RICHMOND — Until very recently, Steven and Abby Utecht were paying rent on a small apartment in Bath, with rowdy children dwelling in the unit above and a paper-thin ceiling ensuring that all noise could be heard in their own space.
“We were expecting to be in the apartment for two years,” Abby Utecht said Friday. But with the couple expecting their own son in just a couple of months, she continued, “that wasn’t going to happen.”
They decided to look for a house and, more important, a means to afford one. Steven and Abby, who are both 22, eventually did manage to find a two-story home on Beech Street in Richmond.
And in May, with Steven steadily employed as a shipfitter at Bath Iron Works, they qualified for a loan from Bangor Savings Bank that was guaranteed by a federal rural development program.
So far this year, more than 1,300 Mainers have taken advantage of federal programs such as the one that helped the Utechts, and more than 2,000 probably will do so by the end of 2016, said Virginia Manuel, state director of the U.S. Department of Agriculture’s rural development programs. That’s about a fifth of the home sales that may take place in Maine this year, Manuel added.
The rural development program helps homebuyers in two ways, Manuel said Friday morning at an event celebrating the Utechts’ new home. Manuel was joined at the ceremony by the lenders from Bangor Savings Bank and a real estate broker who helped the couple, as well as a representative for U.S. Sen. Angus King.
The Utechts now credit that program with letting them become homeowners. It allowed them to avoid making a down payment on the home, and they’re now making monthly payments on it that are just $30 more than the rent they paid in Bath. Their son, Remington, was born a month ago, and they’ve created a nursery for him in the new home.
“It was amazing when we heard that we were approved to buy a house,” Steven said. “We were going to have a place that’s our own. We don’t have to pay a landlord. We’re paying to own our property.”
‘IT’S NICE TO SAY I’M GOING HOME’
The joy was especially pronounced because Steven’s own parents divorced when he was young, he said, so his childhood was split between homes in Brunswick and Topsham.
“It’s nice to say I’m going home after work,” he said. “This is the first time since I was 4 years old that all of my stuff and my time can be occupied in one place, because I used to switch houses every night.”
In some cases, the buyers take their loans straight from the Department of Agriculture.
But like the Utechts, more than three-quarters of the Mainers who benefit from the federal program receive their loans from a third party lender and have them guaranteed by the Agriculture Department. That means they pay their loans back at a fixed interest rate over a 30-year period.
If they have trouble and default, the department repays the bank, Manuel said.
“It’s unique in the sense that a couple can borrow a bank loan without putting any money down,” Manuel said. “If they’re really young like this couple, most of them have never accumulated much savings, so they don’t have the down payment. It absolutely helps it be affordable for them to get into a house.”
The program isn’t limited to young families, Manuel added: “It can be a single, older person buying a second, third or fourth home. It’s the income level, what they’re making, that drives who can utilize this program.”
In the 2016 fiscal year, only 26 of the 1,608 guaranteed loans – 1.6 percent – made in Maine ended in delinquency, a department spokeswoman said.
Before than can happen, the federal agency usually tries to help borrowers by working out a different repayment schedule, Manuel said.
To qualify for the guaranteed loan programs, homebuyers must meet several criteria. They must have a stable income that’s below a certain level for the number of people in their family. They must be buying a home in a community that is classified as rural – as many Maine towns are.
Besides the buyers themselves, both the banks and the communities where the buyers settle also benefit from the program, Manuel said. The banks can feel more comfortable making a loan, and the communities gain more residents who buy goods, pay taxes and support the local economy.
Since 2009, the federal program has helped 16,572 homeowners in rural Maine, leading to a total investment of $2.2 billion, according to a news release from the agency.
The Utechts wouldn’t have been able to buy a home without the rural development program.
“The loan we got was solely because we were backed,” Abby said. “There was no way we could have gotten one any other way. The way our finances are, we live week to week a lot of weeks now, with one income and being a family.”
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