Answer: The soil pH should be within a certain range to allow the plants to use the nitrogen contained in the soil (and in fertilizer.) In your area, I would expect the soil to be naturally somewhat acidic, with a relatively low pH. You would use lime to raise the pH within the acceptable or optimal range for lawn grass. Lime is traditionally spread in the fall but you can do it any time the ground is not frozen.
Lime works its way slowly through the soil and the soil reverts slowly back to acidic, so it needs to be reapplied every few years, depending on your test results.
The only way to tell if you need to add lime or how much to use is by running the soil tests. If you use too much lime you could raise the pH too high, outside the optimal range for grass, and your lawn would suffer as a result. Too high a pH could also affect nearby trees or shrubs that have roots in the soil below the lawn.
Your local county extension should be able to help you with the tests and interpreting the results. In the meantime, here is more information about liming the lawn from their web site. You may need to cut and paste the complete url into your browser to make it work correctly because it is so long.
I hope this answers your question.
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