Cranberry Isles nonprofit keeps ‘house on the corner’ affordable forever

Kaitllyn and Cory Duggan will move into the former Johnson house.

Thanks to the work of Cranberry Isles Realty Trust (CIRT) and its partners, the community of Islesford now has a house that will remain affordable to year-round individuals and families in perpetuity.

Kaitlyn and Cory Duggan worked with CIRT and became the first family to purchase the house with CIRT's financial assistance in exchange for restrictive affordability covenants.

This summer the CIRT board decided to make an offer on the property which had been on the market for over a year and had just come down in price. The house is a modest two-story dwelling located on a corner lot boasting lupines, lilacs, an apple tree, and an open flat area perfect for a garden.

CIRT assigned the purchase and sale agreement to the buyers (the Duggans) in order for them to receive financing, with an agreement that CIRT would bridge the gap between what they could afford and the sale price of the house. CIRT also covered closing costs, funding to update the electrical work, and materials to better insulate the house.

The Duggans embarked on their homeownership adventure on October 23, when they closed on their loan at Machias Savings Bank. For CIRT, the date marked a significant achievement—the first homeownership opportunity in the Town of Cranberry Isles that will remain affordable to future buyers. It was the culmination of many months of hard work that began with weeks of negotiations on the purchase price.

A generous donation of her commission by CIRT's realtor, Katrina Carter, enabled CIRT to make a final offer that was acceptable to the seller. Jack Gibbons of Machias Savings Bank worked tirelessly to make a loan product work for the buyers and pulled off an amazingly quick turn around time on the closing. His patience and persistence guaranteed the home purchase happened. CIRT took out a short-term bridge loan at Bar Harbor Bank and Trust while they continue to raise funds for the project. All closing costs on CIRT's bridge loan were generously dropped by the bank. In-kind contributions, fee waivers, and dedicated professionals are invaluable to non profit success.

Island Housing Trust (IHT), a workforce housing organization on Mount Desert Island, shared its affordability covenants and resale formula with CIRT. IHT's covenants were fair to the homeowner, allowing them to sell their house for the purchase price plus improvements and appreciation based on change in median income for the State. The resale formula includes a price cap. CIRT made some constructive additions to these documents and focused on defining the difference between maintenance and improvements. This distinction is crucial when dealing with older houses so often found on the islands. Both the owners and covenant holder (CIRT) know what is classified as an improvement for inclusion in the resale formula, avoiding conflicts and inflated value.

Because it is uncommon for any year-round house, let alone one under $200,000 to come on the Island market, protecting this community asset was essential. Many community members have given generous donations which count toward CIRT's Island Challenge Fund grant through the Genesis Community Loan Fund. Once CIRT raises $25,000 locally, Genesis will give a $25,000 match. Additionally, CIRT received a $25,000 Affordable Coast Fund grant from the Island Institute. Because of these contributions CIRT has made a long-term housing investment of over $80,000 on Islesford. CIRT continues to fundraise to pay down project costs, however.

Cory, a carpenter, and Kaitlyn will be able to do some needed work on the house themselves and gain a little sweat equity. As soon as the electrical work is updated, they will be able to move out of the CIRT rental house where they currently reside, and spend their second winter on the island in their new home. They originally came to Islesford three summers ago when Kaitlyn came to work with Marian Baker at Islesford Pottery. They married on Islesford last September.

The CIRT board is not only proud of its achievement and pleased to welcome the Duggans as long-term community members, but also motivated to move forward on new projects and assist other individuals and families in their desire to find year-round affordable housing.

In addition to this first homeownership project, CIRT also has three rental units and plans to expand its programs to include a land bank and accessory apartments. Anyone interested in learning more or participating in any of CIRT's programs should visit CIRT at www.cirtrust.org.

Alyson Mayo and Eric Dyer are former Island Institute fellows working with Cranberry Isles Realty Trust.