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Governor Mills launches $10 million loan program to build affordable single-family homes


Governor Janet Mills on Wednesday launched a new state program that provides $10 million in forgivable home construction loans to help address Maine’s growing housing crisis, which worsened during the COVID-19 pandemic.

The loan program is part of $50 million that is earmarked for housing in the governor’s Maine Jobs & Recovery Plan, which is funded by the US federal bailout law and was approved by the legislature last year. . An additional $40 million for affordable housing programs will become available later this year when a second round of ARPA funding is released.

Loans issued through the Affordable Home Ownership Program will not have to be reimbursed if the developers respect the terms of their agreements. Offered by MaineHousing, the program is expected to support the construction of at least 150 affordable single-family homes.

A pandemic-triggered housing boom has compounded a housing shortage that already existed in many Maine communities. In December, the median sale price of a single-family home in Maine was $299,000, up 38% from the median price of $216,900 in February 2020, according to data from Maine Listings, an affiliate of the Maine Association of Realtors.

The shortage has significantly reduced the affordability of homes and apartments in Maine, hampering efforts by employers and communities to attract and retain workers and families, Mills said in a written statement.

“The pandemic has put home prices and the dream of home ownership beyond the reach of too many hard-working families,” Mills said. “By building more homes in Maine, more families will be able to realize the dream of having a safe and affordable place to live in the communities they love.”

According to MaineHousing, the new program is designed to promote the construction of “moderately priced” single-family homes by offering interest-free, repayable loans to offset the rising costs of acquiring land, labor and materials. . It is similar to a previous affordable housing estate loan program that was funded with $1 million in land transfer taxes. However, the new program significantly increases the loan amounts available to developers and the income levels of eligible buyers and requires more sustainable construction methods.

Developers who receive funding under the program must designate at least five homes per subdivision as “affordable homeownership units.” These new owner-occupied single-family homes will be sold to buyers who earn up to 120% of the area’s median income, among other criteria. The median household income in Maine is around $59,000. What would be considered an “affordable” home price would vary from state to state.

Developers must borrow between $300,000 and $1.4 million per subdivision to qualify. The maximum forgivable loan per affordable home is $70,000 in York, Cumberland and Sagadahoc counties, where the maximum home price will be $325,000; and $60,000 in the remaining 13 counties, where the maximum house price will be $275,000. The sale price of each house should remain “affordable” for 15 years according to MaineHousing criteria.

“MaineHousing greatly appreciates the attention and financial support the Mills administration and the legislature have put into developing a range of solutions for some of Maine’s most challenging housing issues,” said MaineHousing’s director, Daniel Brennan. “This program will help create desperately needed new affordable single-family homes, improving the lives and financial stability of Maine families.”

Developers participating in this program cannot access other grants through MaineHousing, but homebuyers can receive grants from other programs for mortgage payments and closing costs.

“Through this funding, Maine workers will be hired to build safer and more affordable housing, which is essential to the well-being of our communities,” said House Speaker Ryan Fecteau, D-Biddeford. “The U.S. bailout ensures states can use economic stimulus funds to address our biggest challenges, and housing supply is one of Maine’s biggest issues right now.”

Biddeford City Manager James Bennett, who is president of the Maine Municipal Association, said the program not only “help solve the housing shortage, but (also) meet the needs of low-income families, who are often not eligible for federal and state assistance.”

Mills noted two other housing initiatives that are part of the Maine Jobs & Recovery Plan: $1.5 million for housing navigator services to help people in housing crisis, based on a proposal from Rep. Victoria Morales, D-South Portland; and $10 million to support homeless shelters, based on a proposal from Rep. Kristen Cloutier, D-Lewiston.

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