Bowdoin College says it will begin offering forgivable loans to faculty and staff who want to buy a home.
The college hopes the program will give early-career professionals a leg up in Maine's competitive housing market.
Faculty and staff who have never owned a home within a 40-mile radius of the campus are eligible for the loans. They're worth 10% of the home's purchase price, with a cap of $50,000. Loans will be completely forgiven after 10 years.
Bowdoin employees who leave the college before 10 years will be responsible for paying the remaining loan balance.
Matt Orlando, senior vice president for finance and administration at Bowdoin College, said some prospective employees have turned down job offers over concerns about finding a place to live. Administrators have also heard from early-career professors who don't have the savings to compete with cash buyers and who are struggling to buy their first homes. Many have student debt and are having a difficult time coming up with a down payment.
"We're hoping that by providing 10% in most cases, we're giving them a leg up, or just a little bit of a lift here," Orlando said. "We will see. If in 2024 the market softens a little bit, and there's a little bit more inventory, I'm hoping that we'll hear these success stories trickle in and that the college's program has played an important role in that.
But he acknowledged there is still a limited housing stock for staff and faculty to choose from.
"The supply side is the issue, and if the market doesn't take care of that by incentivizing folks who are sitting on 3-4% mortgages to actually list their house for sale, the bottleneck will continue to persist," Orlando said. "What really needs to happen is new housing needs to be built."
The college has set aside $2 million over two years for the program. Orlando said he expects anywhere from 20-30 people to apply within the first year. Those who are eligible for benefits at Bowdoin can apply, although they must use either Bath Savings Bank or Kennebec Savings Bank, the two partners that the college is working with to offer this program, to secure their primary home loans. The loans that Bowdoin will provide are considered soft secondary loans, Orlando said.
Loans will be available for eligible Bowdoin employees starting in March.
