Portland nonprofit Project Home is seeking funding for an affordable housing project that would turn an old church into deed-restricted apartments in Saco. 

The former Saco United Methodist Church at 12 School St. was purchased by the city in 2019 to be used as a teen center, but city officials later decided the building would be better suited for affordable housing.

In 2024, the city put out a request for proposals for a developer to purchase the church and repurpose it for affordable housing. Project Home was the only developer to respond to the RFP; it will buy the property for $1.

Project Home is seeking just under $250,000 in Community Development Block Grant funding to complete the project. The nonprofit has already received a $455,000 grant from the Federal Home Loan Bank of Boston through the bank’s affordable housing program.

According to Project Home Chief Financial Officer Dan Black, the project is estimated to cost about $2.7 million, most of which will come from grants.

The plan is in line with Project Home’s interest in finding better ways to use existing buildings, Black said. It is also attractive to Project Home because of the church’s historic status.

Because the church was built in 1878, Project Home can leverage historic tax credits to rehabilitate it. About 45% of the project’s total cost will be reimbursed by those credits.

“That’s a huge benefit to make small projects like this viable,” Black said. 

The redeveloped property will include seven affordable units, including two set aside for participants of Foster Youth Independence, a program that helps young adults who have aged out of the foster care system find affordable housing.

Those units would be available to someone making 30% or below of the Area Median Income, which is $106,800 in York County. 

“Finding them safe and comfortable housing in downtown Saco is important for their long-term growth,” Black said.

The other apartments would be available to someone making 80% or less of the AMI, with two of them leased by the city to be available for new staff relocating to Saco.

The project will also include a multipurpose room on the second floor that could be used by residents, local nonprofits and the city.

At a Saco City Council meeting last month, members spoke in favor of the proposal.

Councilor Nathan Johnston said the project would help the city meet its affordable housing goal.

“I’m very happy to see this moving forward,” Johnston said. “I think it’s a fantastic historic building in our downtown, so it’s good to see it potentially be reused.”

Mayor Jodi MacPhail said the city is looking forward to working with Project Home and to adding more affordable and workforce housing to the community.

“As we look forward, these types of partnerships are critical to addressing this critical issue,” MacPhail said Tuesday.

Black said Project Home will likely break ground sometime next spring. Construction is expected to take about a year.