Last week, Rhode Island General Treasurer James Diossa announced that RI AnchorHome — which provides first-time homebuyers with affordable mortgage options — would be expanding into its third phase.
The third phrase of the program — which was created in response to rising housing prices and interest rates in the state — introduces new partnerships with BayCoast Bank, Bristol County Savings Bank and Westerly Credit Union, according to a press release from the R.I. Office of the General Treasurer.
When eligible homebuyers are approved for a mortgage through a partner financial institution, the state deposits matching funds at the same institution, enabling lenders to offer more affordable mortgage products.
Since the initial launch last December, 119 first-time homebuyers have benefitted from the program’s assistance.
According to Tim Chaves, executive vice president and chief revenue officer at Bristol County Savings Bank, their bank works closely with first-time homebuyers who are in the pre-approval and mortgage stage to create a “full financial picture and identify the best available options,” Chaves wrote in an email to The Herald.
This can involve offering a discounted interest rate, which would lower monthly payments and can “make a meaningful difference in whether homeownership feels within reach,” Chaves added.
The program is restricted to first-time homebuyers whose household income is capped at 110% of the statewide income limit. As part of the program, participants have a 30-year fixed-rate mortgage with a starting interest rate of 3.99%, and they are not subjected to private mortgage insurance. Participants also must engage in homeownership counseling, where they learn about how to navigate the mortgage process in the long-term.
Executive Director of HousingWorks RI Brenda Clement applauded the program’s housing counseling requirement, adding that having first-time homebuyers learn more about the mortgage process is good for “long-term financial success.”
When Bristol County Savings Bank learned about the RI AnchorHome, they immediately reached out to get involved. “Supporting homeownership is a key part of our mission as a community bank, so we were eager to be part of a solution that can make a meaningful difference for local families,” Chaves wrote.
John McMahon, senior vice president of community engagement at BayCoast Bank, wrote in an email to The Herald that the BayCoast Bank’s partnership with RI AnchorHome “brings together public and private resources to help make homeownership more attainable for Rhode Islanders.”
Through the program, BayCoast Bank will be able to contribute to “stronger neighborhoods and a healthier, local economy,” McMahon added. “At BayCoast, we’re about opening doors (and) creating opportunities.”
RI AnchorHome’s assistance helps “first-time homebuyers get their foot in the door,” Clement said.
“Home ownership costs have greatly outpaced the average worker wage,” Clement said. “As mortgage rates change or go up, every percentage point kind of knocks an income level out of the ability to buy and purchase a home,” she added.
Diossa said the Office of the General Treasurer often thinks about scaling the program. “Our hope is that we could continue this program, but we’re very limited as to funding,” he said. “There might be opportunities to go talk to the legislature to see if there’s ways to get some support to continue the program on the production side.”
Kelly Ding is a senior staff writer for the community and culture beat. She is from College Station, TX and plans to concentrate in IAPA on the policy and governance track. In her free time, she loves to explore new coffee shops, curl up with a good book, and be a gym rat.
