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2022 Maine First-Time Homebuyer Programs

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Qualified borrowers in the state of Maine can take advantage of first-time homebuyer programs that offer down payment and closing cost assistance, discounted mortgage interest rates for military personnel and other help for prospective homeowners. That said, a first-time homebuyer may need to meet qualifications for credit score, debt-to-income ratio and down payment amount. Here’s what you need to know about first-time homebuyer programs in Maine, and how to get started.

Maine statewide and local first-time homebuyer programs

These five programs can help qualified first-time homebuyers purchase their own house or mobile home.

The state’s housing authority, MaineHousing, provides programs to help residents find affordable housing and housing-related services such as weatherization and energy assistance programs. MaineHousing provides cash grants and mortgage interest discounts for qualified buyers.

Program nameAssistance amountAssistance typeWhere it’s available
Advantage$3,500Cash grantStatewide
Multi-Unit AdvantageUp to $14,000 for a four-unit buildingCash grantStatewide
Salute ME/Salute Home AgainN/A0.25% discount on 30-year fixed interest rate loanStatewide
Mobile Home Self-Insured Option (less than 20 years old)N/ABorrowers pay a higher mortgage interest rate in lieu of mortgage insuranceStatewide
Purchase Plus Improvement$500 to $35,000Home improvement funding financed into mortgageStatewide

What to know about different types of down payment assistance

Residents of the Pine Tree state may be eligible for:

Additional mortgage discount. Those who qualify for the Salute ME or Salute Home Again program will get an extra 0.25% off their mortgage interest rate.

Grants. You can use this money toward a down payment or closing costs. The Mobile Home Replacement Initiative grant can also be used toward outstanding assessments and payment of an existing mortgage, plus removal of the original unit.

How Maine first-time homebuyer programs work

Lending Tree researched 2022 MaineHousing guidelines to put together the following information. Since some regional housing authorities and/or housing nonprofits may fund their own first-time homebuyer assistance programs, be sure to search for all options in your area.

Here are a few other basic things to keep in mind.

Income limits. Most Maine residents are income-eligible for MaineHousing programs. Visit the site to learn what the income limits are in your area.

Homebuyer education requirements. Some programs, such as Advantage and Multi-Unit Advantage, require you to take an approved homebuyer education program before you close the mortgage.

Any payback requirements. If you don’t stay in the home for a specified time frame, you might need to pay back some (or all) of the assistance you receive.

Mortgage preapproval. MaineHousing has a list of more than three dozen banks, credit unions and mortgage companies.

Maine first-time homebuyer program requirements

The basic requirements for a first-time homebuyer program might be more strict than typical minimum requirements for a first mortgage. For example, you might qualify for an FHA loan with a credit score between 500 and 580, but to get down payment assistance through MaineHousing’s Advantage program, you’ll need a score of at least 640.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
Advantage64043% (up to 45% may be considered)$86,600 to $131,100 (depends on location and family size)Nine years (MaineHousing will reimburse any federal recapture if you sell before that time)
Multi-Unit Advantage64043% (up to 45% may be considered)$86,600 to $131,100 (depends on location and family size)Nine years (MaineHousing will reimburse any federal recapture if you sell before that time)
Salute ME/Salute Home Again64043% (up to 45% may be considered)$86,600 to $131,100 (depends on location and family size)Nine years (MaineHousing will reimburse any federal recapture if you sell before that time)
Self-Insurance for Mobile Homes (less than 20 years old)64043% (up to 45% may be considered)$86,600 to $131,000 (depends on location and family size)Nine years (MaineHousing will reimburse any federal recapture if you sell before that time)
Purchase Plus Improvement64043% (up to 45% may be considered)$86,600 to $131,100 (depends on location and family size)Nine years (MaineHousing will reimburse any federal recapture if you sell before that time)

THINGS YOU SHOULD KNOW

First-time homebuyer assistance programs are based on area median income limits. Most Maine residents are eligible for assistance programs in terms of their income. To find out where you stand, check the current Maine income limits for your county at the HUD website, or check the table above.

National first-time homebuyer programs

As noted, you need to be preapproved for a mortgage in order to apply for the first-time homebuyer assistance programs mentioned above. Popular mortgage options are government-backed loans, some of which don’t require a down payment; they’re sometimes called “national first-time homebuyer programs,” even though you don’t have to be a first-time homebuyer to apply.

Maine’s first-time homebuyer program benefits might be used for down payment and/or closing costs on the following kinds of loans:

Conventional mortgage. A conventional mortgage is one that isn’t secured by the U.S. government. It has stricter guidelines (and also higher loan limits) than a government-backed home loan. Two kinds of conventional loans popular among first-time homebuyers are Freddie Mac Home Possible® and Fannie Mae HomeReady®.

FHA mortgage. Backed by the Federal Housing Administration, FHA loans are an entry to homeownership for those whose higher debt-to-income ratios and lower credit scores make them ineligible for conventional mortgages. However, you’ll be required to pay two forms of FHA mortgage insurance, and you won’t be able to borrow as much as you would with a conventional loan.

VA mortgage. These loans are backed by the U.S. Department of Veterans Affairs and are solely for active-duty or veteran service members, along with their eligible surviving spouses. The VA loan has no down payment, no loan limit and no mortgage insurance requirement.

USDA mortgage. Designed for low- to moderate-income borrowers, USDA loans are available in designated rural areas only. They’re secured by the U.S. Department of Agriculture, which requires no down payment. You’ll have to pay a 1% guarantee fee upfront (typically rolled into the mortgage), as well as 0.35% per year (which is added to the monthly loan payment).

FAQs about Maine first-time homebuyer programs

Who qualifies as a first-time homebuyer in Maine?

You could be a “first-time” homebuyer even if you’ve owned a home in the past. That’s because HUD defines a first-time homebuyer as someone who:

  • Hasn’t owned a home in the past three years
  • Had previously owned with an ex-spouse
  • Owned a place that didn’t have a permanent foundation
  • Had a property that couldn’t be brought up to code for less money that it would take to build a new permanent residence

Be aware that some first-time homebuyer programs include income restrictions.

Note: The first-time homebuyer requirement is waived for MaineHousing’s Pre-1976 Mobile Home Replacement Initiative program. It will also be waived for those who qualify for the “Salute Home Again” program.

Can I qualify for down payment assistance in Maine?

If your circumstances match the requirements for first-time homebuyer programs in Maine, then you might qualify for down payment assistance.

How much of a down payment do I need to buy a house in Maine?

You might not need a down payment at all if you qualify for a VA or USDA mortgage. For an FHA mortgage you’ll have to put down at least 3.5%.

If you select the Mobile Home Self-Insured option, a 5% down payment is required and at least 3% of that must be from your own funds.

Home price trends in Maine’s major areas

According to Q2 2021 data from the National Association of Realtors, the biggest monthly mortgage increase was in Cumberland County (which includes Portland); a monthly mortgage payment was $1,346, a $124 increase over the previous year. The median home price in Cumberland County was $354,805, up 13.4% from the year before. Close behind was York County (home to Kennebunkport), where mortgages went from $1,222 in 2020 to $1,346 and the median home price was $324,349, also up 13.4% from the year before. Androscoggin County mortgages rose $101 year-over-year from $701 to $802, and the median home price was up 17.8% to $211,361.

 

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