First-Time Homebuyers in Maine Could See Student Debt Forgiveness

For many younger adults in Maine, buying a house seems nearly impossible. The ongoing affordable housing crisis has limited the options available to first-time home buyers, and the heavy burden of student debt prevents many people from saving enough money for a down payment. According to the Portland Press Herald, over 178,000 Maine residents (about 13.3 percent of the state population) have student loan debt, and the average Maine student graduates owing $33,500. Meanwhile, the statewide median sales price of a home is nearly $300,000.

But Maine may help to reduce that barrier in the near future. LD 1978, “An Act To Promote Home Ownership by Reducing Education Debt,” would create a Maine State Housing Authority program designed to forgive up to $40,000 in student loan debt for qualified first-time homebuyers. This is regardless of where the borrower studied or if they graduated.

“Too many of our young people who have worked hard to pursue their chosen profession – professions we desperately need – are saddled with high levels of student debt,” said Sen. Chip Curry of Waldo, lead sponsor of LD 1978. “This prevents them from purchasing their first homes and often forces them to leave Maine.”

To qualify, homebuyers must meet the income eligibility threshold that the MaineHousing’s First Home Loan Program uses and agree to live in their new home for at least five years.

Supporters of LD 1978 see the program as a means of easing the impact of student loans while also benefiting Maine’s economy:

“The situation with student debt is dire. With student loans, car payments, rent, utilities and other basic expenses, it is hard enough to make ends meet, let alone purchase a home,” said Senate President Troy Jackson. “With this program, we can make it easier for young people to create a meaningful and fulfilling life here. We’re counting on young people to fill workforce shortages, keep our heritage industries going and lead our state into the future.”

No person should be prevented from buying a home because they chose to pursue higher education. We applaud Senator Curry for introducing this incredible program and helping Maine’s young adults carve out a long-term future in our state.

Maine Legislature Pursues Affordable Housing Solutions

This legislative session, one of the biggest priorities for our lawmakers is addressing the growing housing crisis in Maine. 1 in 5 Maine renters pay more than half their income toward housing costs, and, for every family living in an affordable, federally subsidized unit, nearly three families are on a waiting list. Experts estimate that the state currently lacks about 20,000 affordable housing units.

The proposed plans to counteract the crisis vary. The Maine Jobs and Recovery Plan, for example, includes $50 million in financing for MaineHousing, which will go towards expanding housing options that are affordable to workers and their families to own or rent. Meanwhile, for those facing the strain of increasing property taxes, Governor Mills has proposed putting $7 million towards increasing the maximum benefit of Maine’s Property Tax Fairness Credit.

Perhaps one of the largest obstacles in the push for affordable housing are zoning laws, which can prevent building houses and other dwellings on certain land or on one’s own property. That’s why House Speaker Ryan Fecteau introduced LD 2003. This bill works off the recommendations of the Commission To Increase Housing Opportunities in Maine by Studying Zoning and Land Use Restrictions, created last year by the Legislature.

WATCH: Speaker Fecteau on Affordable Housing and LD 2003

If passed, LD 2003 would significantly improve conditions for growing Maine’s supply of affordable housing in a number of ways, including:

• Instructing the Department of Economic and Community Development to provide technical and financial assistance to municipalities to help adjust and implement zoning and land use ordinances, as well as incentivize cities and towns to review how their current ordinances may impact housing availability;
  

• Establishing a priority development zone in every municipality, in which multifamily housing/apartments can be constructed in a larger quantity, near community resources; and
  

• Requiring municipalities to permit the construction of accessory dwelling units (ADUs) beginning in April 2023. ADUs are additional, smaller housing units on personal property, such as tiny homes, “granny flats,” and “in-law units,” as well as converted garages and basements with separate entrances.

“Adding more housing to the supply is one piece of this puzzle, but it’s a huge piece,” Speaker Fecteau told us. “This bill, LD 2003, is going to solve a big portion of the challenges that we face.”

Mainers for Working Families applauds Speaker Fecteau for his dedication to the issue of affordable housing in Maine, and we urge our leaders in Augusta to pass LD 2003 this session. Every Mainer deserves a safe, affordable place to call home.

A Budget for Maine’s Working Families

It’s been a tough two years for Mainers. The COVID-19 pandemic has led to significant inflation as supply chain issues persist, made economic and societal inequities worse, and highlighted the weaknesses in our state’s safety net. But our leaders in Augusta are directing their attention to solutions that will not only help us recover but prosper in the long term.

Governor Mills recently publicized her proposal for the state’s supplemental budget, focusing on basic needs like education, healthcare, and housing, and supporting and strengthening Maine’s working families. Thanks to a generous $822 million surplus, the state will be providing each Maine taxpayer a one-time $750 check. Read on to learn about the other ways the latest budget could help Maine recover and grow.

MFWF-Supported Budget Items

In addition to providing Maine’s taxpayers with givebacks, Governor Mills’ proposed budget seeks to address basic needs like education, healthcare, and housing:

• Two years of free community college: High schoolers graduating between 2020 and 2023 can take advantage of two years of free tuition if attending community college full-time. This is meant to meet workforce shortages and help students find jobs in fields with high demand.

• Increased pay for child care workers and Early Childhood educators: During last year’s legislative session, House Speaker Ryan Fecteau spearheaded an initiative to make child care and early childhood education more affordable and accessible for all Mainers. At the same time, we need to ensure that we have the best staff and teachers to help our young children get the most out of their earliest years of development. This plan would invest more than $12 million in ongoing General Fund dollars to increase pay for child care workers and early childhood educators to strengthen our child care system across Maine.
  

• Relief for Maine’s healthcare providers: The pandemic has stretched our state’s healthcare system to its very limits and beyond. Now Governor Mills is seeking to ease the strain on hospitals and long-term care facilities by providing a combined $50 million in one-time funding.
  

• Expanded property tax relief: In an effort to address the ongoing housing crisis, Governor Mills seeks to invest $7 million from the General Fund to increase the maximum benefit of Maine’s Property Tax Fairness Credit. If approved, an estimated 100,000 low- and middle-income property owners and renters who pay more than 4 percent of their household budgets on property taxes or rent will be eligible for a refundable tax credit valued at up to $1,000 each year (or $1,500 per year for seniors).

The Governor’s budget proposal also looks to ease financial strains on working Mainers, including the impacts of inflation. Under this plan, the maximum benefit of Maine’s Earned Income Tax Credit (EITC) would increase by an average of $400 per family, bringing the total EITC benefit per family to an average of $764 per year. This would benefit an estimated 100,000 Mainers, primarily working families with incomes of less than $57,414.

PFML Remains a Priority

While we are in favor of many of the initiatives in Governor Mills’ proposed budget plan, it noticeably lacks a strong investment in developing the state’s Paid Family and Medical Leave program. The plan only allocates $300,000 in one-time General Fund dollars to fund an actuarial study of a potential statewide paid leave policy. Meanwhile, $12 million remains to be allocated by the Maine Legislature.

Maine’s working families can’t wait. The Commission on Paid Family and Medical Leave is working diligently to craft a program to meet our state’s unique needs, but we need financial support from the state to get the program off the ground. Tell our leaders in Augusta that we need to allocate funding for establishing a statewide Paid Family and Medical Leave program this session.