Rhode Island Neighborhood Stabilization Program (NSP)
In an effort to stabilize communities and offer assistance with redevelopment of abandoned and foreclosed homes, state of Rhode Island received $19.6 million under the Housing and Economic Recovery Act of 2008 (HERA). Of the total allocation of $19.6 million $2.89 million is available for home buyer assistance. This program offers up to 20% of the purchase price to eligible homebuyers acquiring an eligible property in the eligible NSP designated area.
– Eligible buyers may receive up to 20% in down payment assistance in form of a deferred-payment subordinate lien. (The payment is deferred, a portion of the lien is forgiven after 5 years and the remainder forgiven at a rate of 20% per year up to year 10. In case of a sale or transfer of title during the first 5 years the lien, principal and accrued interest is due and payable.)
– Receive 100% financing in form of an 80/20 loan ( the 20% second lien with deferred payment)
– If eligible may also receive the $8000 1st time home buyer credit.
Must purchase and occupy a foreclosed residential property in the NSP target areas(Map available).
*NSP target areas are currently hardest hit by foreclosures and delinquencies, with the highest percentage of subprime financed homes and is identified as likely to experience a significant increase in the number of foreclosures among others.
– 1-4 Family foreclosed/bank owned property located in NSP designated area.
– NOTE: Condominiums do not qualify.
– The property must be acquired at a minimum of 10% below the fair market value.
– NSP eligible properties must meet federal lead conformance requirements.
– 203 K loan can be utilized for rehabilitation for properties in need of more than $5,000 in repairs.
– Borrowers must complete a minimum of 8 hours of homebuyer education conducted by the Housing Network of Rhode Island. If buying 2-4 family home then completion of Landlord Tenant homebuyer education classes required.
First Homes Income Limits
– Household of 1 or 2 person = $87,400
– Household of 3+ person = $102,400
Purchase Price Limits
1 – 4 family = $417,000
(Purchase Limit is increased to $450,000 in a Rhode Island Housing First Homes Targeted Area)
*Eligible households seeking financing through a non Rhode Island Housing Program must have household income at or below 120% of area median income and seek counseling from RI Housing Help Center.