Five Questions With: Joseph Baptista

Joseph Baptista, president of Anchor Financial Mortgage Inc. in Pawtucket, recently launched a new mortgage program aimed at first-time homebuyers and people working in public service occupations. The program, called the Anchor Advantage Program, involves a 2 percent grant toward a down payment. 

Baptista founded the mortgage brokerage in 2000, which is licensed in all New England states except Vermont, as well as New York and Florida. Prior to that, he worked for mortgage brokerages in Lincoln and Cranston. He spoke to the Providence Business News about the program.

PBN: The program involves a 2 percent “completely forgivable grant.” What does that involve?

BAPTISTA: You have to have 3.5 percent into the transaction as a minimum investment. It is [a Federal Housing Administration] loan. And it can be either a 203B, a traditional FHA loan with 3.5 percent down, or it can be a 203K, which is the rehab loan. It’s through a government-sponsored entity, a national lender we’ve partnered with. The total requirement for the down payment is 3.5 percent but 2 percent comes in the form of this grant. So, they’re only actually having to put down 1.5 percent.

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PBN: And when does the buyer get the proceeds?

BAPTISTA: Right at the closing. And what’s really unique about this; Rhode Island Housing has a grant program that is forgivable – but it’s forgivable over five years. When we run the loan for approval, we have to run the file as 2 percent of the funds as being “gift” funds and the other 1.5 percent is the buyer’s funds. And the 1.5 percent can be gifted to you, as long as it’s from a relative.

PBN: Your program can issue loans to people with credit scores as low as 580. The national average is above 700. Why would you want to go as low as 580? Isn’t this inviting trouble?

BAPTISTA: They’re not doing that 580 credit score for everybody. They’re going to want to see a verified rental history, where with a 620 credit score, we’re not going to need to see that. With the 580, there is definitely more underwriting that goes into it. Someone is physically looking at this file. There is definitely more rigorous underwriting for this. Trust me, we don’t want to make loans for people who aren’t going to be able to pay.

PBN: Who is eligible for this?

BAPTISTA: It’s for any first-time homebuyer. It’s for anyone who is under 140 percent of the area median income. You can own a home today, but if you fall in that under 140 percent of median, you can use this program. For Rhode Island … that’s $85,000. For a client that needs this kind of down-payment assistance, they’re going to be in that range. The next would be any of the medical responders, government employees. It’s a government-sponsored program.

PBN: What has been the response since you started this in May?

BAPTISTA: We’ve got at least 11 going right now. Every state I’m licensed in, we can do this.

Mary MacDonald is a staff writer for the PBN. Contact her at