First-Time Homebuyer Programs in Rhode Island

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In Rhode Island, with an average home value of $470,378, you would need a down payment of $94,076 to avoid private mortgage insurance.

Fortunately, there are first-time homebuyer programs available in Rhode Island to help you achieve homeownership. Additionally, some mortgages allow first-time homebuyers to put less down on a home, but these usually have income requirements and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

Rhode Island offers grants and loans to assist first-time homebuyers in covering down payments and closing costs. We compiled the first-time homebuyer programs offered by Rhode Island Housing (RIHousing) to help you find the best option for your particular needs and situation.

The First-time Homebuyer Loan from RIHousing provides eligible buyers with access to affordable mortgage options, including up to 100% financing on their home’s purchase price. The program includes a maximum loan amount of $736,000 for conventional, Non-MRB, and FHA loans, and a maximum purchase price of $838,592 for all MRB loans. Buyers may also receive down payment assistance through RIHousing’s Extra Assistance program to cover down payment and closing costs.

The 15kDPA program from RIHousing provides $15,000 for down payment and/or closing costs for eligible first-time homebuyers. This loan features 0% interest, no monthly payments, and is only due if the homeowner sells, transfers or no longer occupies the property as their primary residence. Borrowers must combine the 15kDPA with a RIHousing-funded first mortgage to qualify.

The FirstGenHomeRI program offers $25,000 in forgivable down payment and closing cost assistance for eligible first-generation homebuyers in Rhode Island. This 0% interest loan does not require monthly payments and is forgiven after five years if the home remains the borrower's primary residence. The program is available only in specific communities and supports individuals who are the first in their families to purchase a home.

RIHousing's Extra Assistance Program offers down payment assistance of up to 6% of the home’s purchase price or a maximum of $20,000, whichever is lower. The loan aligns with the interest rate of the borrower’s RIHousing first mortgage if applicable. The loan is repayable over a 15-year term and acts as a second mortgage. Borrowers must also meet income and purchase price limits and use the funds for primary residences only.

Aside from statewide first-time homebuyer programs in Rhode Island, there are also city-specific programs available to help you pursue homeownership in a city of your choosing. Check out the table below for some of the cities in Rhode Island that provide first-time homebuyer programs for potential residents.

In Rhode Island, there are zero-down-payment loan programs that allow you to purchase a home without putting money down. USDA and VA loans are two government-backed options that come with no down payment.

USDA loans are designed to assist low- to moderate-income homebuyers in rural and suburban areas. The USDA loans are provided by the U.S. Department of Agriculture through its Rural Development Guaranteed Housing Loan program. This initiative aims to promote homeownership in less densely populated areas by offering financial incentives to eligible buyers.

USDA loans provide several benefits, including the possibility of no down payment and competitive interest rates. They are particularly appealing to those who may not have significant savings for a down payment. These loans also come with flexible credit guidelines, making them accessible to a broader range of potential homeowners. The program is designed to make homeownership more attainable for those who qualify.

To qualify for USDA loans, certain criteria must be met. The property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Additionally, applicants must meet specific income limits, which vary based on the location. Unfortunately, the dataset does not provide concrete examples for comparison. These income limits are set for a four-person, low-income household, ensuring that the program targets those most in need of assistance.

VA loans are a unique mortgage option provided by the VA loans program, which is issued by the U.S. Department of Veterans Affairs. These loans are specifically designed for veterans, active-duty service members, and certain members of the National Guard and Reserves, offering them an accessible path to homeownership.

VA loans offer several benefits, including no down payment requirement, which can significantly reduce the initial cost of purchasing a home. Additionally, they do not require private mortgage insurance (PMI), further lowering monthly payments. VA loans also typically have lower interest rates compared to private loans, making them a cost-effective option. As of December 2024, the APR for a 15-year fixed-rate VA loan in Rhode Island is 5.72%, while the APR for a 30-year fixed-rate VA loan is 5.94%.

Eligibility for VA loans is based on specific criteria, including the length of service or service commitment, duty status, and character of service. Additionally, applicants must meet certain income limits that vary depending on the location. A valid Certificate of Eligibility (COE) is also required to apply for a VA loan, ensuring that applicants meet the necessary qualifications for this beneficial program.

First-time homebuyers in Rhode Island can take advantage of low-down-payment loan programs that allow them to finance their home with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA loans and conventional loans are often compared as they are the two most common types of mortgages. FHA loans require a minimum down payment of 3.5%, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements compared to FHA loans.

As of December 2024, the APR for a 15-year fixed-rate conforming loan in Rhode Island is 5.79%, while the APR for a 15-year fixed-rate FHA loan is 7.98%. APRs on FHA loans can be higher because there tend to be more fees and extra costs associated with borrowing money on government-backed loans.

You can use our FHA vs. conventional loan calculator below to help you compare both FHA and conventional mortgage programs and determine the best option for you.

We answered frequently asked questions about first-time homebuyer programs in Rhode Island to help you choose the best option and move closer to homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in Rhode Island to help you with the homebuying process.