Rhode Island First-Time Home Buyer: 2025 Programs and Grants

What to know about buying a house in Rhode Island

Buying your first house can be a challenge. But Rhode Island offers special mortgages and education courses that can be a big help for first-time home buyers.

You might even be in line for down payment assistance to help cover your upfront costs, provided you qualify. Here’s how to get started.

In this article (Skip to...)

• RI home buyer overview
• Home loan options
• RI home buyer programs
• First-time buyer grants
• Buying in Rhode Island’s cities
• Resources
• RI mortgage rates

Rhode Island home buyer overview

The median home sales price in Rhode Island was $514,500 in September 2024, an annual increase of 9.4%, according to Redfin.

There are many reasons for this rise in home prices, such as a strong economy, low unemployment rates, and a high demand for housing. But first-time home buyers in Rhode Island can get help in the form of special mortgage loans and help with the down payment and closing costs.

Rhode Island home buyer stats

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Rhode Island

If you’re a first–time home buyer in Rhode Island with a 20% down payment, you can get a conventional loan with a low interest rate and no private mortgage insurance (PMI).

Of course, few first–time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot. Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low–down–payment mortgage programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum FICO score. You can usually stop paying mortgage insurance after a few years once you reach 20% home equity
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans and active-duty service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low–to–moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• RIHousing loans: May include competitive interest rates and down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender and real estate agent can help you find the right match based on your finances and home buying goals.

RI first-time home buyer programs

A state-affiliated organization called Rhode Island Housing (RIHousing) provides a range of home buyer programs to help individuals and families become homeowners. These programs offer a variety of mortgage products, including loans for home renovations. Also, RIHousing helps eligible applicants with their down payments and closing costs. This makes it easier for low- and moderate-income families to find affordable housing.

You can also take advantage of the agency’s home buyers education and counseling services. And if you already own a home, RIHousing can help you refinance your mortgage or get you approved for a Move Up loan to help you buy a bigger house.

RIHousing Requirements

To qualify for any of RI Housing’s programs, you’ll need to:

• Be a first-time buyer
• Buy a one- to four-unit family home or condominium within the state
• Undergo a home buyer education class
• Use an approved lender or the RIHousing Loan Center
• Have a credit score of 620 or higher
• Live in the home as your primary residence

RIHousing First-Time Homebuyer Loan

Through its First Time Homebuyer Loan program and related down payment assistance, RIHousing offers potential 100% financing. You can get these loans from RIHousing directly or from one of its participating lenders.

To get a First-Time Homebuyer Loan, you’ll need to take an online home buyer education class and meet the program’s home purchase price and household income limits. The program’s home purchase price limit is $546,752, and the household income limit is up to $112,555 for households with up to two people and $129,438 for households with three or more people.

RIHousing Homebuyer Renovation Loan

The RIHousing Homebuyer Renovation Loan is a program designed to assist Rhode Island home buyers in purchasing and renovating a home with a single loan. The program’s goal is to assist home buyers who want to purchase a fixer-upper and make necessary repairs or improvements.

It covers a wide range of renovation projects, including repairs, replacements, energy efficiency upgrades, and accessibility enhancements. The work must be done by a licensed contractor and approved by an inspector endorsed by RIHousing. Depending on the borrower’s preferences and financial situation, the program offers competitive interest rates and a variety of loan term options.

RI first-time home buyer grants

RIHousing offers both grants and repayable down payment assistance loans (“second mortgages”) to eligible first-time home buyers. The organization has a variety of programs that you can use in conjunction with an RIHousing mortgage.

All of the DPAs share the same income and purchase price limits:

• Purchase price limits: $546,752 for a single-family home to a four-family home or eligible condominium
• Household income limits: $112,555 (1-2 person household) or $129,438 (3 or more person household)

RI Statewide DPA Grant

A more recent program from RIHousing, the RI Statewide DPA Grant, provides down payment and closing cost assistance to help first-time buyers become homeowners in today’s competitive market. The help comes in the form of a grant that doesn’t require repayment, and qualified applicants are eligible to receive up to $17,500.

You must be a first-time buyer purchasing a primary residence in order to qualify. Additionally, you must fulfill the agency’s standard credit score, income, and home buyer education requirements.

10KDPA program

If you need to borrow only $10,000, you’ll probably opt for the 10kDPA program. But all of the $10,000 you receive must go on your down payment, so you’ll have to cover your own closing costs. You’ll need a credit score of 660 or higher to qualify.

The 10kDPA is a silent loan with no interest charges. So you make no monthly payments. Instead, you pay back the full amount you borrowed when you move out, sell the home, transfer it, or refinance, whichever happens first.

