Frequently Asked Questions About Heritage Woods
Q. WHY IS THIS NEIGHBORHOOD BEING BUILT?
A. Heritage Woods will be the first affordable neighborhood to be build in Kennebunkport by the Heritage Housing Trust. We believe that this neighborhood of six, single family homes will:
Contribute to the dwindling number of “affordable” homes in Kennebunkport. Affordable, quality housing attracts teachers, police, nurses, firefighters, and other key service providers to the community. Since 2000, the median home value in Kennebunkport has increased 106%- from $234,000 to nearly $482,000. In 2020, many homes were selling for over $600,000. However, the median income has only increased 41%- from $54,000 to just over $76,000, leaving many families and individuals priced out of the housing market. Currently, home values in Kennebunkport are 88% higher than other homes in York County.
Ensure that our local workforce can afford to live in the town where they work. Only 56% of property owners live in town year round. 80% of Kennebunkport’s workforce- fire, police, bank tellers, school teachers, shop owners, restaurant staff- commute into Town from other communities. Many of our first responders find themselves living 20, 30 even 60 minutes away from the community they serve in, simply because they cannot afford to live here.
Balance the aging population. In Kennebunkport, 36% of the population is over the age of 65, higher than York County and Maine. Our volunteer firefighter median age is 55 and 35% are over the age of 60.
Grow student enrollment at Kennebunkport Consolidated School. Strong schools attract families and businesses boosting the local economy. They act as community centers and provide a foundation for all age groups to connect- schools are the heart of strong communities. Enrollment at the Kennebunkport Consolidated School- the PRIDE of the Port- has dramatically declined- down from 209 students in 2009 to 143 in the Fall of 2019, of which only 97 students K-5 were actual residents of Kennebunkport.
Q. HOW DO YOU DEFINE AFFORDABILITY?
A. The federal Department of Housing and Urban Development (HUD) defines an "affordable dwelling" as one that a household can obtain for 30 percent or less of its income, but this varies from location to location. In Maine, the Maine Housing Authority provides regular reports on housing affordability, based on the area median income (AMI). In York County, the median home price in 2019 was $290,000 while in Kennebunkport, the median home price in 2019 was $655,000.
The average cost of 1 acre of land in Kennebunkport is $125,000 to $150,000. and the average rental cost of a 3 bedroom/2 bath unit in Kennebunkport is $2,500 - $3,000 per month. The 6 homes in Heritage Woods will house first-time homebuyers and veterans or activity duty military who are between 80-120% of area median income.
Heritage Woods- the first affordable neighborhood will offer 3 single story (3 bedroom 2 bath) homes priced at $220,000 and 3 two story (3 bedrooms, 2.5 baths) homes priced at $295,000. This income eligibility chart provides eligible income ranges for potential Heritage Woods homeowners.
Q. ARE HERITAGE HOMES ONLY AVAILABLE TO FAMILIES WITH CHILDREN?
A. It is the mission of the Heritage Housing Trust to create and sustain affordable housing for year-round residents in Kennebunkport. Our 5-year goal is to build 25 homes by the year 2025. For this first project- Heritage Woods- each home will have 3 bedrooms and 2 baths. Interested homeowners are encouraged to review all of the eligibility requirements.
Pre-qualification factors that the KHHT will consider include: Household income within income guidelines; a mortgage pre-qualification letter; criminal history; local preference (see below); available housing stock; household composition and applications received by the deadline.
KHHT is examining additional housing needs in the community for different size households and will look to include more variety of housing arrangements in future neighborhood (not limited to senior housing, work force housing, etc)
Q. HOW IS "LOCAL PREFERENCE" BEING DEFINED?
A. In our commitment to sustaining the past and future heritage of Kennebunkport, applicants will be offered an opportunity to identify any "local preference" on their application. This information will be considered along side the additional 6 (six) pre-qualification factors. For the Heritage Woods project, local preference is identified as:
Applicants who currently live or have lived in the Town of Kennebunkport;
Applicants who work in Kennebunkport or for the Town of Kennebunkport;
Applicants with elementary school aged child(ren) who currently attend or who will be eligible to attend Kennebunkport Consolidated School;
Applicants who currently volunteer or have volunteered for the Town of Kennebunkport or other local organization;
Applicants who would be willing to volunteer for the Town of Kennebunkport or other local organization.
Q. WHAT IS A LAND LEASE AND WHY WILL IT BE USED? HOW DOES IT WORK?
A. The land lease model is an extremely attractive tool for maintaining the stock of affordable housing. Currently there are almost 280 community land trusts operating in every region of the country. These housing/land trusts are nonprofit, community-based organizations whose mission is to provide affordable housing in perpetuity by owning land and leasing it to those who live in houses built on that land. By removing the cost of land and reducing the expense of housing development the Housing Trust can offer attractive pricing for people within certain income limits.
The homebuyer will purchase the house, at a reduced cost, with a regular mortgage and receive a 99 year lease from the Housing Trust. The lease includes a resale formula intended to balance the interests of present homeowners with the long-term goals of affordable housing for future homeowners. When the homeowner is ready to sell their home they can sell it to another family who meets the same eligibility criteria and take any earned equity in accordance with the resale formula. The new homeowner will enter a new 99 year lease with the Housing Trust.
Q. HOW WILL THE HOMES OF HERITAGE WOODS BE FINANCED?
A. The homes will be financed with a traditional mortgage under the Maine Housing First Home Loan Program and through Bangor Savings that is secured by the home owner. After meeting with several local banks, the KHHT has chosen Bangor Savings Bank as our mortgage holder due to their expertise in affordable housing. Grants from the Maine State Housing Authority and the Federal Home Loan program have been sought to assist with reducing the cost of the home, ensuring that the sale price remains affordable for first time homebuyers.
