What is Rhode Island Housing?
As
the state’s principal housing agency,
Rhode Island Housing
helps low- and moderate-income Rhode Islanders buy homes. To make that possible,
we offer below-market-interest-rate loans, homebuyer education and other services
to make it easier to buy a home. Over the years, we have helped more than 59,000
families buy homes.
Who Qualifies for Our Low-Interest Loans?
We want to help people who really need it. That’s why our FirstHomes Program
has a few restrictions.
- You must be a first-time buyer. That’s someone who has never owned a home
or has not had an ownership interest in his or her primary residence for at least
three years.
- There are income restrictions. In most of Rhode Island, you can earn no more than:
$77,300 for households of one or two persons
$88,950 for households of three or more persons
- In most of Rhode Island, you can buy a house that costs no more than:
$374,000 for single family homes or condos
$400,000 for existing two-family homes
$500,000 for existing three- and four-family homes
- The house must be located in Rhode Island.
- You must live in the house as long as you have a mortgage with us.
How Low Are Your Interest Rates?
Income
|
Rate
|
|
$Up to $30,000
|
5.870% APR
|
|
$30,001 to $35,000
|
6.010% APR
|
|
$35,001 to $40,000
|
6.120% APR
|
|
$40,001 to $45,000
|
6.120% APR
|
|
$45,001 - Limits
|
6.210% APR
|
These are 30-year mortgages with an origination fee or point equal to one percent
of the amount borrowed. A 0-point option is available; just add one-quarter of one
percentage point to the 1-point rate. Rates are subject to change. Borrowers earning
no more than $40,000 receive "stepped" rates, which increase by one-quarter
of one percentage point every two years until they reach the top step, where they
remain for the life of the loan. Households in the top income bracket will receive
the top step rate for the entire 30-year term of the loan. We also offer loan options
with 35-year and 40-year terms.
In certain areas of Central Falls, Newport, Pawtucket, Providence and Woonsocket,
your household income can be as high as $92,760 for households of one or two persons,
or $108,220 for households of three or more persons.
Call 401 457-1111 to get rate information on all Rhode Island Housing programs 24
hours a day.
Do I Need a Big Down Payment?
We offer low-down-payment and no-money-down options. All you need is $1,500 of your
own saved funds.
How Much Can I Borrow?
The amount you can borrow depends on your household income and consumer debt. We
can help you figure our how much you can afford, free of charge. Just call us at
(401) 450-1344 or (888) 744-4770 or visit the
HomeBuyers section of RI Housing's website
and click on “How much can I borrow.”
What If I Need More Help?
Depending on your income, you may qualify for a variety of extra assistance to help
make buying a home more affordable.
- Our Equity Rebate is a grant equal to 2% of the purchase price
of the house you buy or $1,000, whichever is less. Use the grant to pay closing
costs.
- Use our Silent Second Mortgage to lower your monthly mortgage payment.
This is a deferred-payment second mortgage of up to 10% of the purchase price. You
make no payments on the loan as long as you have a first mortgage with us. However,
the Silent Second Mortgage must be repaid when you sell your home, transfer ownership
or refinance.
- Our Closing Cost Assistance Loan enables you to borrow up to 5%
of the purchase price or $5,000, whichever is less. Use the loan to pay closing
costs. The loan must be repaid over five to 15 years, depending on the amount borrowed.
The minimum loan is $500.
If your household income is no more than $30,000, you are eligible for the Equity
Rebate, Silent Second Mortgage and Closing Cost Assistance Loan. If your income
is no more than $34,000, you are eligible for the Silent Second Mortgage and Closing
Cost Assistance Loan. If you earn no more than $40,000, you are eligible for the
Closing Cost Assistance Loan.
Become a Better Homebuyer
Take our free class about buying and owning a home. Offered once a week, the workshop
covers qualifying for a mortgage, working with Realtors, correcting credit problems
and more. If your down payment is less than 5%, you must attend the class. Contact
us at (401) 457-1245 or
tfisher@rhodeislandhousing.org
to register.
Become a Better Landlord
Borrowers who buy a two-, three- or four-family property must take our landlord
education class. Learn about renting apartments, repairs and everything else you’ll
need to know in order to be a successful landlord. Call The Housing Network at (888)
722-1461 to register.
