Maine First-Time Home Buyer: 2025 Programs and Grants

What to know about buying a house in Maine

If you are a Maine first-time home buyer, you can expect a variety of assistance designed to make homeownership more affordable. This can include things like special mortgages and home buyer education classes.

If you are eligible, the state may also provide down payment assistance. This can supplement your savings, allowing you to buy a home sooner than you thought possible.

In this article (Skip to ...)

• ME home buyer overview
• Home loan options
• ME home buyer programs
• First-time buyer grants
• Buying in Maine’s cities
• Resources
• ME mortgage rates

Maine home buyer overview

The median home sale price in Maine was $415,200 in September 2024. This increased 5.7% year-over-year, according to Redfin.

While Maine’s real estate prices are lower than the national average, housing inflation at that rate can still cause problems for some first-time buyers. Many homes in desirable areas will also cost more than the national average.

Luckily, the Pine Wood State offers plenty of help to those wanting to purchase their first home. Read on for more information about home buyer education classes and homeownership programs available to Maine first-time home buyers.

Maine home buyer stats

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Maine

If you’re a first-time buyer in Maine with a 20% down payment, you can get a conventional loan with a low interest rate and no private mortgage insurance (PMI). The same goes for buyers anywhere in the nation.

Of course, few first-time buyers have saved a 20% down payment. But the good news is that you don’t need one. Maine home buyers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans and active-duty service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• MSHA mortgage: You might be able to get one of those with “little or no down payment” plus help with your closing costs. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on your mortgage loan, you could get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Maine first-time home buyer programs

Maine State Housing Authority (MSHA), also known as MaineHousing, assists low- and middle-income individuals and families by providing affordable and high-quality housing. It offers an assortment of programs and services, such as rental assistance, homebuyer education, low-interest mortgage loans, and energy efficiency upgrades.

MSHA’s primary product for first-time home buyers is the First Home Loan. This provides competitive mortgage rates as well as payment protection in the event that you become unemployed.

MainHousing First Home Loan Program

The MaineHousing First Home Loan program can be used in conjunction with a government-backed FHA, VA, or USDA mortgage, and with conforming loans in some areas. MSHA says, “There are options with little or no down payment required, and if you still need help with the cash for closing costs, we also offer a down payment and closing cost assistance option called Advantage.” We’ll get into the details of that below.

As is usual with state first-time home buyer programs, you have to choose a lender from a list⁵ of more than 40 approved by the MSHA. And there are a few qualifying criteria to be aware of:

• You’ll need to have a credit score of 640 or higher
• There are caps on household income. These income limits vary by household size and your county or city, though the website says that “most Maine households are income-eligible for the program”
• You must meet MainHousing purchase price limits
• The property must be a single-family home, condominium, mobile home, or 2-4 unit owner-occupied building.

And, as with any mortgage program, you need to show that you can comfortably afford the monthly mortgage payments.

MaineHousing Salute ME and Salute Home Again

If you’re a veteran or an active-duty military service member wishing to buy your first home in the state, you may qualify for an additional discount on your mortgage rate of 0.25%. To qualify for this assistance, you must use a Maine Housing First Home Loan and meet both the income and purchase price limits.

MaineHousing Self-Insurance for Mobile Homes

Those wishing to finance a mobile home may be able to take advantage of the authority’s mobile home self-insured option. For first-time home buyers of a single- or double-wide home on owned or leased land, MaineHousing’s Self-Insurance for Mobile Homes will provide affordable mortgages. Through this program, the agency self-insures mobile home loans with loan-to-value (LTV) ratios ranging from 80% to 95%. Borrowers pay a higher interest rate in exchange for not having to pay for mortgage insurance.

Pre-1976 Mobile Home Replacement Initiative

If you’re replacing a mobile home purchased before 1976 with a new Energy Star-certified manufactured home, this may be the MaineHousing program for you. This assistance program follows similar guidelines as the agency’s other home loans. So, check with a participating lender to see if you qualify.

MaineHousing Purchase Plus Improvement Program

The MaineHousing Purchase Plus Improvement (PPI) Program lets you pay for a home purchase and repairs with a single mortgage, as long as the home and repairs cost don’t exceed the First Home Loan purchase price limits.

The PPI loan provides financing ranging from $500 to $35,000 for specific types of home improvements, such as adding an extension or improving energy efficiency. The loan cannot be used for luxuries such as installing a swimming pool. The work must start within 30 days of the loan closing and be finished within six months (180 days).

MaineHousing Indian Housing Mortgage Insurance Program

Because land-use or ownership restrictions make it more difficult to insure a loan, many Native Americans living on tribal reservations encounter difficulty obtaining a mortgage. MaineHousing’s Indian Housing Mortgage Insurance Program mitigates some of the risks of lending money for a property on tribal land.

Eligible borrowers must meet a handful of qualifying criteria, so it may be best to speak with a MaineHousing-approved lender.

Maine first-time home buyer grants

MSHA says it can offer down payment assistance to buyers who opt for one of its homeownership programs.

MaineHousing Advantage Down Payment Program

Borrowers who fund their home purchase through any of the MaineHousing loan programs may be eligible for up to $5,000 in cash to use towards their down payment, closing costs, and any prepaid escrow expenses.

Assistance comes in the form of a grant — rather than a second mortgage — but homeowners may need to repay any money borrowed if the home is sold or refinanced. The Authority’s website is sparse on details, but its downloadable guide has some information.

