Q. How do I apply for a MaineHousing mortgage?
A. Contact a MaineHousing lender – one of more than 30 participating local banks, credit unions or mortgage companies. Call or visit a MaineHousing lender to find out if you are eligible, and how much house you can afford. Find a MaineHousing lender near you .
Q. What is the lender’s role, and what is MaineHousing’s?
A. MaineHousing lenders meet with applicants to determine eligibility, take the mortgage loan application, and to process, underwrite, and close the loan on MaineHousing’s behalf. MaineHousing does not review the loan before closing.
After the loan closes, MaineHousing purchases the loan from the lender. MaineHousing also partners with lenders who will service your loan. MaineHousing does not sell its loans; your mortgage stays with us.
Q. What are the benefits of a MaineHousing mortgage?
A. Low, fixed interest rates
- No point and low point options
- Programs with little or no down payment
- Advantage option – down payment and closing cost assistance
- Purchase Plus Improvements (PPI) – includes energy and other home improvements all in one loan
- Maine HOPE, Home Ownership Protection for unEmployment
Q. What are the interest rate options?
A. MaineHousing offers both 0 point and 2 point rate options.
The zero point option is the most popular option, because the borrower needs less cash for closing.
If you choose the 2 point rate option, the points can by paid by either the homebuyer or the seller.
One “point” equals one percent of the loan amount. Paying points up front lowers the interest rate on the loan and results in a lower monthly payment.
Interest rates are subject to change. See current rates
Q. Is there a rate lock option, and how long does the rate lock last?
A. The interest rate the borrower receives is the rate in effect at the time the lender reserves the loan with MaineHousing – not the application date. A loan may be reserved only after a Purchase and Sale agreement has been executed.
MaineHousing offers a rate lock free of charge:
- Existing Properties: 90 days
- New Homes (including newly sited modular and mobile homes): 210 days
Q. What options are available with little or no money down?
A. A MaineHousing loan with mortgage insurance can help you buy a home with little or no down payment. Funds from ADVANTAGE may be used towards the required down payment. The amount of down payment depends on the mortgage insurance you choose:
- Rural Development (RD) 0%
- Department of Veterans Affairs (VA) 0%
- Federal Housing Administration (FHA) 3.5%
- MaineHousing self-insurance on mobile homes 5%
- Unity Guaranty Pilot (UG) 5%
Depending on market conditions, MaineHousing also may accept private mortgage insurance.
Q. What is Advantage down payment and closing cost assistance?
A. Advantage can provide $3,500 toward the cash you need for closing. Applicants choosing Advantage also must take a hoMEworks-approved homebuyer education class prior to closing and must make a minimum borrower contribution of 1% of the loan. The cost of the homebuyer education class counts towards the 1%.
Q. How does the PPI option work?
A. If you want to purchase a home that needs repairs, the PPI option offers financing for both the home purchase and repairs in the same loan. If you are eligible, you may include up to $35,000 for home improvements in your mortgage, as long as the cost of the home and repairs does not exceed program purchase price limits. Eligible improvements include energy efficiency, heating, plumbing, or electrical systems, home additions, and general repairs.
Q. What is the payment protection for unemployment?
A. MaineHousing mortgages come with Maine HOPE – Home Ownership Protection for unEmployment. If an eligible borrower loses their job, MaineHousing will make four mortgage payments for them. This amount would include the escrow portion of the payment as well. The amount paid is added on to the end of the mortgage, with no interest and no penalty.
Q. Who is eligible for a MaineHousing mortgage?
A. You may be eligible if you are one of the following:
- First-time homebuyer (defined as someone who has not had an ownership interest in their home during the last 3 years).
- Current or former owner of an unattached mobile home on leased land.
- Veteran or active duty military, so long as any home currently owned is sold by the date of closing.
Q. How can I be considered a first-time homebuyer if I have owned a home before?
A. According to current regulation, if you were a homeowner more than 3 years ago, but not during the past three years, you may be eligible as a first-time homebuyer. You may even be eligible if you co-own a home, so long as you have not lived in that home for the past 3 years.
Q. Are there any special requirements for mobile homes?
A. MaineHousing offers mortgages for mobile homes that are 20 years old, or less. The homes can be on either owned or leased land.
When MaineHousing self- insures the mortgage, there is a purchase price limit of $150,000 and the borrower pays a higher interest rate instead of mortgage insurance.
