Last Updated on August 7, 2022 by Danielle McDonald
Mortgage Assistance for Homebuyers in Rhode Island
Housing Works Rhode Island Spring7500 Program
Rhode Island Housing (RIH) created the Spring7500 Program to help potential homebuyers afford the costs of buying a new house. This program is a forgivable loan secured with a second mortgage which is targeted at six Rhode Island communities that are most affected by the foreclosure crisis. These affected areas include Providence, Pawtucket, Woonsocket, Warwick, Cranston, and East Providence. This program also provides $7,500 down payment assistance to first-time homebuyers.
The First Down Program is for qualified first-time homebuyers who:
- are buying a condominium or a family home with 1-4 bedrooms;
- meet the Rhode Island Housing loan requirements and income limit;
- are funding their first mortgage with a Rhode Island Housing or participating lender;
- plan to reside in the home as their primary residence.
After five years of ownership, the down payment assistance of $,7500 is forgiven, provided that the borrower uses it as their primary residence. Therefore, buyers do not have to repay the amount if they live in the house for at least five years. One- to four-family homes or eligible condominiums have a maximum loan limit of $424,100.
The qualified first-time homebuyer’s annual household income must be at least $87,360 for a household of 1-2 people, or $101,920 if a household of 3 or more persons.
The First Down Program is only for applicants who are funding their home using a Rhode Island Housing first mortgage. This program is available through their network lenders and the Rhode Island Housing Loan Center. However, RIH requires that a part of the grant be repaid if the buyer sells, refinances, or transfers their home in five years of closing the loan.
This is similar to the Down Payment first-time homebuyer assistance programs in Pennsylvania.
Rhode Island Housing’s Extra Assistance Program
The RIHousing’s Extra Assistance program offers down payment assistance for qualified first-time homebuyers in Rhode Island. This program helps homebuyers overcome the most difficult hurdle to homeownership: the down payment.
Eligible applicants may receive a second mortgage to cover up to 6% of their purchase price, or $15,000, whichever is lower, if they qualify under the Extra Assistance program. However, the interest rate for an Extra Assistance loan is almost always the same as that of the applicant’s first mortgage at RIHousing. In addition, there are no fees and charges.
All applicants must meet the following requirements to qualify for RIHousing’s Extra Assistance program:
- you need to be a first-time homebuyer purchasing a home for 1-4 families or a condominium in Rhode Island;
- have at least a credit score of 620;
- take a course in homebuyer education (available online or in person through RIHousing);
- apply for a first mortgage funded by RIHousing mortgage via a Participating Lender or the RIHousing Loan Center;
- reside in the home as their primary residence.
Are you interested in the First-Time Homebuyer Assistance Programs in South Carolina?