Lambert Woods South Limited Equity Cooperative FAQs

- Relevant for Lambert Woods South only---


What Is a Limited Equity Housing Cooperative?
What is a Limited Equity Housing Cooperative?
A housing cooperative is a legal entity where residents jointly own and democratically manage a residential property. Each household has their own complete home with a private kitchen and bathroom — like a condo or apartment. A Limited Equity Housing Cooperative means that part of the equity is owned by individual residents and the remainder is owned by the cooperative as a whole. This ensures the homes remain permanently affordable to future residents.
Benefits of Limited Equity Cooperative Housing include:
•Long-term housing security and stability
•Democratic decision-making by resident-owners about monthly housing costs, building investments, and policies
•Similar tax benefits as ownership
•Ability to grow community and mutual support
•Social and recreational amenities
•Affordability for future residents
•Can pass on stable costs to family members across generations
 
Will I have my own apartment or townhome?
Yes. Each resident household has their own flat or townhome.

Why should I buy into a cooperative instead of renting?
When you buy into a cooperative, you are a partial owner of the housing development. You get to participate democratically in the management of your housing, have long-term stability, and your monthly expenses only pay for the actual expenses of the building. There is no outside landlord earning a profit, so your housing costs should stay stable over time.

Why should I buy into a cooperative instead of buying my own home?
Cooperative homeownership does not require getting a mortgage or paying the full cost up front, and is easier to leave. It can be a more affordable and accessible way to own your home — especially given the high cost of homeownership in Portland. Co-op residents can also choose this path to be closer to work and community, to put money into other investments, to live where they can know their neighbors, and to support a more just economic system. Co-op ownership can require less money up front than a traditional down payment, and households that wouldn't qualify for a mortgage can still become owners.

Isn't earning leveraged equity through homeownership essential to building middle-class wealth?
The system that boosted homeownership after WWII created wealth for property owners but higher rents and fewer affordable purchase opportunities for everyone else. Limited Equity Co-operatives provide lower equity in housing investments in exchange for permanently affordable mixed-income housing. Co-op residents earn equity through their share price plus the other benefits of owning real estate: stability of housing costs, decision-making power, improved credit, and stable tenure. Many co-op residents would otherwise be lifelong renters, or might have to buy a home far from their work and community.
In housing co-ops, community is something members treasure — not just because it feels good, but because it is proven to help us succeed in our jobs and ensure our kids achieve in school. It protects our health, keeps us safe, keeps housing costs low, increases disposable income, enriches our neighborhoods, and allows us to live out our old age with dignity. We consider this a form of wealth you can enjoy while living here and pass on to your children or the next generation.

Has this model been popular and successful?
UHAB in New York has supported over 20,000 units of Limited Equity Cooperative housing for several decades.

Where can I learn more about Limited Equity Cooperatives?
The National Cooperative Business Association has an Advancing Housing Affordability Through Shared Ownership Initiative: Catalog of Cooperative Housing and Community Land Trust Models.
https://www.uhab.org/ — trainings, conferences, and resources related to Limited Equity Cooperatives
https://ebprec.org/ — East Bay Permanent Real Estate Cooperative, with many innovative practices

Eligibility & Income
What are the income restrictions?
When residents first apply, they must show their income is within certain limits. Lambert Woods South is generally for households earning less than 100% of the Area Median Income (AMI). Up to 20% of the first round of sales can be for households making up to 120% AMI if homes cannot be filled at the lower income level. Income is based on gross income.
The City of Portland will oversee the first round of income verification. All applicants will need to provide: an Income Verification Form (listing income of all household members and household size), two most recent pay stubs, most recently filed federal tax return, and IRS Form 4506 (which authorizes the City to obtain federal tax returns).
We also require households to show a minimum income so they are not paying more than 50% of gross income toward housing. These income tests are only done before you move in — if your income changes later, you can stay and your costs remain the same.

What happens if someone's income changes over time?
Income is only tested when you first apply to move in. There is no annual income verification. The household must pay the assigned monthly carrying charges regardless of whether income goes up or down. Households that don't pay risk eviction.

Is there a priority given to choosing residents?
If there are more applicants than units initially, priority may be given to: first-time homebuyers; current City residents who have lived in Portland as their primary residence for the past two years; people working in Portland; and people who are early on the deposit list.

I am a partial owner of a mobile home on rented land. Does that count as owning a home?
No. A mobile home sitting on a rented lot in a mobile home park — not permanently affixed to land you own — would not qualify as real property.

What if all I want is to rent a unit?
We are hoping all homes will be occupied by owner-members.
 
Costs & Finances
What is the share price and how much will it cost?
The share price is the payment to purchase your part of the cooperative, paid up front before you move in. We currently expect share prices to be $5,000. When you leave the co-op, you will get back your share plus any approved appreciation.

What are the monthly costs?
By state law, the monthly carrying cost of all homes must be affordable to households making 100% of the Area Median Income (AMI) for Cumberland County. Current estimates are for residents to pay a monthly amount including utilities ranging from roughly $1,750 to $2,750, priced by unit size. Income limits and rents are adjusted annually by HUD in April, so the project will likely reflect 2026 numbers, which could be higher.

Will my monthly charges change over time?
Monthly charges will adjust each year based on the co-op's operating needs, including debt service, taxes, and inflation. Resident-owners and the Board make decisions together about any increases based on actual expenses. Maine state law requires monthly payments to remain affordable to households at 100% AMI. It is also possible that expenses decrease over time.

