Maine first-time homebuyer grants and down payment assistance (2026)

MaineHousing’s one channel: the First Home Loan and its options

A First Home Loan requires that you have had no ownership interest in your principal home during the last three years. The loan can carry FHA (3.5% down), VA or Rural Development (0% down) insurance, or no insurance with 20% down. A mobile home self-insurance option takes 5% down ⁠⁴. Arch MI private mortgage insurance with 3% down is offered only as a pilot in Bangor, Lewiston, Auburn, Portland, South Portland and Westbrook ⁠¹⁠⁴.

On the rate sheet effective Oct. 1, 2026, the 0-point First Home rate was 5.950% (APR 6.495%) with or without Advantage. The 2-point rate was 5.450%, but it cannot be combined with Advantage ⁠³. The rate you get is the one in effect when your lender reserves the loan, and a loan can be reserved only after you sign a purchase and sale agreement. MaineHousing locks the rate free for 90 days on existing homes and 210 days on new construction ⁠⁸.

Every loan includes Maine HOPE, which can advance up to four payments if you lose your job, as a 0% lien repaid when you sell or move out. Purchase Plus Improvement can add $500 to $35,000 of repairs to the loan ⁠¹.

Why Advantage works like a $5,000 grant

MaineHousing does not call Advantage a grant, but its Feb. 17, 2026 summary sheet lists no rate add-on, no loan increase, no second mortgage and no repayment terms ⁠². The money can pay for the down payment, closing costs and prepaid escrow, as the mortgage insurer allows ⁠². On an FHA loan it can cover the 3.5% down payment. On a self-insured mobile home loan it can cover up to 2% of the 5% down payment ⁠⁴.

The rules:

• 1% borrower contribution. You must put at least 1% of the loan amount into the deal. It may be a gift, and the cost of your homebuyer class counts toward it ⁠¹⁠².
• No cash back. Any extra assistance goes toward the loan amount, and any principal reduction must be under $500 ⁠².
• No asset test. MaineHousing applies no liquid asset limit ⁠².
• Multi-unit buyers. Multi-Unit Advantage pays $8,000 for two units, $11,000 for three and $14,000 for four. You also need an approved landlord education course ⁠¹.

Salute ME borrowers can use Advantage too ⁠⁷.

First Generation: $10,000 for buyers whose families never owned

The First Generation Program is MaineHousing’s largest piece of assistance. It is a $10,000 grant credited at closing, and it takes the place of Advantage ⁠⁶. It also cuts the First Home Loan base rate by 1%. On Oct. 1, 2026, that rate was 4.950% (APR 5.512%) ⁠³.

Its eligibility test is narrower than the regular three-year rule ⁠⁶:

• Every borrower must be a “true” first-time buyer who has never owned a principal residence anywhere.
• At least one borrower must also have never lived in a home owned by their biological parents or legal guardians, or have been in foster care at some point as a child.

You must finish a MaineHousing-approved financial literacy class before you take the hoMEworks or MaineHousing-approved homebuyer education class. You also make the same 1% minimum contribution ⁠⁶. First Generation cannot be combined with Salute ME, the 2-point option or the Pre-1976 Mobile Home Replacement Initiative. A self-insured mobile home loan adds 1% to the First Generation rate ⁠⁶.

2026 income and price limits by Maine housing market area

MaineHousing sets limits by HUD metro area, then by county, with one row for the rest of the state. They apply equally to the First Home Loan, First Generation and Salute ME ⁠³⁠⁵.

Scroll the table sideways to see every column.

Two- and three-unit caps run $575,000 to $625,000 in the lower areas and $625,000 to $675,000 in the higher ones. New construction is limited to single-family homes and new mobile homes at the 1-unit cap. Self-insured mobile homes are capped at $250,000 on owned land and $200,000 on leased land everywhere. Income limits may be higher in federal targeted areas ⁠³.

Find your town on MaineHousing’s limits page; outside the named areas and counties, use the “All Other” row. If your loan uses FHA, VA or RD insurance, the lender must apply whichever income or loan limit is stricter ⁠⁸. Lot size is capped at 3 acres for an existing home and 1 acre for a new one, unless the land is worth 30% or less of the appraised value ⁠⁴⁠⁸.

Credit and debt limits: 640 score, 45% total debt and the HMP-54 exception

MaineHousing’s Quick Guide sets a 640 minimum credit score and a 45% maximum total debt ratio. The housing payment ratio is 33% of income, or whatever automated underwriting approves ⁠⁴. Exceptions are possible. An underwriter may accept a score below 640 or a total debt ratio above 45% on loans with compensating factors. The underwriter must send an Underwriting Risk Assessment form (HMP-54) to MaineHousing at least three business days before closing ⁠⁴. The private mortgage insurance pilot allows no exception ⁠⁴.

