What is RI 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 mortgages, down payment assistance and other help. Over the years, we have helped more than 58,000 families buy their first house.

Who Qualifies for Our Low-Interest Loans?
We want to help people who really need it. That’s why our First Homes 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:
  $81,200 for households of one or two persons
  $93,300 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?

Rates shown below are valid as of 10 AM April 5, 2007.

* $87,800 for households of one or two persons and $102,400 for households of three or more persons in certain areas of Central Falls, Newport, Pawtucket, Providence and Woonsocket.

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 rate for the entire 30-year term of the loan. These are 30-year mortgages. There is an origination fee of one point, or 1% of the amount you borrow. Call 457-1111 to get the latest rates 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@rihousing.com 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.

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 low-interest loan.

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.

Energy-Saver
All of our mortgage programs may be combined with our “Energy Saver” option, which enables home buyers to include up to $5,000 of energy-related improvements in any of our low-interest loans. Call RISE Engineering at (401) 784-3700 to arrange a free energy inspection as soon as you have found a home you want to buy.

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 RI Housing at (401) 450-1344 or (888) 744-4770, email them at loaninfo@rihousing.com or visit them at www.rihousing.com.