Purchase Plus Improvement

Finally, you have found a house in a great location that falls within your budget, but it needs work. You’re wondering just how you can swing both a mortgage payment plus renovation costs. Introducing the USDA RD Purchase Plus Improvement Mortgage in Maine.

How It Works

  • Maine State Housing will provide up to $35,000 for Home Improvements
  • 1/3 of the money can be disbursed at closing for a deposit to Contractor and would be made payable to both the borrower and the contractor
  • The remaining money is only disbursed when final inspection confirms all work is completed
  • Rehab must begin within 30 days of closing; borrower must occupy home within 60 days of closing; rehab must be completed within 180 days of closing
  • A final inspection is needed to confirm work is complete


  • Family members to be contractors even if it is their primary business
  • Borrower to complete their own work
Eligible Improvements Additions, alterations or repairs that improve the basic livability or safety as allowed by the mortgage insurer including, but not limited to: Accessibility improvementsCreating or improving a garageBringing an individual sewer disposal system into compliance with standardsReplacing or improving heating systems

Energy improvements

Energy Star rated refrigerators, washers, dishwashers and freezers

New stove tops/ranges and clothes dryers


Ineligible Improvements Decks, swimming pools and tennis courtsPublic improvementsCompletion of a homeImprovement prohibited by mortgage insurer/guarantorAppliances not specifically listed as eligible (e.g. microwaves)

Major rehabilitation and remodeling (e.g. relocation of load-bearing wall)

Other items that Maine State Housing Authority determines do not improve basic livability or energy efficiency of the home


UW Requirements:

  1. Contractor must have General Commercial Liability in the amount of $500,000 per occurrence; and Workers Compensation, Maine Statutory Limits
  2. Copy of Licenses for contractors that are required in the State of Maine to have a license- plumbers, electricians and heating technicians.
  3. Copy of detailed Contract with estimates/descriptions for all work to be completed
  4. Copy of 3 references for the contractor(s)
  5. Initial appraisal to be done based on contract estimates- “to be completed” value
  6. Review by USDA processing center and  Maine State Housing prior to close.
  7. RD Escrow Waiver Form to be completed
  8. MSHA HMP-19 and HMP-20 forms are required
To pre-qualify for a USDA RD Purchase Plus Improvement loan contact me today at 207-831-1903 or apply online.

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Seth Jacobs – Mortgage Pro and Fun Guy

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