Maine First-Time Homebuyer Programs
Buying a home has long been a hallmark of the American dream. But potential buyers can quickly find themselves struggling to navigate a whirlwind of credit checks, differing loan terms, alphabet soup program titles and endless paperwork. There are a lot of hurdles, especially when buying for the first time.
That’s one reason the state of Maine offers programs to help residents find the financing and education they need to make their first home purchase possible. The state’s programs are open to Maine residents of all income levels, and educational assistance is available to help potential buyers improve their credit scores to gain eligibility and save for closing costs, fees and down payments.
In January 2019, we reviewed first-time homebuyer programs in the state of Maine. This included a review of the MaineHousing website and other state resources. Here’s what first-time buyers need to know.
In this guide, we will cover:
Maine first-time homebuyer programs
MaineHousing, the state housing authority, administers a first-time homebuyer program that features competitive mortgage terms, low insurance rates and other assistance to help more Maine residents afford their own homes.
It’s known as the First Home Loan program, and it can work in conjunction with federal offerings to ensure potential buyers secure their best mortgage rates possible and low- or no-down-payment options.
This program comes with several special features. One is called the MaineHOPE program, which offers four months of coverage during unemployment. Missed payments for these months are added as a no-interest lien paid off at the sale of the home. Another, called the Purchase Plus Improvement option, lets homebuyers add home repair and improvement costs up to $35,000 to their total mortgage loan.
Certain groups can get additional benefits. Veterans can receive a 0.25 percentage point discount on their already low-rate loan. Homebuyers who choose the MaineHousing Advantage option can earn a cash grant if they complete a homebuyer education class and contribute at least one percent toward their mortgage down payment.
Eligibility for Maine assistance
Potential buyers must:
- Have not held an ownership interest in their home within the past three years (except for qualified active duty, veteran or retired military members).
- Maintain a minimum credit score of 640 and acceptable credit history.
- Fall below household income level limits, which vary by county but are generally between $68,000 and $105,000.
- Purchase a home within a price limit, which varies by county but is generally around $300,000 for one unit.
First Home Loan Program
- Below-market rates on a 30-year, fixed-rate mortgage.
- $3,500 in down payment and closing cost assistance through the Advantage program. This is given as a grant that does not need to be paid back.
- Additional 0.25% discount for qualified veterans, active duty and retired military members through the Salute ME program.
- Ability to include home improvements in loan amount through the Purchase Plus Improvement program.
- Financing available for mobile homes.
- Payment protection for periods of unemployment.
How it works
Maine residents can apply for a First Home Loan mortgage through nearly 40 approved banks, credit unions and mortgage companies across the state. Potential buyers will talk with a MaineHousing-approved lender to determine an affordable price range and mortgage options. The lender will then help customers through the process from application to closing.
To be eligible for the Advantage program’s $3,500 down payment grant, homebuyers must take a homeowner education class approved by the organization hoMEworks.
National first-time homebuyer programs
Nationwide programs are also available to assist first-time homebuyers looking to finance a home purchase. If you are buying in a rural area, the United States Department of Agriculture offers a guaranteed loan program through its rural development unit for single-family housing in Maine. Habitat for Humanity, a global nonprofit organization that builds affordable homes for families in need of housing, also helps lower-income families secure their first homes through an application process and a commitment to help build their own home or other Habitat homes.
More private banks and lenders are introducing programs that offer closing cost assistance, low down payment options, low fixed-rate loans and other products to help increase access to homeownership. Many offer rates and down payment options competitive with federal lending products. Many private financial institutions are collaborating with local agencies that provide homeowner education and offer incentives for potential first-time buyers who complete a homebuying course. Contact your local bank, credit union or lender to learn more about these options.
To learn more about national programs available to first-time homebuyers, click here for LendingTree’s comprehensive list of resources.