Program had been offering low-interest loans to small businesses
Wheeler Cowperthwaite
- The program is with Centerville Bank, BankNewport and Navigant Credit Union
- The state gets a minimum return of 2.5% on its deposits
- Buyers won’t have to pay private mortgage insurance, or PMI
PROVIDENCE – The Rhode Island Office of the General Treasurer is starting a new pilot program to back low-interest mortgages, initially 3.99% at local banks for a small number of people with income low enough, and credit scores high enough, to qualify.
The program, dubbed RI AnchorHome, offers two major financial benefits to buyers: an interest rate lower than what is being offered by the market and no requirement to pay for private mortgage insurance, or PMI, estimated to be savings of $118 a month.
The treasurers’ office will offer three financial institutions participating, Centreville Bank, BankNewport and Navigant Credit Union, the reserves to back the mortgages. In all, the pilot program will commit $60 million.
The program is available to people making up to 110% of the area median income. RIHousing offers a table of income limits based on household median income, at 100% of the area median income and 115%, but not 110%. Official documentation for the program points to RIHousing’s area median income table, which has 115%, but not 110%.
At 115%, just slightly above the program limit, the limits are:
- $91,120 for a single person
- $105,220 for two people
- $118,330 for three people
- $131,450 for four people
- $142,030 for five people
The program is part of the larger Community Deposit Program run by the treasurer’s office. The program provides deposits of state money to “support” qualifying loans at banks and credit unions participating in the program. That program normally provides deposits for loans under $250,000 to small businesses.
How to apply
Someone who is qualified needs to be approved for a mortgage through one of the three financial institutions participating. The institutions have more information on how to apply.
How many mortgages will qualify
The $60 million pledged by the treasurer’s office will allow for 80 to 90 loans, General Treasurer James Diossa said following a press conference on the program.