The Evolving Home Buying Landscape in Maine

Dated: August 29 2023

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The Evolving Home Buying Landscape in Maine


The scenic beauty of Maine has long attracted homebuyers from all walks of life. However, if we trace the home buying process in Maine over the past decade, not much has changed—except for the rising home prices that challenge many residents.

The Changing Landscape: Home Prices in Maine

For the average resident or family in Maine, the dream of owning a home has become a steep mountain to climb. The surging home prices have caused many to continue renting instead of taking the homeownership plunge.

Debunking Down Payment Myths

Many first-time homebuyers harbor misconceptions about down payments. They believe they need to put down a hefty amount, often 10-15% of the home's value. In reality, there are several loan programs—like the FHA or the rural development style loan—that require minimal to no down payment. These programs are designed to give first-time homebuyers an edge.

Where to Live in Maine: The Cold Truth

One of the first pieces of advice I offer those starting their home journey in Maine is to research where exactly they want to live. While the state is undeniably beautiful, many aren't prepared for its cold temperatures. Several newcomers, unaware of the chilling winters, end up selling and leaving within a couple of years.

The Reality of Down Payments in Maine

Yes, there are circumstances where buyers can acquire a home with little to no down payment, particularly with a rural development style loan or an FHA loan. While the national average hovers between 0-3% for FHA loans and 10-20% for conventional loans, some banks in Maine are now offering as low as 1% for conventional loans.

Down Payments and Mortgages

A larger down payment means a lower principal amount on your loan. For instance, if you put down $40,000, that's $40,000 less you're paying interest on. Additionally, some lenders might offer reduced interest rates for larger down payments as it signifies a less risky loan.

First-Time Homebuyer Programs in Maine

Maine boasts of a range of programs like the rural development loan, FHA loans (including those tailored for rehabbing and flipping houses), and veteran loans. One notable advantage of these programs is the rebates available for attendees of first-time homebuyer classes.

The Flip Side: Drawbacks of Certain Loans

While loans like FHA and rural development loans make homeownership accessible, they come with strings attached. These loans often result in higher monthly payments and increased interest rates over the loan's lifespan. Plus, they mandate the purchase of PMI (Private Mortgage Insurance), adding to the buyer's expenses.

Hidden Costs: Maintenance and Repairs in Maine

Maine's property landscape is dotted with older homes that often need significant maintenance and repairs. While inspections are critical, they don't always catch every issue. Many first-time buyers get caught off guard by unexpected repair costs soon after purchasing. Hence, it's crucial to budget for potential maintenance and repairs.

Navigating Down Payments: Risks and Rewards

Opting for a larger down payment can reap benefits like lower interest rates and monthly payments. However, in my experience, many in Maine prefer smaller down payments to keep some cash reserves. A minimal down payment might stretch your budget, so it's imperative always to have a financial cushion for emergencies.

Creative Ways to Save for Down Payments

Some innovative ways I've seen people save include investing in stable stocks, setting aside a fixed amount monthly, or even seeking financial advice. Two resources worth consulting are Tom Evans at Acadia Lending in Portland and Kennebec Valley Savings.


Maine offers a unique blend of challenges and opportunities for homebuyers. With proper research, financial planning, and understanding of the local market, the dream of owning a home in this picturesque state is very much within reach.

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