Rhode Island's 3.99% Mortgage Program

Anyone thinking about buying their first home in Rhode Island needs to know about a state program offering 3.99% fixed mortgage rates when the market average is sitting at 6.22%.

Yes, that's right. 3.99%.

This isn't some adjustable-rate gimmick or a teaser that jumps after two years. This is a legitimate 30-year fixed mortgage at a rate not seen since 2022. And it could save qualifying buyers over $550 per month compared to a standard loan—nearly $200,000 over the life of the mortgage.

The program is called AnchorHome, it launched in early December 2025, and it has $60 million in funding. That sounds like a lot, but when you do the math, it's only enough for about 100-200 mortgages. In a state where tens of thousands of people are priced out of homeownership, that money could be gone in months.

Here's what this program actually is, who qualifies, and what buyers and sellers need to know before the funding runs out.

What Makes This Program So Valuable?

The numbers tell the real story of AnchorHome's value proposition.

For someone buying a $400,000 home (which is below Rhode Island's median home price of around $505,000), here's what the monthly payment looks like:

• At 6.22% (current market rate): $2,461/month
• At 3.99% (AnchorHome rate): $1,909/month

That's a difference of $552 every single month. Over 30 years, that's nearly $200,000 in interest payment savings.

And here's the additional benefit: no private mortgage insurance (PMI) required. Most buyers who put down less than 20% get hit with PMI—usually costing $2,000-$4,000 per year on a $400,000 loan. AnchorHome eliminates that entirely.

So qualifying buyers aren't just getting a better rate. They're getting a structurally better loan that costs less every month for three decades.

*Principal and interest only. Excludes taxes, insurance, and HOA fees. No PMI required with AnchorHome (saves additional $2,000-$4,000/year).

Who Actually Qualifies for This?

AnchorHome isn't available to everyone. It's specifically designed for first-time homebuyers who meet certain income and credit requirements. Here are the qualifications:

The Must-Haves:

• First-time buyer status – Cannot currently own a home
• Income under $95,009 – That's 110% of Rhode Island's median household income
• Credit score of 660 or higher – This is higher than FHA's 580 minimum
• Debt-to-income ratio under 50% – Total monthly debts can't exceed half of gross income
• Purchasing in Rhode Island – Property must be owner-occupied primary residence
• Complete homebuyer education – Required counseling course

The Loan Details:

• Maximum loan amount: $525,000 for a single-family home
• Maximum loan amount: $575,000 for a two-family home
• Financing available for up to 100% of the purchase price with down payment assistance
• Property must be a 1-2 family home for owner occupation

Where to Apply:

Only three lenders are participating:

1. Navigant Credit Union (Rhode Island's largest credit union)
2. Centreville Bank
3. BankNewport

Applicants must work directly with one of these lenders—AnchorHome isn't available through other banks or mortgage brokers.

The Reality Check: This Money Won't Last

Here's the challenging part: $60 million sounds like a lot, but it's not.

If the average loan is around $400,000-$450,000, that funding covers somewhere between 100-200 mortgages total. In a state where over 140,000 households are cost-burdened (meaning they're paying more than 30% of their income on housing), and where no municipality is affordable for the median household, demand will be intense.

Rhode Island ran a similar down payment assistance program in 2024 using federal ARPA funds. It ran out in less than two months.

AnchorHome is even more valuable than that program because it reduces monthly payments permanently, not just upfront costs. Anyone thinking "there's time to look into this next month" or "spring is a better time to start shopping" might find themselves too late.

What Buyers Need to Do Right Now

For anyone who might qualify, here's the recommended action plan:

Step 1: Check Credit Score Immediately

The 660 minimum is required. Anyone below that threshold needs to work on improving their score before applying. This means paying down credit card balances, disputing any errors on credit reports, and avoiding opening new accounts.

Step 2: Contact One of the Three Lenders

Don't wait until finding a house. Contact Navigant Credit Union, Centreville Bank, or BankNewport this week and start the pre-approval process. Getting pre-approved doesn't create commitment, but it locks in eligibility while funds remain available.

Step 3: Complete Homebuyer Education

This required course takes time. Waiting until being under contract means it could hold up closing. Complete it now to avoid delays.

Step 4: Gather Required Documents

Applicants will need:

• Two years of tax returns and W-2s
• 30 days of pay stubs
• 2-3 months of bank statements
• Government ID and Social Security card
• Current loan and credit card statements

Having everything ready significantly speeds up the process.

Step 5: Start House Shopping Strategically

The loan maximum is $525,000 for a single-family home. Realistically, staying under $500,000 leaves room in the budget for closing costs, moving expenses, and emergency repairs.

