# Renovation Loan Massachusetts: 6 Options Compared

Page: https://magnoandco.com/blog-renovation-loans-massachusetts

> Renovation loan options in Massachusetts compared: HELOC, cash-out refi, FHA 203(k), Get the Lead Out, HEAT Loan and Somerville's home repair program.

Costs & Budgets

## Renovation loans in Massachusetts: HELOC, 203(k), Get the Lead Out, HEAT Loan and more

Renovation loan options in Massachusetts compared: HELOC, cash-out refi, FHA 203(k), Get the Lead Out, HEAT Loan and Somerville's home repair program.

**Mateus Magno**
Licensed Construction Supervisor · November 2, 2026 · 4 min read

Quick answer

The main ways to pay for a renovation in Massachusetts are a HELOC, a cash-out refinance, an FHA 203(k) loan, and targeted programs: MassHousing's Get the Lead Out loan for deleading, the 0% Mass Save HEAT Loan for energy upgrades, and Somerville's Home Improvement Program for income-eligible owners. This is general information, not financial advice.

Homeowners in Somerville and Cambridge ask the same thing after the walkthrough: how do people actually pay for this? Choosing the right renovation loan in Massachusetts can matter as much as choosing the right contractor.

The short answer: most people use home equity (a HELOC or a cash-out refinance), an FHA 203(k) loan, or a targeted state or city program. **I am a builder, not a lender or financial advisor.** This is general information to help you ask better questions. Talk to a lender about rates and terms for your situation.

## Renovation loan options in Massachusetts at a glance

| Option | Best for | Key fact |
| --- | --- | --- |
| HELOC | Owners with equity, flexible timing | Draw as you need it |
| Cash-out refinance | Large projects, one new mortgage | Replaces your current loan |
| FHA 203(k) | Buying or fixing a home that needs work | Limited version up to $75,000 |
| Get the Lead Out | Deleading 1 to 4 family homes | $30,000 to $45,000 max |
| Mass Save HEAT Loan | Insulation, heat pumps | 0%, up to $25,000 |
| Somerville Home Improvement Program | Income-eligible owners | Code, safety, lead, heating |

## HELOC and cash-out refinance

Both borrow against the equity in your house. In plain English:

- **HELOC (home equity line of credit):** a line of credit secured by your home. You draw money as the project moves and usually pay interest only on what you have drawn. That fits renovation, where payments to the contractor come in stages.
- **Cash-out refinance:** you replace your mortgage with a bigger one and take the difference in cash. It makes sense mainly when the new loan terms work for you overall, since your whole mortgage changes.

Either way, your house secures the loan. Compare offers from more than one lender and read the fees, not just the rate.

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## FHA 203(k) loan in Massachusetts

The [HUD 203(k) program](https://www.hud.gov/hud-partners/single-family-203k) lets you roll repair costs into an FHA mortgage. There are two types:

- **Limited 203(k):** finance up to **$75,000** for minor remodeling and non-structural repairs, like a kitchen update or paint.
- **Standard 203(k):** for major rehab, including structural work and additions. Repair costs must be at least **$5,000**, and the property value must stay within the FHA mortgage limit for the area.

HUD describes how the money moves: a HUD-approved consultant (optional for the Limited version) writes up the work and costs, the contractor pulls permits, and after each phase the consultant inspects and the lender releases a draw by two-party check to the owner and contractor. Expect more paperwork than a HELOC, and work with a contractor who is used to draws.

## MassHousing Get the Lead Out loan

Most Somerville housing was built long before 1978, so lead paint is common. [MassHousing's Get the Lead Out](https://www.masshousing.com/maintain-your-home/homeowner-programs/get-the-lead-out/) program finances deleading of 1 to 4 family homes, including condos:

- Low- and no-interest loans, depending on the borrower
- Maximum loans of **$30,000 to $45,000**, depending on property type
- For owner-occupants, loans are **deferred with no monthly payments**, and MassHousing pays closing costs and fees
- Income limits vary by county; the work must be finished within six months of closing
- Borrowers may also apply for a Lead Paint Credit from the Massachusetts Department of Revenue

You apply through a participating Local Rehabilitation Agency. When I checked, MassHousing's list included two Cambridge agencies but none for Somerville, so call to ask who serves your address. My [lead paint guide](https://magnoandco.com/blog-lead-paint-older-homes-renovation) explains the work itself.

