As an independent state agency, MaineHousing uses public-private partnerships to provide significant public benefit to Maine while using little state funding.
By using private methods for public purposes, in a typical year we invest over $400 million (more than $1 million a day) in Maine's economy, with less than 3% of that from State resources dedicated to housing (from the Real Estate Transfer Tax).
Investments in privately owned housing
We raise funds from investors through bond sales (these bonds are a debt of MaineHousing and not the State of Maine) and federal grants, and do not receive state general fund money. The bonds we sell are tax-exempt and are known as mortgage revenue bonds. We use revenue from the bonds we sell to investors to make mortgages, and revenue from the mortgages to repay bond investors – and use the spread between the two to finance our operations (see How MaineHousing functions below).
Our investments are primarily in privately owned housing. We enable working families to purchase their first homes with affordable mortgages, finance development of privately owned affordable renting housing for working and low income families and seniors, and provide assistance to Maine's most vulnerable populations.
MaineHousing: Private methods for public purposes
MaineHousing was created by the Legislature in 1969 and is governed by a 10-member Board of Commissioners appointed by the Governor and confirmed by the Legislature. The agency director, also appointed by the Governor and confirmed by the Legislature, and the State Treasurer are ex-officio members.
The legislation enables us to take advantage of federal laws that allow states to raise private capital for public purposes. We have the authority to sell tax-exempt bonds and use the resulting capital to finance affordable housing.
How MaineHousing functions
Today we are a $2 billion financial institution with the ability to issue bonds, to accept federal program dollars on behalf of the State, and to pursue other funding consistent with our mission. That mission is to provide decent, safe, affordable housing to low and moderate-income Maine people consistent with their individual needs.
The tax-exempt bonds allow us to borrow funds at lower interest rates, which means we can loan the money as mortgages at lower interest rates for home purchases, development of affordable rental properties, home repairs, and energy improvements. We use revenue we receive from the mortgages to repay bond buyers, unlike government obligation bonds that taxpayers repay.
We function as Maine's housing finance agency and as a public housing authority for those parts of Maine without a local authority. This enables us to access federal programs to reduce housing costs.
Resources generated from bond lending (the difference between what we owe investors and what we earn on our mortgages) and fees paid by federal programs provide us with funds to pay our operating costs and staff. No state funds are used to pay our operating expenses or staff salaries.
Maine's housing needs
With incomes below the national average, the cost burden for home heating among the highest in the country, and one of the nation's oldest housing stocks, it is no surprise that Maine has a substantial housing need. This need has been aggravated by home prices and rents increasing faster than incomes. MaineHousing provides data on housing affordability by region. Learn more on our Housing Facts page.
We use our resources to finance programs that address a variety of Maine's housing needs.
- Housing development. We provide financing and financial incentives for private development of affordable rental housing for families, seniors, and persons with special needs. This both provides affordable rents and stimulates Maine's economy. Learn more
- Home buying assistance. We provide low fixed interest rate mortgages to first time homebuyers, reduced down payments, and other assistance to help make homeownership affordable for more Maine people. We also support homebuyer education classes to make homeownership a positive experience. Learn more
- Home improvement assistance. We offer programs to help with home improvement needs, including: low or no cost loans to repair or replace failed wells or septic systems, make heating, electrical, or structural repairs, and improve home accessibility; grants to make homes lead safe; and loans to repair homes damaged in a declared natural disaster. Learn more
- Rental assistance. Properties developed or rehabilitated with our financing offer affordable apartments to renters with lower incomes. Rental assistance also is provided in the form of federal Section 8 Housing Choice Vouchers to renters living in privately owned apartments. Learn more
- Energy assistance. We offer fuel assistance to vulnerable seniors and families using funds from the federal Low Income Home Energy Assistance Program (LIHEAP). We also offer home energy improvements such as home weatherization, heating system repair or replacement, and energy efficiency appliances that make homes more affordable for the long term and reduce the need for heating and other assistance. Learn more
- Homeless assistance. We provide financing for emergency shelters, supportive housing, and other housing options for people who are homeless. We also work with homeless service providers and other organizations toward a shared goal of preventing and eliminating homelessness in Maine. Studies have shown it is less costly for taxpayers to provide housing for homeless households than it is to allow them to continue as homeless. Learn more
Contributions to Maine
More than 100,000 people benefit from MaineHousing programs and services each year. These benefits include affordable mortgages, affordable rental housing, heating assistance, improvements to make homes safe and warm, and housing for people who are homeless or have special needs.
Financing of affordable housing is our primary mission, but we contribute more than just housing to Maine's economy. Other benefits include:
- Growing Maine's economy. The sale, improvement, or building of housing provides employment in a variety of businesses. An estimated 50,000 Maine people (10% of the workforce) work in housing-related professions. We also bring in new capital from outside the state from the bonds we sell (typically over $150 million annually) and from federal programs for rental assistance, heating assistance, and for affordable housing development. The federal dollars flowing to Maine people via MaineHousing typically exceed $125 million each year.
- Improving Maine communities. We provide incentives to develop new affordable rental housing in or near downtowns and close to transportation and services where it can contribute to community revitalization. We have saved many historic schools, mills, and other properties by financing their conversion to affordable housing. Leveraging existing public infrastructure benefits other agencies and Maine's economy.
- Investing in cost-effective energy efficiency. We were the first housing finance agency in the country to adopt green building standards for all new or substantially rehabilitated housing we finance, making the housing 30% more energy efficient – which means it will be more cost-effective to operate for the long term. Another initiative funds weatherization of low-income homes (more than 4,000 over two years) to make every fuel dollar go further. We also encourage cost-effective energy improvements in home mortgages by providing a coupon for a free home energy audit that allows borrowers to include the cost of home energy improvements and the home purchase in the same loan. We are leading the nation in finding a method to convert energy savings from weatherization to revenue to finance additional energy improvements.
- MaineHousing remains a strong financial institution. Even with the turmoil in the national financial and real estate market, MaineHousing remains a strong financial center. Our bonds are highly rated by the national bond rating agencies, and offer tax advantages to Maine investors. Our mortgage portfolios remain strong, with foreclosure rates below state and national averages.