Home buyers have asked for a piece of Maine. The state’s residential property market broke records in 2020, hitting its highest median sales price in more than two decades. While that could mean there is a lot of competition for first-time buyers, there is also several Utilities available to improve the playing field.
The Maine State Housing Authority, known as MaineHousing, connects first-time buyers with loan options and assistance programs to make home ownership more affordable. In Maine, if you have not owned a home in the past three years, consider a first-time buyer.
Maine first time buyer loan programs
MaineHousing offers 30 year mortgages with low fixed rates and little to no down payment. The following options are available for first-time buyers:
MaineHousing’s first home loan program
MaineHousing’s first home loan program offers first-time home buyers 30-year fixed rate mortgages, either as conventional, FHA, VA, or USDA loans. Many of these options require little to no down payment. You can pair this mortgage with MaineHousing’s Down Payment and Closing Fee Utility called Advantage to maximize the savings.
The First Home Loan program offers zero and two discount point interest options, with each point representing 1 percent of the amount borrowed. You can prepay points to lower your interest rate.
First Home Loan mortgages also include payment protection in the event you lose your job. Maine HOPE (“Home Protection When Unemployed”) allows borrowers in good standing who become unemployed to receive an advance of up to four mortgage payments, including taxes and homeowner insurance. Payments are packaged as an interest-free junior lien that only needs to be paid back when the home is sold or the first mortgage is paid back.
- Must be a single family home, condominium with two to four units, condominium, or mobile home
- Must meet MaineHousing Purchase price limits
Because MaineHousing mortgages are funded with bonds for mortgage income, you may be subject to federal redemption tax. That is, if you sell your home within nine years of buying it and you make a profit on the sale and your income has increased significantly, the government could tax some of the money you saved on a MaineHousing mortgage. Beginning in 2013, those who pay this tax can get a refund from MaineHousing.
MaineHousing Salute ME
MaineHousing’s Salute ME program enables active, seasoned, and retired service members to receive a 0.25 percent discount on a 30-year fixed-rate mortgage from First Home. As with the First Home Loan Program, borrowers must meet income and purchase price limits in order to qualify.
The agency waives the first-time purchaser obligation for program participants, but borrowers must either remain on active duty for 180 days or within a war zone, or have been honorably discharged from military service. National Guard members who meet the requirements are also eligible.
MaineHousing auto insurance for mobile homes
MaineHousing’s Mobile Home Self-Insurance option offers mortgages for first-time buyers of a single or double-width home on their own or leased land. Through this program, the agency insures mobile home loans with a loan-to-value ratio (LTV) between 80 and 95 percent. In return, the borrowers pay a higher interest rate than the mortgage insurance.
- 5 percent down payment (at least 3 percent must come from your own resources)
- Minimum score of 640
- A maximum of 43 percent debt-to-income ratio
- Must be a permanently attached mobile home that has been built in the past 20 years (an unattached mobile home on leased land may qualify)
- May not use more than 15 percent of the property for business purposes
- Maximum purchase price of $ 175,000
MaineHousing Purchase Plus Improvement Program
MaineHousing’s Purchase Plus Improvement (PPI) program allows you to finance a home purchase and repairs with a single mortgage, as long as the cost of the home and repairs does not exceed the purchase price limits for First Home Loan.
The PPI loan allows for $ 500-35,000 in funding for certain types of home renovations, including adding a garage or making energy efficiency improvements. The loan cannot be used for improvements such as adding a deck or a swimming pool. Work must start within 30 days of loan closing and be completed within six months (180 days) of closing.
MaineHousing Indian Housing Mortgage Insurance Program
Obtaining a mortgage can be difficult for Native Americans living on tribal reservations because land use or ownership restrictions can make it difficult to insure a loan. MaineHousing’s Indian Home Mortgage Insurance Program, while not in and of itself a loan, does provide mortgage insurance for loans for tribal property, which removes some of the credit risk. The eligibility requirements for this program include:
- The borrower must appear on the Passamaquoddy Tribe or Penobscot Nation’s annual census and the property must be on the Penobscot Tribal Reservation, Indian Township Passamaquoddy Reservation, or Pleasant Point Passamaquoddy Reservation
- The borrower must meet the credit, debt-to-income ratio, and employment requirements
- Funding must either be to buy or upgrade an existing or manufactured home, or to build a new home (or, for current homeowners, refinance at a lower interest rate).
- The borrower must have funds to cover the closing costs
Maine deposit assistance
Down payment assistance is available for MaineHousing borrowers who need help with these costs.
The MaineHousing Advantage Down Payment and Closing Fee Support Program can provide qualified buyers with up to $ 3,500 in cash for a down payment or closing fee. To be eligible, the borrower must:
- Must combine assistance with a MaineHousing loan program (zero point program only)
- Must complete a homebuyer training course
- Must contribute at least 1 percent of the loan amount to purchase; The cost of the homebuyer training course is 1 percent
Other first-time buyer loan programs
In addition to the MaineHousing programs, government mortgages such as FHA, VA, and USDA loans offer terms and interest rates that can make home buying easier for first-time home buyers. Your mortgage lender can also advise you of other specialized loan and assistance options. Bankrate’s First Homebuyer Loans and Programs The guide can give you more insight into what other programs may be available to you.
For more home ownership programs in Maine, including by city, see HUD.gov.
Once you have a handle on the initial homebuyer loan and down payment assistance, a MaineHousing is approved Mortgage lender can guide you through the application process and help you find the options that best fit your situation. The terms and interest rates vary depending on the lender, so this is important Compare loan options carefully.