MaineHousing drops base interest rate for first-time home buyers
Photo / Maureen Milliken
MaineHousing, headquartered at 353 Water St., Augusta, has dropped the base interest rate in its first-time home program to 3.25%.
MaineHousing has dropped its base interest rate on 30-year First Home Loan mortgages, aimed primarily at first-time buyers, to 3.25%.
The new rate, which is down from 3.375%, became effective Thursday.
"We’re excited to lower our interest rate to help make the dream of homeownership a reality for more Mainers,” said MaineHousing Director Daniel Brennan in a news release.
The average mortgage rate in the state is 3.757% for a 30-year fixed mortgage, 3.199% for a 15-year fixed and 3.529% for a 5/1 adjustable-rate mortgage, according to nerdwallet.com.
First Home Loan income and purchase price limits also increased earlier this year, resulting in more people and homes qualifying for MaineHousing’s loan program, according to the release. MaineHousing is the state's housing authority.
The First Home Loan program isn’t limited to people who have never owned a home, but also can include previous owners who have not had ownership in their principal residence in the last three years, are active-duty veterans or retired military personnel, or owned a mobile home on leased land.
According to MaineHousing's affordability index, the median salary needed to buy a house in Maine rose $16,386 from 2014 to 2018. In 2014, the median price of a home in Maine was $170,000, and to afford that home, a person had to make $47,381. The state's income was $49,747, and a person making that could afford a home of $176,000.
In 2018, the state's median home price was $212,500, and a Mainer had to have an annual income of $64,367 to afford a house of that price. The state's median income was $56,987, and someone making that could afford a house costing $188,138.
The most recent U.S. Census figures, for 2013-2017, show that there are 746,596 owner-occupied housing units in Maine — 72% of the state's housing is owner-occupied. The median value of the units is $179,900 with the median monthly cost, including mortgage, $1,357. The statistics don't differentiate between single-family homes and other type of owner-occupied housing.
MaineHousing programs have income limits that range from $95,300 for a one- or two-person household ($109,590 for a household of at least three) in the York County towns of Berwick, Eliot, Kittery, South Berwick and York, to $72,600 ($83,450 to larger households) in many of the state's central, western and northern counties.
In 2018, the First Home Loan program helped nearly 1,200 Mainers buy a home, representing $160 million in total loan amount, according to MaineHousing.
So far In 2019, the program has assisted nearly 850 individuals and families representing approximately $115 million in loan volume, and has a pending pipeline approaching 400 loans.
In addition, 97% of MaineHousing’s FHL borrowers have benefitted from the Advantage program option, which provides a $3,500 grant to be used for down payment and closing cost assistance, MaineHousing said.
MaineHousing was created by the Legislature in 1969 as the Maine State Housing Authority, and combines public and private financing to make housing more affordable to low- and moderate-income buyers. The agency provides low-cost financing, as well as support, information and advocacy.
Besides assisting buyers, MaineHousing also funds low- and moderate-income rental projects in the form of the 9% Low Income Housing Tax Credit, which it allocates.
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