Conventional Loans in Massachusetts: Buyer Guide (2026)

With a $715,000 median single-family price in June 2026, most Massachusetts buyers end up weighing a conventional loan against an FHA loan.

Credit and debt-to-income rules, three 3% down options, and 2026 county loan limits determine how conventional financing works for your property type.

Check Your Massachusetts Conventional Loan Eligibility

Comparing these benchmarks helps you check if you qualify, pick the right conventional option, or spot when FHA is the better choice.

What Is a Conventional Loan?

A conventional loan is any mortgage that is not insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Most are "conforming" mortgages that follow Fannie Mae or Freddie Mac rules and stay within county limits set each year by the Federal Housing Finance Agency (FHFA).

You can use a conventional mortgage to buy a one-unit single-family house, an eligible condo, a 2- to 4-unit multifamily property, a one-unit second home, or an investment property.

Conventional Loan Requirements

Your exact requirements depend on whether your application is approved through Fannie Mae's automated underwriting system, Desktop Underwriter (DU), which handles most files, or manually by a human underwriter.

Credit Score

Having no numeric minimum in DU does not mean any credit score will pass, because DU evaluates the whole credit profile and risk factors in the file. Individual lenders commonly set their own credit score minimums above Fannie Mae's baseline, so the number that matters is your lender's floor.

Because we are a mortgage broker that works with multiple wholesale lenders, our team can compare those lender-specific score thresholds side by side.

Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is your total monthly debt—including your new principal, interest, property taxes, homeowners insurance, mortgage insurance, and any condo or HOA fees—divided by your gross monthly income. On manual files, moving from the baseline cap to the higher tier depends on meeting Fannie Mae's credit score and cash reserve rules.

If you own a business or work as an independent contractor, how your lender calculates qualifying income affects your DTI just as much as the cap itself; see our guide to self-employed mortgages in Massachusetts for how that income is documented.

Your 3% Down Options

You do not need 20% down, or even 5% down, to get a conventional mortgage in Massachusetts.

Fannie Mae and Freddie Mac offer three ways to put 3% down on a primary residence, and your household income largely decides which ones you can use. A 3% down payment equals a 97% loan-to-value (LTV) ratio, which compares your loan amount to the home's value.

Standard 97% LTV

Fannie Mae's standard 97% LTV option is built for buyers whose income exceeds the 80% AMI cap on affordable programs. At least one borrower must be a first-time homebuyer—meaning no ownership interest in a property in the last three years—unless the loan uses HomeReady or a Community Seconds subordinate loan.

HomeReady

HomeReady is open to both first-time and repeat buyers at or below 80% of AMI, and unlike Fannie Mae's standard 97% option, it covers 2- to 4-unit primary homes, with LTVs above 95% up to 97% allowed with conditions. Because AMI limits update each year, confirm the current figure for your Massachusetts town or census tract with your lender.

Home Possible

Freddie Mac's Home Possible stands out for flexibility on where your cash comes from: the down payment can come from family gifts, employer-assistance programs, secondary financing, or sweat equity. It also reduces mortgage insurance coverage requirements for LTVs above 90%.

Combining a Conventional Loan With Down Payment Assistance

Both Fannie Mae's standard 97% LTV option and HomeReady allow a combined loan-to-value (CLTV) of up to 105% when paired with an eligible Community Seconds subordinate loan, and Freddie Mac Home Possible allows secondary financing toward the down payment. You can see how state and local assistance works in our overview of Massachusetts first-time homebuyer programs.

MassHousing, the Massachusetts Housing Partnership's ONE Mortgage, and municipal grants have their own income limits, price limits, and participating lenders, and you apply through a participating lender. Next Wave Mortgage is not a participating lender for those programs; our team helps you compare the conventional route side by side with them.

Check Your Massachusetts Conventional Loan Eligibility

What PMI Costs and How to Remove It

Put less than 20% down on a conventional loan and you will usually pay private mortgage insurance (PMI), whose cost varies with your credit score, your LTV ratio, and the insurer. Under the federal Homeowners Protection Act, you have a clear path to remove PMI on a single-family primary residence.

Fannie Mae and Freddie Mac rules can also allow earlier cancellation—for example, on a one-unit Home Possible loan once the balance drops below 80% of the appraised value and program criteria are met—and investor rules can never be less favorable than the federal protections above.

Example: 3% Down on a $715,000 Home

Here is how those percentages look on the June 2026 statewide single-family median price of $715,000:

• 3% down payment: $21,450 down leaves a $693,550 loan amount, which is under the $832,750 baseline limit and qualifies as a standard conforming loan in every Massachusetts county.
• 20% down to skip PMI: Avoiding PMI from day one would require $143,000 down.
• PMI removal thresholds: Based on the $715,000 original value, you can request PMI cancellation once your principal balance reaches $572,000 (80%), and your servicer must end it automatically when the balance is scheduled to reach $557,700 (78%), assuming you are current on payments.

