Bond sale buoys MaineHousing loan rates

AUGUSTA – MaineHousing has sold $25 million of its housing bonds to continue its popular first-time homebuyer program at current interest rates.

The bond sale was timed to occur soon after new federal housing legislation, which contains tax advantages for people purchasing MaineHousing revenue bonds, became law. This helped MaineHousing obtain a good interest rate on its bonds, which translates to a lower interest rate for borrowers using a MaineHousing mortgage.

The current fixed interest rate on a MaineHousing mortgage can be as low as 5.25 percent (5.877 APR) with two points, or 5.55 percent (6.182 APR) with no points.

“Demand for our mortgages is up sharply,” said MaineHousing Director Dale McCormick.

“Through July our participating lenders have originated over $111 million in loans this year, significantly more than at that time last year. Lenders have been originating over $20 million in new loans a month for the past three months. Loan activity this June, traditionally our busiest month, is the highest it has been for more than five years.”

In addition to attractive interest rates, McCormick attributed the increase to MaineHousing’s expanded mortgage options that include a choice of points, a choice of mortgage repayment terms, and an expansion of the program so that qualified veterans may use the program even if they are not first-time homebuyers. Purchase Plus Improvement, which enables borrowers to include additional money for energy and other basic home improvements as part of their mortgage, is another popular option.

“The new options, combined with our low interest rates, low to no down payment, and down payment and closing cost assistance, are helping more Maine people than ever become homeowners,” she said.

Most borrowers using a MaineHousing mortgage make a zero to 5 percent down payment. If the down payment and closing costs are unaffordable, eligible borrowers may use Maine Assist, which helps pay those costs.

MaineHousing mortgages also come with payment protection for unemployment. The Maine HOPE program – Home Ownership Protection for unEmployment – may make four monthly mortgage payments on behalf of eligible MaineHousing borrowers.

McCormick noted there may be a pent-up demand for homes among first-time homebuyers, who have delayed taking action because of the turmoil in the mortgage markets. MaineHousing, a trusted public purpose agency that has been making mortgages for Maine families for over 30 years, is a safe option for them.

More than 30 participating lenders make MaineHousing loans available to new home buyers or people who have not owned a home in the past three years and to eligible veterans and active duty military. Most Maine households are income-eligible for a MaineHousing mortgage.

For information call 1-800-452-4668 (in-state only) or 626-4600.