Get Fast Answers
You can get a faster answer on your mortgage application if you do some work ahead
of time. Here are some things you should have when you apply for a mortgage.
- A signed Purchase and Sales Agreement.
- Your tax returns for the past three years with all schedules and W-2 forms.
- Your two most recent pay stubs or other proof of employment or income covering at
least the past 30 days.
- Your three most recent checking account and savings account statements.
- Your final divorce decree, if applicable.
- A year-to-date profit and loss statement if you are self-employed.
We also recommend that you order a free copy of your credit report. Your credit
history is one of the factors that lenders like us consider when we make a loan.
Take the time now to correct any mistakes on your credit report before you apply
for a loan. You can order a free copy of your credit report once every 12 months.
Call (877) 322-8228 or visit
www.annualcreditreport.com.
Buy More
Increase your purchasing power by enabling you to qualify for a larger mortgage
than you would with a conventional loan. You will be qualified on the basis of an
interest-only monthly payment. After five years, you will begin paying off the principal.
In total, the loan payments will be spread over 35 years. Use the additional borrowing
power to buy a bigger house, a house in better condition or a house in a more convenient
location.
CASH Assistance
Receive a grant equal to 3 percent of your mortgage with us. We will forgive the
grant in equal annual installments over the first seven years of ownership. You
must repay the outstanding balance of the grant only if you transfer ownership of
the home or refinance our mortgage within the first seven years.
FHA
Combined with many of the programs listed here, "FHA" enables you to buy
a home with just 3% down. As little as $1,500 must come from your own saved funds.
The balance of the down payment can be a gift from your family or employer.
Purchase Plus
"Purchase Plus" enables you to borrow the money to buy a house and make
up to $10,000 of repairs or improvements all in one loan.
Buy and Rehab Programs
Use our purchase/rehabilitation loans to borrow the money to buy a house and make
major repairs and improvements all in one low-interest loan. The total cost of buying
the house and making the repairs and improvements can not exceed our purchase price
limits.
No-down-payment Option
Our 100% financing programs enable you to buy a home even if you don't have the
money for a down payment. You can borrow up to 100 percent of the purchase price
of the home you wish to buy at our low FIRST HOMES interest rates.
Energy Saver
All of our mortgage programs may be combined with our "Energy Saver" option.
Energy Saver enables you to use any of these programs to buy a house and make an
additional $5,000 of energy-related improvements all in one loan. Call 784-3700
to arrange a free energy inspection by RISE Engineering as soon as you have found
a home you want to buy.
203k
“203k” enables you to borrow money to buy a house and make major repairs
all in one low-interest loan.
VA
Combined with many of the programs listed here, “VA” enables qualified
active and retired members of the United States armed forces to buy homes with no
money down.
Zero Down
“Zero Down” enables you to buy a home even if you don’t have the
money for a down payment. Zero Down combines our low-interest loans with federal
loan guaranties that let you borrow up to 100% of the purchase price of the home
you wish to buy. Homes must be located in rural and suburban areas of Rhode Island,
generally outside of Greater Providence.
Recapture
If you sell your house within nine years of buying it, you may be subject to a federal
IRS regulation called “Recapture.” You may be subject to Recapture only
if your income increases significantly and you realize a net profit on the sale
of your home. Recapture, if any, is due at the time you sell your house.
Are There Any Exceptions to Your Income or Purchase Price Restrictions?
We relaxed our usual restrictions to encourage homeownership in certain areas of
Central Falls, Newport, Pawtucket, Providence and Woonsocket. You do not have to
be a first-time home buyer. In addition, there are higher income limits. Households
of one or two persons can earn no more than $97,400 and households of three or more
persons can earn no more than $113,500.
There are higher purchase price limits, too.
In those targeted areas, you can pay as much as:
- $450,000 for single family homes or condos
- $500,000 for existing two-family homes
- $500,000 for newly built two-family homes
- $600,000 for existing three- and four-family homes
For more information, call Rhode Island Housing at (401) 450-1344 or (888) 744-4770,
email them at
loaninfo@rhodeislandhousing.org
or visit them at
www.rhodeislandhousing.org.