Tony Purington paints window trim at a house in Gray that Avesta Housing has bought and is fixing up to sell at an affordable price. Avesta’s new program aims to add to the state’s affordable housing stock. Gregory Rec/Portland Press Herald

The three-bedroom, one-bath condominium on Collyer Brook Road in Gray is a bit of a fixer-upper.

The driveway is crumbling, with large chunks of pavement missing entirely. The front steps are rotted, the privacy fence in the backyard is toppled and until a few weeks ago, there was mold and water damage in the basement.

But with a little elbow grease – and about $80,000 in renovations – Nicole DiGeronimo, director of the Home Ownership Center at Avesta Housing, believes the small home has potential.

The second half of a duplex, 6B Collyer Brook Road is the inaugural project for “A Path Forward – Homeownership for ME,” a new Avesta program designed to help moderate-income first-time home buyers break into a housing market that seems determined to push them out.

Avesta will purchase homes in need of a little TLC, renovate them and then sell them to qualified applicants for an affordable price.

PRICED OUT OF THE FIXER-UPPERS

“It’s no secret that the market is incredibly difficult for first-time buyers,” DiGeronimo said.

Nicole DeGeronimo, director of the Home Ownership Center at Avesta Housing, in a garage of a condominium in Gray that Avesta is renovating. Avesta intends to fix up homes and then sell them to qualified buyers at an affordable price. Gregory Rec/Portland Press Herald

She has witnessed the grueling market drain enthusiasm from prospective homeowners enrolled in Avesta’s first-time homebuyers course. The median home sale price in Cumberland County last month was $570,000, a more than 75% increase from $325,000 in 2019.

“Folks come through, expressing frustration about the limited inventory. We hear a lot of ‘everything in our price range is a fixer-upper,’ ” she said.

For many first-time buyers, scraping together the money for a down payment is challenging enough – affording repairs is out of the question. Plus, many fixer-uppers are financed in cash because banks aren’t willing to finance a loan that could be considered high-risk.

“You’re taking on not only home ownership, which is not for the faint of heart, and then adding on repairs, which is … yikes,” she said.

The 960-square-foot single-level home in Gray would be a lot for any homeowner, especially a first-time buyer to tackle, DiGeronimo said.

Because of the existing deed restrictions, the Collyer Brook condo can only be purchased by someone making 65% of the area median income, or between $58,000 for a single person and $83,000 for a family of four.

“There’s no way that somebody (making 65% AMI) would have been able to buy it and do the repairs,” she said.

Tony Purington paints window trim at a house in Gray that Avesta Housing is fixing up. Gregory Rec/Portland Press Herald

That’s part of what excites her about the new program. Someone with limited means will be able to buy a newly renovated home with bells and whistles.

REVIVING OLD HOUSES

Much of the conversation around Maine’s housing crisis – including the lack of inventory and limited affordability – has focused on the need for new construction.

Statewide, housing production needs to increase 92% by 2030 in order to combat historic underproduction and meet the expected population growth.

Developers (including Avesta) are building as much as they can, as quickly as they can – though high construction costs, a workforce shortage and municipal land-use restrictions have hampered efforts.

Meanwhile, Maine has the oldest housing stock in the country, much of it sitting vacant.

“(Many towns) have all that old housing stock in dire need of repair and nobody really willing to step in and do it,” DiGeronimo said. “We were like, ‘Why don’t we buy these fixer-uppers, fix them, sell them back at an affordable price to a first-time buyer and keep them affordable?’ ”

Collyer Brook, a 22-unit subdivision of deed-restricted affordable single-family homes and duplexes, was developed by Avesta Housing – then York-Cumberland Housing – in the 1990s. Avesta had right of first refusal on the part of this duplex home for sale on Collyer Brook Road. Gregory Rec/Portland Press Herald

Collyer Brook, a 22-unit subdivision of deed-restricted affordable single-family homes and duplexes, was developed by Avesta Housing – then York-Cumberland Housing – in the 1990s. Unit 6B has changed hands several times in the intervening decades, but when the previous owners were ready to move on, Avesta was given the right of first refusal.

The agency purchased the house for $108,000.

Because it was originally an Avesta property, it already had deed restrictions limiting the future sale to someone making about 65% of the area median income. In most of Cumberland County, the AMI is about $89,000 for a single person or $127,000 for a family of four. The house cannot sell for more than $210,000.

That’s less than half the median sale price in Gray, which has fluctuated drastically over the last year, but was most recently $440,000.

The Collyer Brook house is scheduled to be ready in the spring. For future projects, DiGeronimo said the program will likely target moderate-income households making between 80% and 120% of AMI “that often get overlooked.”

KEEPING IT AFFORDABLE 

Avesta would create a community land trust for each property to ensure perpetual affordability but would work out a formula so the homeowners could still gain equity when they decide to sell.

Because of the restrictions, the houses won’t hit Zillow or Redfin. Avesta will handle the sales and take applications.

Any profits from the sale will go back into the program to help fund more purchase and renovation projects, DiGeronimo said. The agency hasn’t selected a second property yet, but DiGeronimo noted that the second half of the duplex is currently unoccupied and could hit the market soon.

She’s working to find other ways to expand the program, like partnering with banks to get a deal on foreclosed homes or working with municipalities to rehab derelict and dangerous properties, similar to a land bank authority.

Tony Purington paints trim on a kitchen window at the house in Gray that Avesta Housing is renovating. Because it was originally an Avesta property, it has deed restrictions limiting the future sale to someone making about 65% of the area median income, or between $58,000 for a single person and $83,000 for a family of four.  Gregory Rec/Portland Press Herald

The program is largely funded by grants and donations, including $50,000 from Bangor Savings Bank and $25,000 from Mascoma Bank.

The housing market often feels like an ouroboros, or a snake eating its tail, DiGeronimo said.

Maine has the oldest housing stock and the oldest population. Older Mainers are stuck in houses too big for them, that they can’t afford to renovate, and they can’t move out because there either aren’t enough small homes on the market or they’re too expensive. But if the older people don’t move out, there aren’t any homes for growing families to move into, and they’re stuck in their starter homes. Starter homes could be an option for people looking to downsize.

DiGeronimo knows the program won’t solve the housing crisis, or end the loop, but it’s one step the agency can take to help ease the burden for some young families.

“Something’s gotta give,” she said.