Developer seeks funding to turn former Saco church into affordable housing

The City of Saco is applying for funding to help a non-profit developer transform a former church to affordable housing.

In 2019, the city purchased a former Methodist church building built in 1878 at 12 School St. for $240,000, with the intention of rehabbing it for a teen center and community space. In 2023, the city decided this plan was cost prohibitive, and went on to pursue other city space for a teen center. The City Council and staff determined that a better use for the building would be affordable housing.

Project Home has proposed a plan that would transform the former church into seven apartments – four studio apartments and three one-bedroom apartments. Project Home is a non-profit based in Portland focused on providing stable, affordable housing.

The non-profit has proposed purchasing the property from the city for $1 with the intention of developing it into seven affordable units. The plan includes two units for young adults who have just left the foster care system and are making 30 percent or below the area median income (AMI), as defined by the Department of Housing and Urban Development. The rest of the apartments would be available to those making 80 percent or less of the AMI. Two of these apartments will be leased by the city and will be available for new city staff.

Under the proposal, the building would include a multi-purpose room that could be used by residents, local non-profits and the city for meetings.

“This is a great example of a public-private partnership that will meet what I believe is a city goal in the area of affordable housing,” said Councilor Nathan Johnston at the May 11 City Council meeting.

The city has applied for $250,000 funding for the project through the Community Development Block Grant (CDBG) Housing Assistance. CDBG is a state program that distributes federal money from the U.S. Department of Housing and Urban Development.

Should the city receive the grant, the developer must provide 20 percent matching funds. The city is not required to provide any matching funds.

Project Home CFO Dan Black said the organization will supplement the city’s funding with ither grant money, loans, investor funds and historic tax credits.

The property is under a purchase and sale agreement, and will remain city property until the project is completed, said City Administrator Ryan Pelletier.

Saco Bay News Publisher Liz Gotthelf can be reached at newsdesk@sacobaynews.com.