Rugged terrain along stunning coastlines, beaches, dense forests, small town vibes and the New England charm that makes you feel like you’re at home. Welcome to Maine. Are you a first-time homebuyer shopping for a new home in the Pine Tree State?
Maine has plenty to offer homebuyers thinking of setting roots in New England. Year-after-year, the East Coast state tops ‘safest states’ rankings based on crime and residential safety data from across the country. It has one of the lowest unemployment rates in the U.S. at 4.9%, according to the Bureau of Labor Statistics. And its minimum wage sits at $12.15, higher than the $7 offered in other states.
There is a catch: Median home values in Maine are a whopping $381,000—that’s a steep price tag compared to the state with the least expensive real estate, West Virginia, at $119,600.
If you’re thinking of buying your first-home in Maine, state and local homebuyer assistance programs are available to help you with the biggest purchase of your life. From connecting you with low-interest home loans to chipping in on your down payment and closing costs, read on to learn more about these programs, eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in Maine?
For a quick clarification, a first-time homebuyer is defined as any family or individual who has never owned a home, or at least not in the past three years. This may depend on the region. It’s worth waiting it out if you’re nearing the three-year mark because these programs provide a significant financial boost.
As always, when you’re researching, read the fine print and any limitations provided below.
And here’s some good news: most of the local programs described below aren’t restricted to first-time homebuyers! The emphasis is on helping military personnel, veterans and low-income families across Maine with the biggest purchase of their lives.
Statewide Homeownership Assistance Programs
The Maine State Housing Authority (MSHA) has a series of homeownership programs that help with everything from securing below-market interest rates to assisting with your down payment or providing mortgage payment protection in case of unemployment.
Across the board, the programs are available to first-time homebuyers and anyone who hasn’t owned a property in the past three years. This bit of criteria is waived if you’re military personnel in active duty, a veteran or have retired in the military.
Here’s a closer look at each program’s details, how to apply, as well as the fine print.
MSHA First Home Loan
The First Home Loan program is the MHSA’s flagship program, providing homebuyers with assistance starting with a mortgage that’s lower than current market rates. MSHA loans include a fixed interest rate so your principal and interest payments will never increase. They’re usually set at a 30-year term, with terms for mobile homes at 20, 25 or 30 years depending on your needs.
Ultimately, these lower interest rates can save you tens of thousands of dollars over your decades-long term.
To accompany the First Home Loan, you can also apply for down payment and closing costs assistance. This funding should go toward expenses – like your appraisal, title search, legal fees and closing costs.
To qualify for this program, you must be a first-time homebuyer or you must not have owned a home in the past three years. Limits on your income and the price of your home are crucial parts of eligibility too – you can check the income limits and purchase price limits for your county here.
All new and existing homes, apartment buildings, condominiums and permanently attached mobile homes manufactured within the last 20 years are fair game.
MSHA Salute ME Program
The MSHA runs a Salute ME program that offers a 0.25% discount to the state’s military servicemen and veterans as a special thanks for their sacrifices. The additional discount is added onto the already low-interest First Home Loan 30-year mortgage.
Homebuyers don’t need to be a first-time buyer in this case. Instead, the priority is on helping military personnel – active duty or veterans – with their home purchase. Mortgage loans are also available with little or no down payment.
The same household income and home purchase price limits apply, but most Maine households and homes are eligible for this program.
Read more about Salute ME on its official program page.
MSHA Mobile Home Self-Insured Option
If you’re a homebuyer eyeing a mobile home in Maine, this program can step in to help you when your purchase’s loan-to-value is more than 80% and less than or equal to 95%.
You’ll have to pay a higher interest rate, but you won’t be required to purchase mortgage insurance.
The program is available to first-time homebuyers, and anyone who hasn’t owned a property in the past three years.
The maximum purchase price is $175,000 and eligible property types include single-wide and double-wide mobile homes located on owned land, approved parks or privately leased lots.
You’ll need a minimum credit score of 640, and a maximum debt ratio of 33%.
Check out the program’s full details on the Mobile Home Self-Insured Option official brochure.
MSHA Advantage Program
The Advantage Program is a down payment and closing costs assistance program that homebuyers can apply for if they’ve already secured an MHSA loan from any of the programs above (First Home, Salute ME, Mobile Home Self-Insured Option).
The assistance amount is $3,500 provided in a grant to help out with your down payment, closing costs and any other expenses related to your home purchase.
To qualify, you must contribute at least 1% of the total home loan amount. You’ll also need to complete a homebuyer’s education course prior to closing.
Check out the Advantage Program full details.
MSHA Pre-1976 Mobile Home Replacement Initiative
Maine Housing’s Pre-1976 Mobile Home Replacement Initiative provides existing homeowners with an opportunity to replace an outdated mobile home they own and occupy as their primary residence with a new Energy Star certified manufactured home.
Homeowners can apply for a low-interest MHSA mortgage loan and pair it with a $30,000 Maine Housing grant. The combination of funds is to help homeowners with the cost of dismantling and removing their mobile home and replacing it with a new one on the same site as their existing home.
