Bangor officials hope to increase homeownership with trio of proposed programs

An auction sign in front of a home on Bangor's west side.
John Clarke Russ | BDN
An auction sign in front of a home on Bangor's west side. Buy Photo
Posted Aug. 06, 2014, at 11:58 a.m.
Last modified Aug. 06, 2014, at 5 p.m.

BANGOR, Maine — In an effort to boost homeownership and court new families to settle in Bangor, city councilors will vote later this month on a trio of new programs aimed at making it easier for people to buy and fix up a house.

“It’s going to help support the goals we have in fostering single-family homeownership in the city,” said Jason Bird, community and economic development officer for Bangor.

One of the more intriguing initiatives, Bird said, is the First Time Homebuyer Credit Enhancement Program. This could be used for any home within city limits, as long as the buyer has not owned a home in the past three years and is looking to buy a fixer-upper.

A homebuyer could apply to the program up to six months after the purchase of the home is final. The tax rebate they receive will be calculated starting with the assessed value of the home when they purchased it. After renovations are completed, the city will reassess the property and determine how much its value has increased. Once taxes are paid, 75 percent of the value of that assessment increase will be returned to the new homeowner in a check.

That rebate would continue each year for five years, as long as the homeowner keeps in line with the terms of the agreement, according to program guidelines.

Bangor officials are especially interested in increasing the number of owner-inhabited homes in the West Side Village, an area stretching from Main Street to Third Street and Buck Street to Union Street. So, they’ve tried to make the deal even sweeter for them, offering a 100 percent rebate for the amount they increase their home’s value.

The West Side Village has seen problems with a rise in abandoned, vacant and dilapidated housing, crime, drugs and other issues over the years. City officials have said that increasing the rate of single-family housing in that neighborhood is one of the keys to resolving those issues.

Numerous studies have found that single-family, owner-occupied homes tend to stabilize neighborhoods, according to Bird. Zillow lists 313 single-family homes for sale or potentially up for sale after foreclosure in Bangor.

Bangor has seen growing issues with properties owned by absentee landlords. They fall behind in taxes, draw problematic tenants or the buildings fall into disrepair, bringing property values down for their neighbors. In other instances, homes are outright abandoned by their owners or enter the foreclosure process. Under those circumstances, it can be years before the city has legal authority to do anything with the home.

The other two programs would be funded through Community Development Block Grant money administered by the U.S. Department of Housing and Urban Development. That means only low- and moderate-income individuals and families will be eligible — a maximum of 80 percent of the area median income. To be eligible, purchased homes must cost under $271,050 for single-family dwellings or $347,000 for owner-occupied, two-unit homes.

The first Community Development Block Grant-funded program is geared toward helping homebuyers cover costs associated with closing the deal on their new home — appraisal fees, credit reports, title searches, title insurance costs, flood certification fees, bank processing fees, attorney fees and recording fees.

Eligible recipients can apply with the city and receive a check, with the amount determined by the U.S. Department of Housing and Urban Development and a cap of $3,000.

The other program is aimed at helping people cover their down payment on a home. Approved applicants will receive 50 percent of the required down payment, with a cap of $5,000.

Recipients of those two programs must promise to live in the home for at least 5 consecutive years. Breaking that part of the agreement means the homeowner must repay the city.

City councilors are expected to vote on all three programs during their meeting on Monday, Aug. 25.

“This could serve as a real incentive for young people to move to the area,” City Councilor Nelson Durgin said during a Tuesday committee meeting.

Attracting families to the area is something city officials have focused on in recent years. City Council Chairman Ben Sprague outlined a plan earlier this year focused on incentives such as the proposed housing programs.

According to 2012 U.S. Census data, Bangor has a homeownership rate at about 45 percent, roughly the same as Portland’s. The statewide average is 72 percent.

Bird said the city has about $200,000 available for housing activities for this fiscal year, but hasn’t yet set a budget for each program. Eligible projects will be funded as they come up, he said.

If approved, these programs will be administered and the city will evaluate them in about a year to determine how often they’ve been used and how successful they have been in helping people successfully settle in and fix up a home.

City officials say they plan to promote the new programs on the city’s website, via social media, and to work with local realtors to spread the word.

Bird said he hopes these programs will “tip the balance” for families trying to decide on where to settle.

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