Rhode Island’s real estate landscape, with rising home prices and limited availability, is pushing the dream of homeownership out of reach for many residents.
In response, the RI AnchorHome program was launched to help first-time homebuyers bridge this gap. With the recent expansion of funding and the support of local financial institutions, the program offers a chance at generational wealth.
In March, General Treasurer James A. Diossa announced a $50 million expansion of the program, following approval from the State Investment Commission. Launched as a pilot project in December, it deposits money from the state treasury into local banks and credit unions.
The program uses funds that would otherwise be held in accessible, low-risk investments, such as money market funds or short-term U.S. Treasury bills. Instead, the state places those funds on deposit locally while retaining ownership of the money.
With the more deposits – the lifeblood of banks – participating financial institutions agree to offer lower-than-market mortgage interest rates to qualified first-time homebuyers at a time of rising real estate prices and borrowing costs.
“It’s about purchasing a home and creating stability and opportunities for families,” Diossa said.
By targeting first-time homebuyers, the program aims to empower individuals and families to achieve their dreams of homeownership while fostering long-term financial security, state officials said.
One of the features of the RI AnchorHome program is its eligibility criteria. Unlike traditional state and federal housing assistance programs, which can be bogged down by a complex process, the RI AnchorHome initiative allows applicants to work directly with participating banks and credit unions.
The program launched with Navigant Credit Union, Coastal1 Credit Union and The Washington Trust Co. as pilot partners, according to Diossa’s office. Others have signed on, including Centreville Bank and BankNewport.
“For many Rhode Islanders, accessible homeownership is life-changing, providing a path to creating intergenerational wealth and a foundation for long-term stability,” said Rolando Lora, executive vice president and chief lending officer at Washington Trust. “We are proud to support RI AnchorHome and invest capital locally so that more first-time homebuyers can enter the housing market and build lasting security here in the Ocean State.”
Lindsey Ricci, a real estate agent with eXp Realty LLC in Providence, praised the program for its flexibility, noting that it accommodates two-family homes and eliminates private mortgage insurance requirements. The program is tailored to meet the needs of first-time homebuyers who may require that extra push to enter the housing market.
“Many just need that little extra push, and unlike dealing with any government bureaucracy, you are just dealing with a traditional lending institution or bank,” she said. “When we see buyers have a difficult time, you feel so bad. And these programs help them.”
Since its inception, approximately $24 million has already been utilized to close more than 60 mortgages for first-time homebuyers. Diossa said success stories such as Cheyanne McLachlan, a 28-year-old nurse who purchased her first home in Warwick, show the program’s value.
The first in her family to graduate high school, the first to get a college degree, and now the first in her family to own a home, McLachlan said RI AnchorHome has given her “the opportunity to create generational wealth for me and my future family and accomplish a dream I didn’t think possible.”
By providing matching funds to local financial institutions, the state enables them to offer reduced interest rates that can start as low as 3.99% on fixed-rate 30-year mortgages.
To ensure that the program effectively targets those in need, there are specific income restrictions in place, limiting eligibility to individuals earning no more than 110% of the statewide median income.
Furthermore, there are established loan limits to maintain affordability, with a maximum purchase price of $525,000 for single-family homes and $575,000 for two-family residences.
Despite the successes of the program, challenges remain in the Rhode Island housing market. The Real Estate Institute of Rhode Island Inc. reported a decline in single-family home sales. Market analyst Candace Mandell sees “a dangerous contradiction.”
“We have more to choose from, yet fewer people can afford to make a choice,” Mandell said.
With the median sales price for existing homes reaching $529,000, many prospective buyers continue to struggle to find suitable options within their budget. Diossa is committed to expanding RI AnchorHome’s reach with future funding rounds.
“We have so many examples of people that we’ve helped,” he said. “These are real people with real jobs who really want to put down roots in Rhode Island.”
Ricci agrees.
“They are pushing this, as they should be. This is very straightforward,” she said. “The criteria of eligibility is relatively low. We will never see rates below 4% again.”