Areas like Warwick, Cranston, Pawtucket, and parts of Providence offer the best chances of finding homes in the qualifying price range.

What This Means for Sellers

For sellers with homes priced under $525,000, AnchorHome is actually excellent news.

Here's why:

First, it dramatically expands the qualified buyer pool. People who couldn't afford a home at 6.22% can suddenly afford it at 3.99%. That $552/month difference might be what gets them pre-approved.

Second, AnchorHome buyers tend to be more motivated and serious than casual shoppers. They've completed homebuyer education, jumped through the hoops for program approval, and are ready to close.

Third, in a market with extremely tight inventory (about 2 months of supply), having more qualified buyers competing creates favorable conditions for sellers.

Important considerations:

• Timeline expectations: AnchorHome closings typically take 45-60 days, not 30. These buyers need time for education requirements and additional documentation.
• Contingencies are standard: First-time buyers using this program will need financing and inspection contingencies. These are normal protections, not red flags.
• Strategic pricing: Properties at $525,000 or just below are in the sweet spot for AnchorHome buyers. Overpricing could eliminate this buyer pool.
• Marketing advantage: Mentioning "AnchorHome eligible" in listings signals to buyers and agents that below-market financing is available.

How This Stacks Up Against Other Options

A common question: "Are there other programs like this?"

Short answer: Not really. At least not with rates this competitive.

RIHousing Programs offer down payment assistance ($15,000-$25,000), but at market interest rates. That helps upfront but doesn't reduce monthly payments for 30 years.

Massachusetts's ONE Mortgage is probably the closest comparison, offering below-market rates with no PMI. But even their best rates are around 5.75-6.25%—still 1.75-2.25 percentage points higher than AnchorHome.

Connecticut and other New England states offer various assistance programs, but none approach 3.99%.

The only alternative that comes close is if a seller agrees to a rate buydown—where they pay points upfront to temporarily lower the rate. But even that typically only lasts 1-3 years before adjusting back up.

The Bigger Picture: Why Rhode Island Housing Is So Expensive

Understanding why this program exists provides important context.

Rhode Island's housing market has experienced dramatic appreciation over the past decade. Home prices have increased 149% since 2014—from a median of $194,900 to over $512,000 today. That's the fastest appreciation in the entire country.

Meanwhile, the median household income in Rhode Island is only $86,372. To afford the median home at current market rates with 20% down requires earning around $130,000-$158,000 per year.

The math simply doesn't work for most households.

Additionally, Rhode Island only has about 2 months of housing inventory (a balanced market has 5-6 months). First-time buyers compete against cash investors, repeat buyers with substantial equity from previous sales, and out-of-state buyers fleeing even more expensive markets like Boston.

AnchorHome doesn't solve the underlying problem—Rhode Island needs more housing supply—but it does give first-time buyers a legitimate chance to enter the market.

Common Questions and Concerns

"What if rates drop below 3.99% in the future?"

Refinancing is always an option if rates drop significantly. However, given that the Fed is only projecting one more rate cut in 2026, and mortgage rates aren't expected to fall below 5.5% anytime soon, 3.99% will likely remain highly competitive for years.

"Can AnchorHome be combined with other down payment assistance programs?"

Possibly. Applicants need to check with their lender about combining programs. RIHousing's down payment assistance programs may be compatible, but there are rules about stacking government assistance.

"What if the perfect house costs $550,000?"

For single-family homes, the maximum through AnchorHome is $525,000. Buyers would need to cover the difference or look for different properties. For two-family homes (like duplexes where owners occupy one unit and rent the other), the limit is $575,000.

"Is Navigant Credit Union membership required?"

Yes, if using Navigant. But membership is easy to establish. Alternatively, applicants can work with Centreville Bank or BankNewport without membership requirements.

"What happens if funding runs out mid-purchase?"

If someone is already pre-approved and under contract when funding depletes, their loan should be protected—it's already in process. But anyone who hasn't started the application yet risks missing out entirely. This is why acting quickly matters.

Bottom Line

Rhode Island's AnchorHome program is legitimately one of the best first-time buyer opportunities seen in years. A 3.99% rate in a 6.22% market, with no PMI, and up to 100% financing is extraordinary.

But it won't last.

Anyone who qualifies—or thinks they might qualify—needs to act this week. Not next month. Not in the spring. Now.

Contact Navigant Credit Union, Centreville Bank, or BankNewport. Get pre-approved. Complete homebuyer education. Start looking at homes.

In six months, hesitating today could be a costly missed opportunity.

Questions about whether this program makes sense for a specific situation? Whether as a first-time buyer trying to determine qualification, or a seller wondering how to position a home for AnchorHome buyers, Spectrum REC can help. The team can walk through the numbers and help determine the smartest strategy.

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