Maine First-Time Homebuyer Assistance Programs

People have been clamoring for a piece of Maine. In 2024, it made Atlas Van Lines’ Annual Migration Patterns Study as one of the top 10 most popular states to move to.

While there’s a lot of competition out there for first-time homebuyers, there are also several assistance programs available to help level the playing field. The Maine State Housing Authority, known as MaineHousing, connects first-time buyers with loan options and assistance programs to help make homeownership more affordable. In Maine, you’re considered a first-time buyer if you haven’t owned a home in the past three years.

Maine first-time homebuyer programs

MaineHousing offers 30-year mortgages with low fixed rates and little to no down payment. For first-time homebuyers, options include:

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 you only need to repay when you sell the home or pay off the first mortgage.

• Requirements
  

  • 640 minimum credit score
  • Must be a first-time homeowner or not have owned a home in three years
  • Must meet MaineHousing income limits, which vary by area and household size and range from $97,900 to $146,625
  • Must meet purchase price limits, which vary by area and household size and range from $500,000 to $750,000.
  • Must complete a homeowner education course

• Pros and cons
  

  Pros

  • More affordable interest rates
  • Comes with unemployment payment protection
  • Open to single-family homes, two- to four-unit owner-occupied apartment buildings, condominiums and mobile homes

  Cons

  • Somewhat limited number of participating lenders (less than 50)

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.

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 been within a war zone, or have been honorably discharged from military service. National Guard members who meet the requirements are eligible, as well.

• Requirements
  

  • Must meet military service requirements
  • Must purchase a primary residence
  • 640 minimum credit score
  • Must meet MaineHousing income limits, which vary by area and household size and range from $97,900 to $146,625
  • Must meet purchase price limits, which vary by area and household size and range from $500,000 to $750,000

• Pros and cons
  

  Pros

  • Interest rate reduction
  • Open to first-time and repeat homebuyers
  • Open to single-family homes, two- to four-unit owner-occupied apartment buildings, condominiums and mobile homes

  Cons

  • Somewhat limited number of participating lenders (less than 50)
  • Only open to qualified active duty, veterans, and retired military personnel

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 no more than 20 years old 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.

• 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
  • Must meet income limits, which vary by area and household size
  • Must meet purchase price limits, which include $200,000 for leased land and $250,000 for owned land

• Pros and cons
  

  Pros

  Cons

  • Higher interest rate
  • 5 percent down payment required, with at least 3 percent contribution from own funds

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 do not 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. You cannot use the loan for improvements such as 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.

• Requirements
  

  Must meet MaineHousing First Home Loan Program requirements

• Pros and cons
  

  Pros

  • More affordable interest rates
  • Includes home purchase funding and home improvement costs in one loan

  Cons

  • Doesn’t cover the cost of labor if borrower completes the work
  • Up to $375 administrative fee

   

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.

• Pros and cons
  

  Pros

  • No second mortgage or increase in loan amount
  • Can be used for down payment, closing costs, and prepaid escrow expenses
  • Open to a variety of property types
  • Required 1 percent personal contribution may be from gift funds

  Cons

  • Somewhat limited number of participating lenders (less than 50)

Other Maine homebuyer assistance programs

First Generation Program

MaineHousing also offers a First Generation mortgage for individuals who have never lived in a home that was owned by their biological parents or legal guardians. These mortgages are also available to applicants who may have spent time in foster care as a child.

The program provides fixed-rate mortgages, as well as down payment and closing cost funds. Applicants who complete education requirements can receive $10,000 in closing cost funds.

• Requirements
  

  • Must be a first-generation homeowner
  • Must combine the assistance with a MaineHousing loan program
  • Must take a financial literacy and a housing education course
  • Must make a minimum borrower contribution of 1 percent of the loan amount
  • Must meet household income and purchase price limits, which vary by household size and location
  • 640 minimum credit score

• Pros and cons
  

  Pros

  • Can be used for down payment and closing costs
  • Comes with unemployment payment protection
  • Open to single-family homes, owner-occupied two- to four-unit apartment buildings, condominiums and eligible mobile homes

  Cons

  • Must make a 1 percent contribution from own funds
  • Somewhat limited number of participating lenders (less than 50)

Other Maine first-time homebuyer loans

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.

• FHA loan: An FHA mortgage is insured by the Federal Housing Administration (FHA) and offered by approved third-party lenders. These loans typically include low credit score and down payment requirements.
• VA loan: Designed for active-duty service members, veterans and surviving spouses, VA loans, which are guaranteed by the U.S. Department of Veterans Affairs, have no down payment and no private mortgage insurance (PMI) requirements. The rates on VA loans are also very competitive.
• USDA loan: The USDA home loan program provides low- and moderate-income homebuyers a path to homeownership. The program is designed for homebuyers in designated rural areas who don’t meet conventional mortgage requirements.

Get started

If you’re a first-time homebuyer interested in living in Maine, start your homebuying journey by researching the assistance programs available and their eligibility requirements. Understanding your options can make the purchase process easier and less expensive.

Once you have a handle on the 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 option that best fits your situation. Here are some important next steps to take on your own:

• Explore other first-time homebuyer programs by state