Extra Assistance program

You can borrow more with an Extra Assistance Loan: up to 6% of the purchase price capped at $15,000. But your loan is a normal second mortgage. So you have to pay it back in equal monthly installments over 15 years. You’ll also pay interest on the loan amount, probably at the same rate that you do on your new mortgage.

There are two pieces of good news. First, you can use one of these Extra Assistance Loans to help with your closing costs as well as your down payment. Secondly, your credit score needs to be only 620 or better.

FirstGenHomeRI program

FirstGenHomeRI is a special down payment assistance loan for first-generation home buyers in the cities of Central Falls, East Providence, Newport, Pawtucket, Providence, and Woonsocket. This homeownership program defines a first-generation buyer as “any person whose parents or guardian never owned a home during the homebuyer’s lifetime or lost the home to a foreclosure or short sale and does not own a home now.”

If you qualify, you could receive a $25,000 forgivable loan that can be used for the down payment and closing costs. This is a no-interest loan with no monthly payments, and it’s forgiven after remaining in the home for five years. As with most DPA programs, you’ll need to use an approved lender and complete a home buyer education course. More details can be found on the RI Housing website.

RIHousing First Homes Tax Credit

The First Homes Tax Credit program helps eligible first-time homebuyers in Rhode Island by providing a federal tax credit. This mortgage credit certificate (MCC) program allows homebuyers to claim a percentage of their mortgage interest payments as a direct credit against their federal income taxes, increasing affordability and promoting sustainable homeownership.

The tax credit can be claimed each year the homeowner continues to reside in the property.

Sadly, the program was suspended in February 2023. In any case, keep an eye on RIHousing for updates as it might be relaunched.

Other Rhode Island first-time home buyer assistance programs

Depending on where you’re looking for a home, you may be able to get help from a different program instead of RIHousing if you’re a first-time buyer.

The city of Woonsocket, for example, provides a DPA through the federally mandated HOME Investment Partnership Program. Borrowers who are approved can receive up to $5,000. After five years of living in the home as a primary residence, half of the amount is deferred, and the other half becomes a grant.

Potential buyers should research and explore all available options to find the best fit for their financial situation when purchasing a home in Rhode Island.

Buying a home in Rhode Island’s major cities

Home prices in Rhode Island’s three largest cities are a little lower than the statewide average, although prices have been increasing relatively quickly year-over-year.

Providence first-time home buyers

The median list price of homes in Providence was $425,500 in September 2024. That increased 9.1% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,765 for 3% down payment
• $85,100 for 20% down payment

The City of Providence runs a down payment assistance program in conjunction with the Housing Network of Rhode Island. It looks more attractive than the one offered by RIHousing. You may be able to borrow up to either $10,000 or $20,000, and this loan has a 0% interest rate and requires no monthly payments. Better yet, it will be forgiven in full after five years if you borrow up to $15,000, or after 10 years if you borrow more than that.

Of course, there are various conditions and eligibility criteria. And you’ll need a relatively modest income to get this help. So click those links to see if you qualify.

Cranston first-time home buyers

The median list price of homes in Cranston was $429,900 in September 2024. That rose 7.5% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,897 for 3% down payment
• $85,980 for 20% down payment

The City of Cranston has two programs to help first-time home buyers. The first offers up to $3,000 toward closing costs. And the down payment assistance program provides “50% of the required down payment, not to exceed $5,000.” But you can’t use both.

Again, there are relatively low household income limits, but there’s little other information. So take the city’s advice and call (401) 780-6240 for more details.

Warwick first-time home buyers

The median list price of homes in Warwick was $426,500 in September 2024. That increased 6.6% year–over–year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

• $12,795 for 3% down payment
• $85,300 for 20% down payment

We couldn’t find any trace of a down payment assistance program on the City of Warwick’s website. But you could call (401) 738-2000 to check that our information is still correct by the time you read this. Otherwise, you can always apply for RIHousing’s help (above).

Where to find home buying help in Rhode Island

All the organizations we’ve listed above should provide advice freely to any first–time home buyer in the state of Rhode Island or within their areas. In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists of statewide, regional, and local resources:

Statewide and regional first-time home buyer programs in RI

• Rhode Island Housing: Homebuyer programs including downpayment and closing cost assistance
• Habitat for Humanity: Through volunteer labor, builds and rehabilitates houses for families in need
• U.S. Department of Agriculture Rural Housing: Homebuyer programs in rural communities

RI first-time home buyer programs by city/town

• Cranston
• Providence
• Woonsocket

What are today’s mortgage rates in Rhode Island?

You can see today’s live mortgage rates in Rhode Island here.

When you’re ready to start the home buying process, be sure to get personalized rate quotes from at least three mortgage lenders. And don’t just look at advertised rates online. Actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: Redfin Rhode Island Housing Market report

²Source: Experian.com study of 2022 and 2021 data

³Based on a review of the state's available DPA grants at the time this was written