BRUNSWICK

Brunswick Landing Venture is touting its plans to convert rental units to for-sale condos and adding more rentals to its offerings as a boon for the local housing market.

The plan to sell 147 of its units — single-family ranches for $150,000 and condos for up to $250,000 — and open 190 units for public renters, however, has raised questions about its affordability and the impact for current tenants that don’t want to buy.

Chris Rhoades of Brunswick Landing Venture said housing expenses could actually drop if current tenants opt to go the purchase route. He gave an example of a home priced at $230,000: If the buyers make a down payment of $11,500 — or 5 percent — and borrowed the rest, their mortgage would be $1,100 based on present interest rates. On top of that, there would be taxes, insurance and a homeowners’ association fee that would bring their monthly housing cost up to approximately $1,750.

“That is below the rent for incoming tenants,” he said.

The homeowners’ association fees are dependent on where the home is located, Rhoades said; it would range between $100- $150 per month in Brunswick Gardens and around $250 monthly in Woodland Village.

Rhoades said while he would initially be part of the homeowners’ association board, once 75 percent of the units are purchased, he will no longer be involved. Homeowners in the neighborhood would elect members.

Whether rent would increase for tenants who wish to keep renting and have to move from a unit planned to be sold is dependent on where they move, Rhoades said. Since rents vary based on location, it could go up or down. For example, someone moving from a four-bedroom unit in Woodland Village to a four-bedroom in Midway Terrace would see a decrease in their rent.

“We’re not taking this as an opportunity to raise rents because they’re moving,” he said.

But is it affordable?

Not only is Brunswick Landing Venture converting rentals, it also has plans to build new two- and three-bedroom condos on its Brunswick property, with initial prices expected to range between $290,000-$325,000.

Questions remain, however, about how those offerings fit in the current market and who can afford to buy them.

Based on its 2017 housing facts and affordability index, the Maine State Housing Authority lists $238,000 as the median home price for the Brunswick micropolitan housing market. The median income was $58,367, compared to the $68,121 income needed to afford a median home price. Those with the median income can afford a home priced at $203,921. It crept below an affordable index in 2016 and a lack of housing stock seems to be driving the trend.

“Tight inventory statewide led to a decrease in sales of Maine’s single family existing homes last month,” the Maine Association of Realtors reported last week.

According to the association, Realtors reported that 1,156 homes changed hands in March, and median sales prices increased 10.9 percent from the previous year to $212,000.

“We’re seeing upward movement on median sales prices as a result of tight markets in many areas of Maine,” said Kim Gleason, president of the Maine Association of Realtors. “For-sale inventory is down 16 percent compared to March 2017, and 39 percent below the for-sale inventory of March 2016.

“Realtors from all over Maine report that buyers are anxiously ready and waiting for homes to be listed,” she added, “and sellers are pleased with the pace and pricing in the market.”

The impact of Brunswick Landing Venture’s plans for its housing is a mixed bag, according to John Hodge, executive director of Brunswick Housing Authority. A lot depends on the prices and which housing market they are hitting, he said, because it always ebbs and flows.

Few of the authority’s clients, who are very low income, Hodge said, rent any of the former military housing.

While he doesn’t see a direct impact for them, if more rentals are created that local renters can afford to upgrade to, it could free up lower cost rentals.

“It’s a very tight housing market right now,” Hodge said, “so it’s taking longer for our voucher holders to find housing.”

He added that removing some of the rental units from the market will impact some of the surrounding rentals and may put pressure on prices to go up, but if it adds rental units to the market, prices could go down.

Making it work

In an effort to ease the transition from renters to owners, Brunswick Landing Venture brought Movement Mortgage into the equation, which is offering several lending plans that range from 0 percent to 10 percent for down payments. Among the funding streams for the plans are USDA Rural Development, Veterans Administration, and Fannie Mae and Freddie Mac loans, and are approved by the Federal Housing Administration.

Drew Preston of Brunswick Landing Venture said all of the lenders loans are conventional financial options that are fixed rate programs. And all follow rules set forth by the federal government that include changes made in response to the 2008 financial crisis.

Many of the loans that led to the housing bubble were private loans that weren’t supported by the federal government, Preston said. In this case though, he said, “the consumer has to prove and demonstrate to the lender that their income is sufficient to pay all of their bills — not just the mortgage but all fixed expenses.”

The company also is working with current tenants to sort out their plans. Rhoades said no one will have to leave their unit before their lease expires and those whose are scheduled to come up in the next few months will be able to stay on a month-to-month basis. Sales transactions likely won’t start until late-July or August.

For those currently renting who wish to buy a unit, Brunswick Landing Venture is crediting their last month’s rent toward the purchase price and is paying for some of the closing costs.

Asked if the company is helping with moving costs, “We’re taking each situation and evaluating it for each family,” he said.

Tenant reaction

Current tenants that The Times Record was able to speak to about the company’s plans were positive about the opportunity to buy a home.

An example of a young family getting such a chance given by company is Devin Conner and his girlfriend Kandace Thibeault. Conner, 23, grew up in Brunswick and Thibeault, 22, in Durham. They work in Lewiston and have been looking to buy their first house in the Brunswick area for nearly two years to settle down and raise their daughter.

“The housing market is so crazy there’s not much on the market reasonably priced in this area, and if there is, it goes pretty quickly,” Conner said when interviewed by The Times Record.

They did make offers for homes in neighboring towns and have a first refusal deal for a ranch house at Brunswick Landing — if a current tenant passes up their option to buy it.

“We really like Brunswick and would love to live in Brunswick,” Conner said.

When The Times Record visited Linda Frost and Larry Tyrrell on Saturday at the Woodland Village home they’ve lived in since January 2012, the couple said they are pursuing a mortgage to purchase their unit. When they moved to Maine from Maryland for work, they couldn’t find any other rentals that would allow their two dogs.

“I absolutely love living here,” Frost said. “It’s convenient to my job — I work at Sweetser down the street. There’s great places to walk my dog.

“I actually even thought about buying the house even before they came to us,” she added.

That feeling was common, according to Preston, who said the company had been approached by a large number of tenants interested in purchasing their unit.

Several current tenants have reached out to The Times Record indicating they are unhappy with the change, but none have been willing to discuss their complaints on the record.