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Lisa Tissari never thought she would stay in Maine for more than a few weeks, but after living in her Orono apartment for nearly a decade, she considers the state her home.
Originally from Massachusetts, Tissari was left without a place to live after a relationship ended several years ago, so she came to stay with a friend until she got back on her feet. She soon moved into the Main View Apartments development in Orono, an affordable housing building for older adults and disabled individuals.
The 24-unit building was created out of a former school in 1988 using the U.S. Department of Agriculture’s Section 515 Program. Established in 1963, the program gave 1% interest mortgage loans to owners looking to create rural affordable housing, and typically included subsidies for low-income renters.
At its height in the late 1970s, the USDA financed the development of 35,000 such apartments a year nationwide.
“Across the country, the average income of a resident in one of these properties is $13,600 a year,” said Liza Fleming-Ives, executive director of the Brunswick-based Genesis Community Loan Fund.
Tissari’s home is one of thousands that low-income Mainers in rural areas rely on, but is at risk of vanishing in the coming months as their mortgages mature. The loss would be a crushing blow to a state trying to claw its way out of a housing shortage created by years of underproduction.
“Maine can’t afford to lose existing affordable homes faster than we can build new housing,” Fleming-Ives said.
More than 7,600 apartments in Maine are still part of the USDA’s Section 515 Program, but they’re at risk of becoming unaffordable as the mortgages mature and their original owners sell the buildings and retire, according to Fleming-Ives.
If the original owners of the developments sell to private buyers, they leave the Section 515 Program and the buyers would likely rent the units at market rates. This would cut affordable housing in rural communities that residents have relied on for decades.
“If that happens, residents often have nowhere else to go,” Fleming-Ives said. “In some cases, they’re the only rental housing in their communities.”
New housing would likely take years to create and waitlists for existing affordable units can be years-long.
In the case of Tissari’s unit, the Old Town Housing Authority stepped in and, with the help of the Genesis Community Loan Fund and the Maine Affordable Housing Income Tax Credit, bought and upgraded the building, said Laurie Miller, executive director of the Old Town Housing Authority. This kept rents low for the residents, all of whom use rental subsidies.
“I thought a lot about whether not having a home would become a reality for me,” Tissari said. “Instead of uncertainty, this purchase gave us security and peace of mind.”
Tissari’s building is one of five across the state that have been preserved in recent years using this model and the state tax credit. Combined, they hold 88 affordable apartments for seniors and families according to Greg Payne, the senior housing policy advisor in the Governor’s Office of Policy Innovation and the Future.
In the coming years, local groups will need to repeat the feat with more than 300 housing developments in Maine that are still part of the USDA’s 515 Program. To do so, they need assistance from the state Affordable Housing Income Tax Credit.
Created in 2020, the state tax credit supports the construction of new housing and preserves existing affordable housing in partnership with the Federal Low Income Housing Tax Credit.
The credit will expire at the end of 2028.
With the clock ticking, lawmakers are considering a new bill that would make the tax credit permanent, or at least extend it for another eight years. The Legislature’s taxation committee is expected to hold a work session on it as early as Tuesday, according to Fleming-Ives.
Extending the state tax credit would create a predictable resource and give prospective buyers confidence that the units will remain affordable for years to come, easing the ownership transfer, Fleming-Ives said.
Salmon Brooks Apartments in Washburn, which offers 20 units of senior housing, is the next development slated to be sold within the next month.
The town of Washburn created a housing corporation to purchase the property so it can remain affordable “because they understand that those units will never be replaced if they’re lost from being affordable,” Fleming-Ives said.