The $30,000 grant is forgiven as long as you live in your energy efficient mobile home for at least a decade. This is a pretty generous program worth considering for any manufactured home homeowners who were thinking of upgrading to a new mobile home.
Check out the full details, including household income limits and purchase price limits on the Mobile Home Replacement Initiative website.
MSHA Home Ownership Protection for unEmployment (HOPE)
It’s every homeowner’s worst nightmare: losing your job. When the income stream stops, homeowners struggle to make ends meet—and pay monthly mortgage payments. The MSHA created the HOPE program to help any Maine Housing borrowers who find themselves suddenly unemployed.
HOPE offers help to borrowers who are in good standing with their loan by covering four MSHA mortgage payments, including taxes and homeowners’ insurance.
The amount covered becomes a second mortgage, with no interest; the stipulations are that you repay it when you pay off your first mortgage or sell your property. There are no fees or monthly payments.
This could end up being a tremendous help to families when an income is lost, and they need immediate help with mortgage payments.
Read more about the HOPE program.
Homebuyer Programs by Location in Maine
While Maine Housing’s set of homeownership assistance programs listed above are a huge help with major parts of your homeownership journey, individuals should also check on local initiatives and incentives that are available.
In most cases, you can double dip, combining statewide homeownership programs with an initiative from the city or county in which you plan to call home.
The programs are a mixed bag – some are exclusively for first-time homebuyers but you’ll notice these local programs shift the focus to helping any homebuyers – including repeat homebuyers – who are within a lower-income bracket. Read more for our complete rundown of local programs.
Hugging the Androscoggin River is the scenic city of Auburn. If you’re dreaming of buying a home in Auburn, the city’s Community Development Department runs a HOMEBuyer Program, designed to help low- and moderate-income families with their down payment.
If you qualify, the city will gift you a $5,000 grant whether you’re a first-time homebuyer or a repeat homebuyer. The funds must go towards your down payment or closing costs. You can also sign up for free budgeting and credit counseling courses.
Are you shopping for a new home in Bangor? Make sure you check to see if you’re eligible for the city’s two homebuyers’ assistance programs. The first is a Down Payment Assistance program, providing low-income homebuyers with a grant to supplement their down payment.
The second is a Closing Cost Assistance program, which will cover all the expenses associated with closing. This includes appraisal fees, credit reports, title search, title insurance policy, flood certification fees, attorney’s fees and recording fees. This can easily amount to several thousand dollars! If you can demonstrate financial need, this can be gifted to you.
These two programs, paired with an MHSA low-interest, fixed-rate mortgage, could make your path to homeownership a smooth journey.
Read more about the pair of programs on the City of Bangor’s website.
Caribou City’s Section 8 Homeownership Program was organized to help low-income renters purchase a home. In a nutshell, Caribou locals who rely on a housing subsidy can request to have their financial assistance applied towards their monthly mortgage payment after they purchase their first home.
To qualify, you must be a resident in “good standing” with no rent violations or outstanding rent payments. You must not owe any debts to the Caribou Housing Authority.
First-time homebuyers and anyone who hasn’t owned a home in the past three years are eligible, but you must meet minimum annual income requirements.
You also must have at least a 3% down payment; further, you must successfully complete 10 hours of homebuyers’ education courses.
Homebuyers narrowing their search to Lewiston can look into the city’s HOME Investment Partnerships Program that runs alongside its sister city Auburn’s HOMEBuyer Program.
In Lewiston, the HOME program is aimed at helping low- and moderate-income households with coming up with the cash to make their home purchase.
For starters, eligible homebuyers are required to contribute $1,000 toward their down payment. The city will then provide a five-to-one match, gifting $5,000 to applicants. There is only one $5,000 grant per household.
Lewiston city will also give eligible applicants a $2,000 forgivable loan to help with down payment and closing costs. An $8,000 forgivable loan is available to extremely low-income households. You can check out how the loans are forgiven here.
Learn more about the Lewiston HOME program.
Portland, the busiest city in Maine, has its share of programs to help homebuyers with home loans, finances and even counseling.
The city offers first-time homebuyer courses in the downtown core. The courses last one full day and walk you through the homebuying process, money management, how to qualify and obtain a mortgage, and what to expect at closing.
Completing the course is mandatory to apply for MSHA funding.
Check out upcoming classes on the City of Portland website.
Avesta Housing, which is a non-profit affordable housing provider in Maine and New Hampshire, also offers regular Homebuyer Education courses. They’re presented on Zoom, making it easy for anyone to sign up online regardless of your location within the city.
Check out Avesta’s website for the list of upcoming classes. Avesta Housing sponsors a Homeownership Center that includes free services like credit counseling and foreclosure counseling.
Ready to settle down in Maine?
From bustling cities like Portland and Augusta to artsy, cultural hubs like Waterville and Brunswick, there’s an abundance of great options for families shopping for their first home in Maine.
Across the state, homebuyers will find a variety of housing choices too, from single-family homes to state-of-the-art manufactured homes, and multi-family condos and townhouses.
A great incentive is that homebuyers are treated to a string of assistance programs and incentives when they’ve zeroed in on their dream home and are ready to buy.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.