• Qualifying borrowers must provide at least 1% of the loan amount to the home purchase, but this contribution can come from gift funds
• Buyers must complete a home buyer education class

To learn more, contact the MSHA at (800) 452-4668 or (207) 626-4600. Alternatively, you could contact one of the lenders on the authority’s approved list and ask an agent.

MaineHousing: Multi-Unit Advantage

For a one- to four-unit property, this program offers closing cost and down payment assistance per unit. This is how much you will be able to get:

• 1 unit: $5,000
• 2 units: $8,000
• 3 units: $11,000
• 4 units: $14,000

The eligibility requirements, income restrictions, and purchase price caps are the same as for the First Home. You must complete both a landlord education course and a home buyer education course, and contribute at least 1% of the loan amount.

Explore other down payment assistance options

Keep in mind that MSHA’s down payment assistance program may not be the only one operating in your area. Many cities, counties, and nonprofit organizations offer their own DPA options for first-time buyers.

You can ask your loan officer or real estate agent for recommendations, or do an internet search for "[your city or county] down payment assistance.”

Buying a home in Maine’s major cities

It’s a mixed picture for first-time home buyers in Maine’s three biggest cities.

Portland is expensive. Lewiston is more affordable but has seen faster home price growth. Bangor may be the most affordable and it experienced significant home price deflation.

Whichever of those you wish to buy in, be sure to check out the city’s down payment assistance program(s). Because that could make a big difference to your homeownership timeline.

Portland first-time home buyers

The median home listing price in Portland was $649,000 in September 2024, according to Realtor.com. That dropped 3.1% year-over-year.

At those home prices, making a down payment in Portland might cost:

• $19,470 for a 3% down payment
• $129,800 for a 20% down payment

As far as we can tell, the only down payment assistance offered by the Portland Housing Authority (PHA) is a voucher program to help existing tenants of the authority transition into homeowners. To qualify, you must have been a PHA tenant for at least one year and meet other eligibility criteria.

If that’s not you, you should turn to the statewide MSHA program or look for other options in the area.

Lewiston first-time home buyers

The median home listing price in Lewiston was $299,500 in September 2024, according to Realtor.com. That increased 8.1% year-over-year.

At those home prices, making a down payment in Lewiston might cost:

• $8,985 for a 3% down payment
• $59,900 for a 20% down payment

The City of Lewiston has teamed up with Auburn to create a Homebuyer Loan Program. Here’s how it works: You open a savings account with the city and pay in at least $25 each month for a minimum of six months and a maximum of three years. The more and longer you save, the more you benefit — because when you’re ready to buy, the city will add to your savings, contributing $2 for every $1 you’ve saved. Obviously, all the money has to go toward your down payment.

Half the city’s contribution is an outright grant that you never have to repay no matter what. The other half is a forgivable loan with no monthly payments and a 0% interest rate. Providing you continue to own and occupy the home, that will be forgiven after:

• 5 years if the city’s contributed less than $15,000
• 10 years for city contributions between $15,000 and $40,000
• 15 years if it’s contributed more than $40,000

If you’re a good saver, that’s an attractive deal. You must have a low or moderate income no higher than 80% of the area median income to qualify.

Bangor first-time home buyers

The median home listing price in Bangor was $329,900 in September 2024. That increased 18.1% year-over-year, according to Realtor.com.

At those home prices, making a down payment in Bangor might cost:

• $9,897 for a 3% down payment
• $65,980 for a 20% down payment

The City of Bangor’s Community and Economic Development Department runs a down payment and closing costs assistance program. If you are eligible, the former can provide up to 50% of your minimum down payment but is capped at $5,000. The latter offers up to $3,000 in closing costs.

Those details were gleaned from the department’s application form for the programs. But there is little other information that we could find on the website. So call (207) 992-4280 to discover whether you’re eligible and what form the help takes: a grant, loan, or forgivable loan.

Where to find home buying help in Maine

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the state of Maine or the area they serve. In addition to our selection, the US Department of Housing and Urban Development (HUD) provides a list of city- and county-specific programs across Maine. These are as follows.

Statewide and regional first-time home buyer programs in Maine

• MaineHousing: Homebuyer programs, including down payment and closing cost assistance. Review both the agency’s purchase price limits and its list of approved lenders
• hoMEworks: Find a center nearest you that offers homebuyer classes
• Habitat for Humanity: Through volunteer labor, builds and rehabilitates houses for families in need
• U.S. Department of Agriculture Rural Housing: Homebuyer programs in rural communities

First-time buyer programs by city and county

• Augusta: Homeownership assistance programs
• Lewiston: Down payment assistance through its Homebuyer Loan Program
• Portland Housing Authority: Housing assistance via a citywide voucher program
• Bangor: Community and Economic Development Department

What are today’s mortgage rates in Maine?

You can check today’s mortgage rates in Maine here. Remember that interest rates differ depending on the borrower. Your credit score, loan program, down payment, and other factors play a role in determining your mortgage interest rate.

Compare mortgage loan quotes from at least three different lenders to ensure you get the best interest rate and upfront fees. Borrowers who do this frequently save thousands of dollars on their mortgages. Also, don’t forget to inquire about down payment and closing cost assistance from your lender. These programs have the potential to significantly accelerate your home-buying process.

¹Source: Redfin Maine Housing Market report

²Source: Experian.com study of 2022 and 2021 data

³Based on a review of the state's available DPA grants at the time this was written