MaineHousing lowers interest rate to encourage first-time homebuyers

By Ramona du Houx - March 9th, 2010 · 

MaineHousing has lowered its mortgage interest rates to help eligible first- time home buyers take advantage of the federal tax credit that is scheduled to expire on April 30.

MaineHousing is offering a 4.75 percent (5.36 percent Annual Percentage Rate), 30-year fixed rate loan with no points – a loan that also comes with MaineHousing’s Gift of Green. MaineHousing’s Gift of Green provides borrowers with a grant of $2,500 in down payment and closing cost assistance, and a coupon worth $500 for a two-part energy audit.

The new rates became effective March 2.

“We are trying to help Maine people who are on the fence about buying a home act while the federal tax credit still is available,” said Dale McCormick, Director of MaineHousing.

“This is an extraordinary opportunity,” McCormick added. “Borrowers can use our Gift of Green financial incentives of $3,000 to help access the federal First-Time Homebuyer Tax credit worth up to $8,000. If the homebuyer invests some of this in home energy efficiency improvements they may qualify for additional federal tax credits worth up to $1,500. The combination of financial incentives through the Gift of Green and federal tax credits could add up to as much as $12,500.”

Borrowers also can choose a 4.45 percent (5.24 percent APR) 30-year fixed rate loan with two points.

The new lower interest rates mean lower monthly payments, saving the average MaineHousing homebuyer thousands of dollars over the term of the loan. Homebuyers can find out how much a lower interest rate saves by using an online mortgage calculator available at www.mainehousing.org/homeloan.

While household income limits apply to MaineHousing mortgages, most Maine households are income eligible.

Potential borrowers interested in learning whether they are income eligible can use MaineHousing’s online pre-qualification tool to find out. The process takes about five minutes to complete, and eligible borrowers can print a prequalification certificate and take it to a MaineHousing lender. The tool is available at www.mainehousing.org/prequalification.

McCormick noted that people who have not owned a home in the past three years are considered first-time homebuyers and potentially are eligible for MaineHousing’s low fixed interest rates and the Gift of Green, as are active duty or retired military, and people buying a home in communities most affected by the closing of Brunswick Naval Air Station- whether they are first-time homebuyers or not.

MaineHousing offers its mortgages through more than 30 participating lenders statewide. Chris Pinkham, President of the Maine Association of Community Banks and John Murphy, President of the Maine Credit Union League encourage anyone who is considering buying a home to talk to a lender about whether they qualify.

“More people qualify for a MaineHousing mortgage than you might think,” Pinkham said.

MaineHousing mortgages come with payment protection for unemployment. If a borrower in good standing becomes unemployed, MaineHousing may help by making four mortgage payments.

“We are trying to do everything we can to make homeownership possible for Maine people,” McCormick said.

“With the new lower rates and down payment assistance, many more individuals and families will be able to purchase their own homes in 2010, and that’s good for Maine,” added Cindy Butts, CEO of the Maine
Association of Realtors.

For more information visit www.mainehousing.org/giftofgreen or call 1-800-452-4668 (voice) 1-800-452-4603 (TTY).
MaineHousing has designated the following person responsible for coordinating compliance with applicable federal and state nondiscrimination requirements and addressing grievances: Mary Darling, MaineHousing, 353 Water Street, Augusta, Maine 04330-4633, Telephone Number 1 800 452 4668 (voice in state only),(207) 626 4600 (voice), 1 800 452 4603 (TTY in state only),
or (207) 623 2985 (TTY).