Loan Program go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

    Required by the program, through North Shore CDC, Harborlight Homes, and other CHAPA-certified counseling agencies.

  2. Contact the administering agency to reserve funds

    Funds are reserved through Pre-qualification form required; applicants placed on waitlist (FY26 waitlist active due to limited capacity)., and are subject to availability.

  3. Work with a lender who handles the program

    Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.

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