Thousands of affordable apartments across Maine could soon become unaffordable as aging federal housing programs reach a critical turning point. Housing advocates warn that more than 7,600 rental units in the state tied to the U.S. Department of Agriculture’s Section 515 rural housing program are at risk of transitioning to market-rate housing as long-standing mortgages mature and property owners consider selling.
The potential loss of these units represents a significant challenge for Maine, where affordable housing shortages already affect many communities — particularly in rural areas.
A Program That Built Rural Housing
The Section 515 program was created in 1963 to support affordable housing development in rural communities. Through the program, the USDA provided low-interest loans — often as low as 1% — to developers willing to build apartments for low-income residents. These projects frequently included rent subsidies to ensure housing remained accessible to people with limited incomes.
During its peak in the late 1970s, the program financed tens of thousands of apartments annually across the United States. Many of those buildings are still standing today, including properties throughout Maine that serve seniors, people with disabilities, and households with limited incomes.
But decades later, the original loans that funded these developments are now reaching the end of their terms. As those mortgages mature, owners may decide to sell the properties or leave the program entirely.
Why the Apartments Could Become Unaffordable
Once a property exits the Section 515 program, it is no longer required to maintain affordable rents. If sold to private investors or developers, the apartments can be converted to market-rate housing, which could significantly increase rent prices.
Housing advocates say this shift could remove an important source of affordable housing in many communities.
More than 7,600 apartments across Maine are currently still part of the program, and many of them face uncertain futures as ownership changes become more likely.
For residents who depend on these apartments, the consequences could be severe. Many tenants have extremely limited incomes, and affordable housing options nearby are often scarce.
A Critical Housing Resource in Rural Communities
In rural parts of Maine, Section 515 developments frequently represent the only significant source of rental housing available to low-income residents.
If these properties are converted to market-rate housing, many tenants could struggle to find alternative homes. Waitlists for other affordable housing programs can stretch for years, and building new units takes time and funding that communities may not have readily available.
Housing experts warn that Maine cannot afford to lose existing affordable homes faster than new housing can be built.
Efforts to Preserve Affordable Units
Some communities are working to prevent these apartments from disappearing.
In several cases, local housing authorities, nonprofit lenders, and state programs have stepped in to purchase properties before they are sold to private investors. These partnerships allow the buildings to remain in the affordable housing system while also funding renovations and improvements.
For example, one property in Orono was preserved through a collaboration between a local housing authority, a community loan fund, and Maine’s Affordable Housing Income Tax Credit program. The purchase ensured that residents could continue living in their homes without sudden rent increases.
So far, a small number of properties across the state have been saved using this model. Combined, these efforts have preserved dozens of apartments that might otherwise have been lost.
The Role of Tax Credits and Policy
Preserving affordable housing often depends on financing tools such as the Maine Affordable Housing Income Tax Credit, which supports both the construction of new housing and the preservation of existing units. The program works alongside federal tax credits to make affordable housing projects financially viable.
However, the current state tax credit program is scheduled to expire in 2028, creating uncertainty for future preservation efforts.
Housing advocates and policymakers are now discussing legislation that could extend the program or make it permanent. Supporters argue that a longer-term funding commitment would give nonprofits and housing authorities the confidence needed to purchase and preserve vulnerable properties before they leave the affordable housing system.
The Challenge Ahead
More than 300 housing developments in Maine remain part of the Section 515 program, meaning preservation efforts will need to continue for years to come if the state hopes to maintain these affordable apartments.
Local groups, housing authorities, and policymakers face a race against time. Each time a mortgage matures or a property changes ownership, there is a risk that another affordable housing building could disappear.
For many residents living in these apartments today, the outcome will determine whether they can continue to remain in their communities.