## Mass Save HEAT Loan for energy upgrades

The [Mass Save HEAT Loan](https://www.masssave.com/residential/rebates-offers-services/financing) offers **0% financing** for eligible energy upgrades such as insulation, heat pumps and batteries. Effective January 1, 2025, the maximum financeable amount is **$25,000**. It starts with a no-cost Home Energy Assessment. If your renovation opens walls or the attic, pairing it with insulation is smart timing; see my [Mass Save insulation rebate guide](https://magnoandco.com/blog-mass-save-insulation-rebates-2026).

## Somerville's Home Improvement Program

The city's [Home Improvement Program](https://www.somervillema.gov/homeimprovementprogram) helps low- and moderate-income owners with code, health and safety repairs. Highlights from the city's page:

- Up to **$50,000 per unit** for health and safety work, up to **$7,500 per unit** for lead hazards, and up to **$10,000** for heating ($15,000 when converting from fossil fuel to electric)
- Income limit of 80% of Area Median Income, for example **$137,100** for a household of four
- A Mass Save energy assessment is required if you have not had one in the past two years
- The loan is due on sale, transfer or cash-out refinance, and rental units must stay at affordable rents

I round up more local programs in my [Somerville rebates and loans guide](https://magnoandco.com/blog-somerville-home-rebates-loans-2026).

**Builder's tip:** Get a written line-item budget before you apply for any loan. Lenders, 203(k) consultants and city programs all want to see the scope and the numbers, and a clear budget keeps you from borrowing too little and stalling halfway through.

## Need a hand?

Planning a renovation in Somerville, Cambridge or anywhere in Greater Boston? [Book a free walkthrough](https://magnoandco.com/contact) and I will send a written line-item budget, usually within 48 hours, that you can take to your lender.

## Frequently asked questions

What is the best way to finance a home renovation in Massachusetts?

It depends on your equity, income and project. Common options are a HELOC, a cash-out refinance, an FHA 203(k) loan, and targeted programs like the Mass Save HEAT Loan or MassHousing's Get the Lead Out loan. Talk to a lender about your situation.

How much can you borrow with a 203(k) loan?

HUD's Limited 203(k) lets you finance up to $75,000 into your mortgage for minor, non-structural work. The Standard 203(k) covers major rehab of at least $5,000, as long as the property value stays within the FHA limit for your area.

What is the Get the Lead Out loan in Massachusetts?

It is a MassHousing loan to remove lead paint from 1 to 4 family homes. Maximum loans run $30,000 to $45,000 by property type, and owner-occupant loans are deferred with no monthly payments.

Does Mass Save offer 0% loans?

Yes. The Mass Save HEAT Loan offers 0% financing for eligible energy upgrades like insulation and heat pumps, up to $25,000 effective January 1, 2025.

**Want a real number for your home?** See [my published prices and how I quote a job](https://magnoandco.com/pricing), and [the towns I work in](https://magnoandco.com/areas).

**Good to know:** this article is general information, not legal or engineering advice. Rules change and every property is different — confirm the details for your home with your city's building department, or [ask me](https://magnoandco.com/contact). See our [Terms & Disclaimers](https://magnoandco.com/terms).

**About the author**

Mateus Magno founded Magno & Co in 2020. He is a licensed Massachusetts Construction Supervisor (CS-123658), registered Home Improvement Contractor (HIC #220484) and certified Lead-Safe Renovator Supervisor who has renovated and managed over $5 million in projects across Greater Boston.

[More about Mateus →](https://magnoandco.com/about)

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