2026 Loan Limits: Standard, High-Balance and Jumbo

Your original loan amount cannot exceed the FHFA limit for your county and unit count. In 2026, Massachusetts one-unit limits sit in three tiers: $832,750 in Barnstable, Berkshire, Bristol, Franklin, Hampden, Hampshire, and Worcester; $962,550 in Essex, Middlesex, Norfolk, Plymouth, and Suffolk; and $1,249,125 in Dukes and Nantucket.

Limits for 2- to 4-unit properties are higher in every county, and limits change every year; see our guide to conforming loan limits in Massachusetts for the full county breakdown.

A loan above the $832,750 baseline but within your county's higher limit—such as a $900,000 mortgage on a single-family house in Middlesex, Norfolk, or Suffolk County—is a high-balance mortgage. High-balance loans must go through DU and cannot use the 3% standard option or the 5% down 2–4 unit rule.

Above your county's FHFA limit, see our guide to jumbo loans in Massachusetts.

Multifamily Homes, Condos and Fixer-Uppers

Two-families, triple-deckers, and condos are common purchases in Massachusetts, and conventional rules treat each one differently.

2–4 Unit Homes With 5% Down

Since late 2023, Fannie Mae allows up to 95% LTV (5% down) on a 2- to 4-unit primary residence purchase or limited cash-out refinance, up from the older 85% cap on two units and 75% cap on three or four units. Two restrictions apply:

• DU approval required: The file must be underwritten through Desktop Underwriter; manually underwritten loans are excluded.
• No high-balance loans: Your loan amount must stay at or below the baseline conforming limit for the unit count—$1,066,250 for a two-unit, $1,288,800 for a three-unit, and $1,601,750 for a four-unit home in 2026.

Unlike FHA, conventional loans do not apply FHA's self-sufficiency rental income test on 3- and 4-unit buildings; see our guide to multifamily mortgages in Massachusetts for how rental income and reserves work. If you are buying a vacation home rather than a primary residence, Fannie Mae restricts second homes to one-unit properties only.

Condos

Buying a condo with a conventional loan takes two approvals: one for you and the appraisal, and a second for the condo project itself. Most attached condo units require a project review to confirm the association meets Fannie Mae standards, and some projects are ineligible.

Because associations vary widely in owner-occupancy ratios, budget reserves, and master insurance coverage, read our page on condo loans in Massachusetts before you make an offer.

Renovation Loans (HomeStyle)

If a house needs updates, Fannie Mae's HomeStyle Renovation mortgage lets you roll the purchase and the work into a single conventional loan up to the conforming limit:

• Renovation cost cap: On a purchase, total renovation costs cannot exceed 75% of the lesser of the purchase price plus renovation costs or the "as-completed" appraised value.
• Eligible properties: Available on 1- to 4-unit primary homes, one-unit second homes, one-unit investment properties, and eligible condos, co-ops, PUDs, and manufactured homes.
• DIY work: On a one-unit property, do-it-yourself work is allowed for up to 10% of the as-completed value.

Conventional vs. FHA: Which Is Better for You?

Both conventional and FHA loans let you buy a primary home with a small down payment. Where they part ways is on mortgage insurance cost and duration, one-unit loan limits outside Greater Boston, and the rules for 3- and 4-unit buildings.

A conventional loan is usually worth pricing first if you have solid credit and want to drop mortgage insurance. It also fits when you need a larger one-unit loan in Central or Western Massachusetts, or when a 3- or 4-unit building might fail FHA's rental test.

FHA can fit better when your credit score is in the 500s, since FHA has set rules down to a 500 score, or when you want the seller to cover up to 6% toward closing costs. Price both side by side, and see our guide to FHA loan requirements in Massachusetts.

Next Steps

1. Check your credit and DTI against the DU rules. Remember that each lender sets its own credit score floor above Fannie Mae's baseline, and your total monthly debts with the new housing payment need to stay within the 50% DU cap.
2. See where your income falls against 80% of AMI. That single figure tells you whether you can use HomeReady or Home Possible (including on a 2- to 4-unit home) or if you will use the standard 97% LTV option as a first-time buyer.
3. Check the 2026 limit for your county and unit count. If you use Fannie Mae's standard 97% LTV option or the 5% down 2- to 4-unit rule, your loan amount must stay at or below the baseline conforming limit rather than the high-balance tier.
4. Compare quotes across multiple wholesale lenders. Checking your eligibility with our team uses no hard credit pull, pre-approvals typically take 1 to 3 business days once your documents are in, and you can book a free 15-minute call with a loan officer to walk through your numbers.

Check Your Massachusetts Conventional Loan Eligibility