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2021 Rhode Island first-time homebuyer assistance programs - Bankrate.com

If you’re a first-time homebuyer in Rhode Island, you could be eligible for an affordable mortgage and down payment assistance through Rhode Island Housing, the state’s housing finance agency. While requirements vary, first-time buyers generally must complete a homebuyer education class in order to qualify for these programs. Here’s a look at what’s available if you’re purchasing your first home in the state.

Rhode Island first-time homebuyer loan programs

RIHousing First-Time Homebuyer Loan

Rhode Island Housing (RIHousing) offers up to 100 percent financing through its First-Time Homebuyer Loan program and accompanying down payment assistance. The First-Time Homebuyer Loan can be a conventional loan (20- and 30-year terms available) or an FHA loan, VA loan or USDA loan, all with competitive interest rates. These loans can be obtained through RIHousing directly or through one of the agency’s participating mortgage lenders.

To qualify for a First-Time Homebuyer Loan, you’ll need to complete a homebuyer education class — it can be done online — and meet the program’s home purchase price limit of $453,863, as well as household income limits. Currently, these are up to $97,646 for households of up to two people and $112,293 for households of three or more.

Rhode Island down payment assistance

RIHousing 10kDPA loan

RIHousing’s 10kDPA program is a $10,000 deferred down payment assistance loan for first-time homebuyers that doesn’t require monthly payments until the home is no longer your primary residence. That means you can enjoy interest-free assistance until you sell or move out of your home.

To be eligible for the 10kDPA program, you must have a minimum credit score of 660 and complete a homebuyer education course. You’ll also need to get your first mortgage through RIHousing (or any participating lender) and meet purchase price and household income limits, which are the same as those for the First-Time Homebuyer Loan program.

RIHousing Extra Assistance loan

First-time homebuyers in Rhode Island might also qualify for down payment assistance up to $15,000 or 6 percent of their home’s purchase price, whichever is less, through RIHousing’s Extra Assistance loan. The interest rate on this loan, in most cases, is the same as the one on your first mortgage, with no extra fees. To qualify, you must:

  • Be a first-time buyer taking out an RIHousing first mortgage
  • Intend to occupy the home as your primary residence
  • Have a minimum 620 credit score
  • Complete a homebuyer education course

Other Rhode Island homebuyer assistance programs

FirstHomes Tax Credit

In Rhode Island, the FirstHomes Tax Credit offers first-time homebuyers (or those buying in specific targeted areas) a mortgage credit certificate (MCC). The MCC is a federal tax credit equal to as much as 20 percent of your mortgage interest, up to $2,000 per year. You can leverage the MCC for as long as you have your mortgage and as long you live in the home as your primary residence.

To obtain an MCC, you must pay a $100 reservation fee. There might be other fees, as well. You must also meet household income limits ($93,623 for a one- or two-person household and $107,667 for a household of three or more) and the home’s price can’t exceed more than $441,176.

Keep in mind that while this tax credit can help you qualify for a loan and save you money on your tax bill, you could be subject to a federal recapture tax if you sell your home within nine years at a profit, and are now earning more than the household income limit.

Other first-time homebuyer loan programs

Along with RIHousing’s programs, first-time homebuyers in Rhode Island might also qualify for other types of affordable mortgages, including FHA, VA or USDA loans. These can be ideal if you don’t have a substantial down payment or have a lower credit score. There are also specialized programs geared towards certain types of borrowers, such as teachers or police offers. Head over to Bankrate’s guide to first-time homebuyer loans and programs to see what options might be available to you.

For other Rhode Island homeownership programs, including by city, visit HUD.gov.

Get started

If you’re interested in an RIHousing mortgage program, you can visit the agency’s website to learn more. If you want to apply for one of these programs, check out this list of mortgage lenders, who can help guide you through the process. Remember: No matter which mortgage you ultimately get, interest rates and fees vary by lender, so it’s always a good idea to get multiple quotes and compare loan offers carefully before committing to one.

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