Q. ARE THERE INCOME REQUIREMENTS TO BE ELIGIBLE FOR THESE HOMES?
A. Yes. Income limits for interested applications are based on the Housing and Urban Development (HUD) published median family income for all market areas in the country. The median family income is then adjusted for family size in the HUD published figures. The minimum incomes are based upon the housing costs and the ratios of incomes to costs applied in mortgage underwriting for the program being utilized.
For Heritage Woods, all applicants who are interested in the single story home (regardless of household size) will likely need a minimum income of $48,000; all applicants who are interested in the two story home (regardless of household size) will likely need a minimum income of $64,000. Please consult the Household Income Limit document for household maximum limits, as they vary based on household size. Additionally, interested applicants will need to work directly with Bangor Savings Bank to determine pre-approval for the desired mortgage, based on current income and household size.
Q. WHAT SHOULD HOMEOWNERS EXPECT FOR CLOSING AND DOWN PAYMENT COSTS?
A. Applicants should be prepared to secure a minimum $1,200 (down payment) + $1,000 (closing cost) for the one story; $10,000 (down payment) + $1,000 (closing cost) the two story home.
Q. WHO ACTUALLY "OWNS" THE HOME- HERITAGE WOODS OR THE HOME OWNER?
A. The homes will be owned by the homeowner, with a mortgage financed through Bangor Savings Bank. The Housing Trust will own the land but will maintain 99 year land leases with all homeowners.
Q. WHO WILL BE RESPONSIBLE FOR PAYING PROPERTY TAXES?
A. Just like all homeowners, Heritage Woods homeowners will pay property taxes on their home, directly to the Town of Kennebunkport. Heritage Woods homeowners will not be responsible for paying for tax on the land that they lease.
Q. WHAT IS THE PROCESS FOR A HOMEOWNER WHO WISHES TO SELL THEIR HERITAGE HOME?
A. The homebuyer will purchase the house, at a reduced cost, with a regular mortgage under the Maine Housing First Home Loan Program through Bangor Savings Bank and receive a 99 year land lease from the Housing Trust. The lease includes a resale formula intended to balance the interests of present homeowners with the long-term goals of affordable housing for future homeowners. When the homeowner is ready to sell their home they can sell it to another family who meets the same eligibility criteria and take any earned equity in accordance with the resale formula. The new homeowner will enter a new 99 year lease with the Housing Trust.
The goal of KHHT is to build success for homeowners and maintain affordable housing for our community. That is why we have established a Board of Directors with a wide depth of experience to work with homeowners from the moment they apply to the time they sell and we are fortunate to welcome a new homeowner to Kennebunkport.
Q. CAN HERITAGE HOMES BE PASSED ON FROM GENERATION TO GENERATION?
A. The lease document includes covenants and a resale formula intended to balance the interests of present homeowners with the long-term goals of affordable housing for future homeowners. As such, homeowners may sell or transfer their interest in the leased land and home to any family members that are income qualified.
Q. WILL THERE BE ANY IMPACT TO SURROUNDING PROPERTY VALUES?
A. As part of the Town Planning Board Process, the Housing Trust was required to submit a third party appraisal to establish any impact on neighboring home values. It was determined that the home types and design were in concert with the surrounding homes and it is expected that the new homes will add value to the area. A copy of this appraisal is included HERE.
Q. WHAT IS THE IMPACT OF THIS NEIGHBORHOOD ON THE TAX BASE IN KENNEBUNKPORT?
A. The property where the Heritage Woods homes will be built has been a tax acquired parcel for 50 years and has not produced any tax revenue to the town during this time. Our approach addresses two targets- 1) the need for energy efficient housing for those households with incomes not being met by the current local housing market- teachers, public safety, retail workers, etc- and; 2) by returning the property back to the tax roles, we are increasing the taxable value to contribute to the tax commitment of the town- and reducing the tax burden on other properties. Once developed, the estimated taxable value of the Heritage Woods neighborhood is likely to approximate $1,000,000.
Q. THE KHHT HOUSEHOLD INCOME DOCUMENT ONLY PROVIDES INFORMATION FOR HOUSEHOLD SIZES OF 2-6 MEMBERS. ARE THERE GUIDELINES FOR SMALLER OR LARGER HOUSEHOLDS?
A. The development of minimum and maximum income guidelines is described above. Based on this, the following income guidelines should be utilized for households with less than 2 and more than 6 members.
1 person household-
Single story minimum income: $48,000* and Single story maximum income: $44,250*
Two story minimum income: $64,000*and Two story maximum income: $63,360*/**
7 person household-
Single story minimum income: $48,000* and Single story maximum income: $78,400
Two story minimum income: $64,000 and Two story maximum income: $90,850**
8 person household-
Single story minimum income: $48,000* and Single story maximum income: $83,450
Two story minimum income: $64,000 and Two story maximum income: $90,850**
*Based on HUD guidelines and using current underwriting ratios, the current one person household maximum allowable income is LESS than the necessary minimum income for both the single story and two story homes. Interested applications looking to apply as a one person household should contact Eric Nixon directly at Bangor Savings Bank to discuss their financial situation further.
**Income limits for the two story households are determined both by HUD guidelines and the income limits of the Maine Housing First Home Loan program, which is being utilized to finance homebuyers' purchases.