Veterans, recapture tax and the missing tax credit

Salute ME is for borrowers who are on active duty, were honorably discharged, or served 180 days of active duty or in a war zone. National Guard members who meet that test are eligible. It cuts the 30-year rate by 0.50% ⁠⁷. Salute Home Again waives the three-year rule for veterans who have owned before. You must not have had a bond-financed mortgage before and must sell your current home by closing. You will need a DD-214 or a Leave and Earnings Statement ⁠⁷⁠⁸.

Because First Home Loans are funded with mortgage revenue bonds, you could owe federal recapture tax if you sell within nine years at a gain and your income has risen above IRS limits. The tax is capped at 6.25% of the original loan or 50% of the gain, whichever is less ⁠⁹. MaineHousing reimburses recapture tax paid on loans closed on or after Jan. 1, 2013. You apply in the calendar year after the sale, with IRS Form 8828, proof of payment and the closing disclosure ⁠⁹.

Mortgage credit certificate: MaineHousing does not list one. Its homebuyer program page names four programs: First Home, First Generation, Salute ME and the Pre-1976 Mobile Home Replacement Initiative. Its October 2026 rate sheet has no MCC ⁠¹⁠³. If a lender advertises a Maine MCC, call the Homeownership Department before you count on it.

hoMEworks classes: which ones MaineHousing accepts

Homebuyer education is required if you use Advantage or First Generation. MaineHousing recommends it for all borrowers ⁠⁴. Maine hoMEworks runs an 8-hour live class statewide, on evenings and weekends, for a small charge. Certificates are valid for two years ⁠¹⁰. Providers on the rate sheet include Avesta Housing and CEI in Portland, Penquis in Bangor, and community action agencies from Presque Isle to Biddeford ⁠³.

The online alternative is the fee-based eHome America course (6 to 10 hours plus a one-hour session with a hoMEworks educator) ⁠¹¹. MaineHousing accepts it for Advantage ⁠¹¹. Some city or lender programs that require “HUD-approved” education may not ⁠¹⁰⁠¹¹. Each borrower who will share the mortgage must finish the course before closing. Online students each need their own certificate ⁠¹¹.

City help in Bangor and Lewiston-Auburn

Maine’s local programs are small, federally funded and run by city staff:

• Bangor Homebuyer Program. This program uses federal CDBG money and is open only to income-eligible buyers inside city limits. The current application says the money can pay for a down payment, closing costs, principal reduction, rate buydown points or upfront mortgage insurance. It waives the three-year first-time rule for veterans and military members, K-12 educators and EMS personnel. It requires HUD-certified homebuyer education ⁠¹³. The city budgeted $72,776 for down payment and closing cost assistance in FY2023 and FY2024 ⁠¹⁴. The application does not list award amounts, and its income table is dated May 18, 2023. Call (207) 992-4280 for current figures ⁠¹³.
• Auburn-Lewiston Consortium Homebuyer Loan Program. The newest guidelines the cities post are dated Aug. 13, 2013. They cover households below 80% of area median income with no more than $15,000 in liquid assets. You save at least $25 a month for 6 to 36 months, and the city matches $2 for every $1 you save, up to $5,250. Half the match is a grant and half a forgivable loan ⁠¹⁵. A separate 0% HOME loan of $1,000 to $15,000 is repaid monthly from closing, and you must live in the home 5 to 15 years ⁠¹⁵. Neither city posts current funding or status; confirm with community development staff.

From pre-approval to closing with a MaineHousing lender

1. Check the limits first

   Find your town’s row in the Oct. 1, 2026 table, then compare your gross household income and target price ⁠³.

2. Pick a MaineHousing lender

   About 40 lenders are approved. The rate sheet shows which insurance each one handles: some offer only RD loans, others FHA, VA and RD ⁠³⁠¹². Ask whether you qualify for Advantage, First Generation or Salute ME.

3. Take the classes early

   First Generation buyers finish a financial literacy class before the hoMEworks class. Book a live hoMEworks class or the eHome America course so your certificate is ready before closing ⁠⁶⁠¹⁰.

4. Gather documents

   Besides normal loan paperwork, MaineHousing requires three years of federal tax returns for every borrower and title holder. You also sign an applicant certification and closing affidavit, and veterans provide a DD-214 or LES ⁠⁸.

5. Sign a purchase and sale agreement, then reserve

   Your lender reserves the loan with MaineHousing and locks the rate for 90 days, or 210 days for new construction ⁠⁸.

6. Bring your 1% and close

   Advantage or First Generation money is credited at closing. Excess assistance reduces the loan, not your cash ⁠²⁠⁶.

7. Keep your closing file

   You need it for a Maine HOPE claim or a recapture tax reimbursement after a sale within nine years ⁠¹⁠⁹.

If a lender declines you, ask about an HMP-54 exception or apply with another MaineHousing lender ⁠⁴. Other states’ programs are compared on the first-time homebuyer grants page. For heating help after you move in, see Maine energy and utility assistance.