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November 2, 2020

New homebuyers could get a $3,500 boost from MaineHousing program

A modern building that says MaineHousing on it with a sign in front that says Mainehousing main entrance Photo / Maureen Milliken MaineHousing has received a $500,000 grant from the Federal Housing Loan Bank of Boston, which will go to providing down payment and closing cost help to first-time homebuyers.

MaineHousing's first-time homebuyers program, which supports down payments and closing costs for new homeowners, has received a $500,000 grant from the Federal Home Loan Bank of Boston.

The grant is from the Helping to House New England program, which aims to expand affordable rental and homeownership financing across the six states. Grants are to the Housing Finance Agencies in each of them, and the program is making $15 million available from 2019 through 2021.

The Housing Finance Agencies can use the money to write down interest rates to 0%, support bond purchases or as a grant for the purpose of expanding affordable rental and homeownership initiatives. The money must support targeted initiatives that help individuals and families who qualify for loans under income guidelines for comparable loans. It can be used for things like short-term construction lending, workforce housing, deferred loan programs for homeownership, multifamily loan refinance and rental housing expansion, particularly in areas with job growth that exceeds the supply of rental units. 

MaineHousing is using the money to provide $3,500 in down payment and closing cost assistance to first-time buyers through its First Home Loan Advantage program.

As of Oct. 15, homeowners have bought 759 houses through MaineHousing's overall First-Time Homeowners program, with a total value of loans purchased at $110.9 million this year. There are 339 units in the pipeline at $49 million in value.

Those eligible for the program must not have held an ownership interest in a principal home within the past three years, though that requirement is waived for veterans, retired military or those on qualified active duty. Household income limits apply, though MaineHousing says that most Maine households are income-eligible.

Eligible homes include new and existing single-family homes, owner-occupied two- to four-bedroom apartment buildings, condominium and permanently attached mobile homes built within the last 20 years. While there are purchase price limits, depending on the county, most homes in the state are price-eligible, MaineHousing says.

Applicants to the program are required to have acceptable credit, with a credit score of at least 640; take a homebuyer education class before closing and must make a minimum borrower contribution of 1% of the loan. The cost of the homebuyer education class counts towards the 1% contribution.

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