Q. If I own (or have owned) a mobile home, am I eligible for a MaineHousing mortgage?
A. If the mobile home is located on leased land or in a park, and the mobile home has not been anchored to the site, you may be considered a first-time homebuyer under federal regulation and you may be eligible for a MaineHousing mortgage.
If you have a mobile home on owned land (attached or unattached), or if you have a mobile home that is permanently attached to leased land, you are not eligible for a MaineHousing mortgage.
Q. If I am a veteran or active-duty military, but not a first-time homebuyer, am I eligible for a MaineHousing mortgage?
A. There is no first-time homebuyer restriction for veterans and active-duty military personnel. If you are a Veteran or on Active Duty and you meet the following eligibility criteria, you may be eligible for a MaineHousing mortgage even if you currently own a home. You may be eligible for a mortgage through the Operation New Home program if you:
- Remain on active duty or have been honorably discharged
- Have never received a mortgage financed with mortgage revenue bonds
- Will have sold your current home by the date of the MaineHousing closing
Q. What are the income and purchase price limits?
A. Although income limits apply, most Maine Households are income eligible for a MaineHousing mortgage. Limits vary depending on how many people live in your household and where you plan to buy your home. Similarly, most homes sold in Maine are purchase price eligible. Check your income and purchase price eligibility
Q. What types of properties are eligible?
A. Depends on the selected government guaranty or private mortgage insurer:
- Rural Development (RD) – New or Existing single family homes in eligible communities
- Department of Veterans Affairs (VA) – Existing1-4 Unit Single Family Homes, double-wide mobile homes on land no more than 20 years old and Condominiums.
- Federal Housing Administration (FHA) – Existing 1-4 Unit Single Family homes and FHA approved Condominiums.
- MaineHousing self-insurance (MHSI) – Single and double-wide mobile homes no more than 20 years old on leased or owned land.
- United Guaranty Pilot (UG) – 1 Unit Single Family homes located in the taxing communities of Bangor, Lewiston, Auburn, Portland or South Portland
Q. What is federal recapture tax and who pays it?
A. Because MaineHousing mortgages are financed with mortgage revenue bonds, they are subject to a federal recapture provision. This means that if you sell the home within nine years of purchase and you make a profit and your income has increased substantially, the federal government may claim in taxes a portion of the money you saved with a MaineHousing mortgage. Most MaineHousing borrowers who sell early pay no, or very little federal recapture tax. Learn more about recapture
Q. What are the guidelines to be eligible for Recapture Tax Reimbursement??
A. What are the guidelines to be eligible for Recapture Tax Reimbursement?
Your MaineHousing loan closed on or after January 1, 2013, your MaineHousing loan is outstanding at time of sale or disposition, you pay the recapture tax, and timely submit the required forms to MaineHousing. Learn more about Recapture reimbursement.
Q. Who must complete homebuyer education before loan closing?
A. Applicants who choose Advantage down payment or closing cost assistance must complete a hoMEworks homebuyer education class, but anyone thinking of buying a home can benefit from taking a class. Find a class near you
Q. If I choose RD, VA, or FHA mortgage insurance, and they have different guidelines for income and property eligibility than MaineHousing, which guidelines apply?
A. The lender must use the most strict guideline (e.g. the lower annual household income, the maximum mortgage loan amount).
Q. How much land can MaineHousing finance?
A. 3 acres for existing homes or 1 acre for new homes – although more acreage is allowed when local zoning requires a larger minimum lot size or when land value is 30% or less of total appraised value.
If the value of the land exceeds 30% of the overall appraised value, the appraiser will be asked to determine “excess land value.” If the appraiser finds excess land value of more than zero, the borrower must pay at closing an amount in cash equal to the excess land value. The down payment paid by the borrower can be counted toward payment for the excess land.
Q. Does MaineHousing require home inspections?
A. Although MaineHousing does not require home inspections, we highly recommend that homebuyers make a satisfactory home inspection a condition in the purchase and sales agreement when making an offer on a home. A home inspection provides valuable information on the condition of the home.
Q. What other documentation does MaineHousing require?
A. In addition to the standard documentation used by its lenders, MaineHousing requires:
- Borrower Affidavit
- Seller Affidavit
- 3 years of federal tax returns from each owner
- An income eligibility worksheet completed by lender
In addition to the above, veterans or active-duty military who are non-first-time homebuyers applying for the Operation New Home program must provide copies of discharge papers (DD Form 214) and/or a Leave and Earning Statement (LES).