What is a TIF? Will our monthly payment go up when the TIF ends?
Maine allows municipalities to create Affordable Housing Tax Increment Financing (AHTIF) districts to encourage affordable housing development. The AHTIF allows 75% of new tax revenue to stay with the co-op to help keep it affordable to households of diverse incomes. It also protects the City from having to share uncollected tax revenue with other municipalities. Part of the primary mortgage is timed to end when the AHTIF ends, so there will be no significant change in monthly costs at that point.

Will the mortgage eventually be paid off?
Yes. The co-op holds a blanket mortgage that is paid off over time. Once paid off, monthly expenses for residents will decrease. If the co-op later borrows more or refinances to make property improvements, it may take longer to pay off. There will still be expenses like taxes, insurance, and savings for repairs and future capital investments.

Can someone borrow against the equity they own?
A member's equity equals the original share price plus up to 6% per year appreciation (the maximum allowed by state law). Maine statute provides that a member's share is a real interest that banks may lend against, similar to other forms of collateral. The co-op's bylaws specify how much appreciation to actually allow and what happens if a member defaults on a loan and a bank obtains their share.

What happens if someone defaults on their rent?
The co-op will have an accountability process as guided by its bylaws and leases, which could include payment plans, rent forgiveness, or terminating membership and pursuing eviction.

What happens if there is a large unexpected expense?
With new buildings plus warranties and insurance this should be rare, but it is possible. The co-op budgets for unintended expenses through an annual operating contingency and capital and operating reserves. If the budget cannot cover an expense, the co-op will either need to borrow money or charge a special assessment to members.

Do resident-owners get tax benefits like depreciation or mortgage interest deductions?
For resident-owners who itemize, there may be multiple benefits. Co-op members can take the homeowner deduction for their share of real estate taxes and interest on the co-op's underlying mortgage(s). The accountant or treasurer typically prepares a note and a mortgage interest 1099 for each member with their share. The co-op itself typically takes depreciation. Owners are also eligible for Maine's Homestead Exemption, which will require coordination with the City.

If I reserve a unit, can I get my deposit back if I change my mind?
Yes. Deposits are returnable up to the point that construction begins in Summer 2026.
 
Living in the Co-op
Can I live in the co-op permanently?
Yes. Co-op ownership provides flexibility to move to units of different sizes as your family changes. We hope to create intergenerational living across a diversity of housing sizes.

Will I have to attend lots of meetings to be a member?
There is meaningful participation expected, but not an overwhelming time commitment. Some training is required before move-in. The full membership will meet at least once a year to make major decisions and elect board members. The Board will meet regularly to make decisions and oversee management. The co-op will start with outside property management but can choose to take on aspects of self-management over time.
Members may also join committees supporting community life — Maintenance, Gardens, Social Events, Policies, and others. We ask owners to plan for about 4 hours per month, focused on talents and capabilities you have or want to develop. This could be attending meetings or volunteering for agreed-upon activities: landscaping, babysitting, bookkeeping, managing a project like building a shed, finding a contractor, or helping organize a social event.

Can I make changes to my unit?
Member-owners cooperatively own the whole development and hold proprietary leases to their individual units. Significant changes — like replacing kitchen counters — will likely require permission from the co-op. Also, unlike a market-rate unit, you are restricted in what you can sell your share for, so if you leave you will likely not make back everything you invested.

Are the rules often very strict and restrictive?
Not at this time. Residents can vote democratically on new rules if they choose. If there is something you are particularly concerned about, please ask.

What happens when I want to leave? What if I want to buy a home after?
You would market your share using the City website, the co-op's connections, social media, and word of mouth. The new buyer would pay you the current value of your share. At the same time, you could be shopping and closing on a new home and try to align the timing. The goal is that you would not own both the co-op unit and a new home indefinitely, since the co-op unit is meant to be your primary residence.

Can I pass on my unit to a family member or friend?
Yes. If you die and leave your unit to your child, there is no income check at the time of transfer. There would be an income check if you want to sell or give it to your child while still alive. Either way, the child must adhere to the same restrictions when the time comes to sell.
Per the City's IZ policy, upon death the City shall (except for good cause) consent to a transfer to: (A) the spouse of the deceased owner (if not a joint tenant); (B) the child or children of the deceased owner; or (C) household members who have resided in the unit for at least three years prior to the owner's death. Notice must be given within 90 days of death by the personal representative of the estate.
 
Building & Environment
How green are the homes? Will they be expensive to heat?
The homes will be very comfortable, resilient, and affordable to heat and cool. We will use electric heat pumps for heating and cooling, and Heat Recovery Ventilation (HRV) systems to ensure fresh air without drafts or heat loss. Heating and cooling will be included in monthly carrying charges paid to the co-op.
Buildings will achieve DOE Zero Energy Ready Homes Certification and exceed the LEED for Homes baseline (HERS 70) by 30%. See: https://www.energy.gov/eere/buildings/zero-energy-ready-home-program

I work from home. Will sound reduction be a factor in building materials?
Our current plan includes double-studded insulated walls between units. This treatment is less likely to apply between rooms within the same unit.
 
Community & Outreach
We are a bi-racial family and it is important to us to live in a multiracial community. Is diverse outreach planned?
Yes. Outreach to organizations representing diverse, BIPOC, and disadvantaged populations is a goal. We welcome conversations and connections with any group that can help us get the word out. Please contact us at [email protected] if you want to invite us to speak with a group.

What's the best way to connect with other potential residents and neighborhood associations?
There are Facebook pages for both the Libbytown and North Deering Neighborhood Associations. We also hope to gather groups of potential residents once we have taken a number of reservations.
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​COMPARISON OF BENEFITS OF DIFFERENT HOUSING OWNERSHIP MODELS