Rhode Island Housing and Mortgage Finance Corporation announced today (April 22) that it is increasing purchase price limits in its loan program to its highest point ever. The limit for existing single-family homes and condos is going up 21.6 percent to $183,000 for most of Rhode Island.
Chris Barnett, a spokesman for Rhode Island Housing, said the organization raised the maximum purchase prices because home sales have been setting records.
"We’re playing catch-up with a real estate market where double-digit price appreciation has become the norm," he said. "We’ve got to keep up with that if our buyers are going to get the prices they deserve."
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In other communities such as Newport County, Block Island and Washington County, the maximum purchase price limits have been raised even higher, to $220,000 across the board, a 10.8 percent increase.
Most of Liset Peña’s customers are low-income first-time homebuyers. A sales agent with DeWolfe Companies in North Providence, Peña said raising the maximum price for loans will drive more customers to her.
"It’s very exciting to have all these guidelines changing," she said. "It’s long overdue.
"People are poor at a different level now," she said. "Just because you make $36,000 a year doesn’t mean you necessarily have enough money for a house. Now this gives people a little bit to look forward to. The most important thing is the interest rates, especially now where houses are so overpriced."
Interest rates offered by Rhode Island Housing depend on household income. The lower your income, the lower your interest rate, said Barnett.
"Households that earn no more than $28,000 get a 4.45 percent rate," he said. "Even if you earn $62,000 your rate is just 5.95 percent. That will save you about $60 a month compared to today’s conventional loans, which are around 7 percent."
To qualify for a loan from Rhode Island Housing, for one or two people, the household income must be below $54,500. For a household with three or more people the maximum income must be below $62,600.
"If we find something nice and cheap in Lincoln, we can provide a better lifestyle for our kids," said Perez.
John Perez and his wife Sandra are just two of the people who could benefit from this change. One of the Pawtucket couple’s three children is starting school next September. According to John, the family has been desperately looking for a house in a nicer community.
"It’s a big difference because now we can see more homes available on the market," he said. "We want to buy something in Lincoln because that’s the only place we would want to send our kids to public school."
