MaineHousing First Home Loan Program

MaineHousing’s First Home Loan Program provides first-time homebuyers with 30-year, fixed-rate mortgages, either as a conventional, FHA, VA or USDA loan. There is little to no down payment required with many of these options. You can couple this mortgage with MaineHousing’s down payment and closing cost assistance program, dubbed “Advantage,” to maximize savings.

The First Home Loan Program offers zero- and two-discount point interest rate options, with each point equaling 1 percent of the amount borrowed. You can pay for points upfront to lower your interest rate.

First Home Loan mortgages also include payment protection in case you lose your job. Through Maine HOPE (“Home Ownership Protection for unEmployment”), borrowers in good standing who become unemployed can receive an advance of up to four mortgage payments, including taxes and homeowners insurance. The payments are packaged as a no-interest junior lien that only needs to be repaid when the home is sold or the first mortgage is paid off.

Borrower requirements:

• 640 minimum credit score
• Must meet MaineHousing income limits

Property requirements:

• Must be a single-family home, two- to four-unit owner-occupied apartment building, condominium or mobile home
• Must meet MaineHousing purchase price limits

Since MaineHousing mortgages are financed with mortgage revenue bonds, you might be subject to a federal recapture tax. That means if you sell your home within nine years of buying it and make a profit on the sale, and your income has risen significantly, the feds could tax a portion of the money you saved by having a MaineHousing mortgage. As of 2013, those who do pay this tax might qualify for a reimbursement from MaineHousing.

MaineHousing Salute ME

Through MaineHousing’s Salute ME program, active-duty, veteran and retired military members can qualify for a 0.5 percent discount on a First Home 30-year fixed-rate mortgage. As with the First Home loan program, borrowers must meet income and purchase price limits to qualify.

The agency waives the first-time homebuyer requirement for participants in the program, but borrowers must have either remained on active duty for 180 days or be within a war zone, or have been honorably discharged from military service. National Guard members who meet the requirements are eligible, as well.

MaineHousing Self-Insurance for Mobile Homes

MaineHousing’s Self-Insurance for Mobile Homes option offers mortgages for first-time homebuyers of a single- or double-wide home on owned or leased land. Through this program, the agency self-insures mobile home loans with a loan-to-value (LTV) ratio between 80 percent and 95 percent. In exchange, borrowers pay a higher interest rate, rather than pay for mortgage insurance.

Borrower requirements:

• 5 percent down payment (at least 3 percent must come from the borrower’s own funds)
• 640 minimum credit score
• Maximum 43 percent debt-to-income (DTI) ratio

Property requirements:

• Must be a permanently attached mobile home built within the last 20 years (an unattached mobile home on leased land could qualify)
• Must not use more than 15 percent of the property for business purposes
• Maximum $200,000 purchase price

MaineHousing Purchase Plus Improvement Program

MaineHousing’s Purchase Plus Improvement (PPI) Program allows you to finance a home purchase and repairs with a single mortgage, provided the cost of the home and the repairs doesn’t exceed First Home Loan purchase price limits.

The PPI loan allows for $500 to $35,000 in financing for certain kinds of home improvements, including adding a garage or making energy-efficiency upgrades. The loan cannot be used for improvements like adding a deck or swimming pool. The work must begin within 30 days of closing the loan and be complete within six months (180 days) of closing.

MaineHousing Indian Housing Mortgage Insurance Program

For Native Americans living on tribal reservations, it can be challenging to obtain a mortgage because of land-use or ownership restrictions that can make it more difficult to insure a loan. While not a loan in and of itself, MaineHousing’s Indian Housing Mortgage Insurance Program provides mortgage insurance for loans for property on tribal land, which removes some of the lending risk. The eligibility requirements for this program include:

• Borrower must appear on the annual census of the Passamaquoddy Tribe or Penobscot Nation, and property must be on the Penobscot Tribal Reservation, the Indian Township Passamaquoddy Reservation or the Pleasant Point Passamaquoddy Reservation
• Borrower must meet credit, DTI ratio and employment requirements
• Financing must be to either buy or improve an existing or manufactured home or build a new home (or, for current homeowners, to refinance to a lower rate)
• Borrower must have funds for the down payment and closing costs

Maine down payment assistance

Down payment assistance is available to MaineHousing borrowers who need help covering these costs.

MaineHousing Advantage

Through the MaineHousing Advantage down payment and closing cost assistance program, qualifying homebuyers can receive up to $5,000 in cash toward a down payment or closing costs. To be eligible, the borrower:

• Must combine the assistance with a MaineHousing loan program (zero-point program only)
• Must complete a homebuyer education course
• Must contribute at least 1 percent of the loan amount to the purchase; the funds can be from a gift

Other first-time homebuyer loan programs

In addition to MaineHousing programs, government mortgages such as FHA, VA and USDA loans offer terms and rates that can make it easier for first-time homebuyers to purchase a home. Your mortgage lender can point you to other specialized loans and assistance options, as well. Bankrate’s first-time homebuyer loans and programs guide can give you more insight into what other programs might be available to you.

Get started

Once you have a handle on the first-time homebuyer loan and down payment assistance programs out there, an approved MaineHousing mortgage lender can guide you through the application process and help you find the options that best fit your situation. Terms and interest rates vary by lender, so it’s important to compare loan options carefully.