A state program that helps first-time buyers get a lower mortgage rate is growing, and that could mean a few more buyers walking through the doors of starter homes Rhode Island builders put up.
General Treasurer James A. Diossa announced the third phase of RI AnchorHome on Oct. 6. BayCoast Bank, Bristol County Savings Bank and Westerly Community Credit Union are joining the program, according to the treasurer's office.
Since it launched in December 2025, RI AnchorHome has helped finance 119 home purchases totaling more than $45 million for first-time buyers. The average loan is about $383,000, and the average purchase price is just over $400,000.
"RI AnchorHome has already helped 119 first-time homebuyers take that important step. With Phase 3, we are building on that momentum, expanding our partnerships and opening the door to homeownership for even more Rhode Islanders," Diossa said.
How it works
The program offers 30-year fixed-rate mortgages starting at 3.99%, subject to market conditions, with no private mortgage insurance. It supports down payment and closing cost assistance and requires homeownership counseling.
The state doesn't make the loans itself. When a qualifying first-time buyer is approved for a mortgage through a participating lender, the state deposits matching funds into an account at that same institution. The treasurer's office says leaning on state deposits rather than issuing loans lets lenders offer more affordable mortgages while keeping lending practices responsible.
"We're committing $21 million to these three financial institutions," Diossa said at the announcement, NBC 10 WJAR reported. The lender issues and manages the mortgage, and borrowers have no obligation to the treasurer's office, the station reported. The program offers up to 100% financing.
To qualify, borrowers must be first-time buyers purchasing a primary residence in Rhode Island, can't own other property, must meet income requirements and must complete counseling, according to WJAR.
The program won unanimous approval from the State Investment Commission before its launch. Navigant Credit Union, Centreville Bank and BankNewport were the first participating lenders, and Washington Trust and Coastal1 Credit Union joined in the second phase.
The announcement included a sobering snapshot from HousingWorks RI. "The median single-family home price increased 5.3 percent to $499,900, while the average rent for a two-bedroom apartment increased 1.8 percent to $2,358," said Brenda Clement, the group's executive director.
Gov. Dan McKee backed the expansion. "Homeownership is more than having a place to live. It's about building stability, creating opportunity, and putting down roots for your family," he said in the release. At the news conference, McKee said, "Right now about 64-65% of people who live in Rhode Island have their own home, and we want to raise that percentage," according to WJAR.
Rep. June Speakman, a Bristol and Warren Democrat, said the program "gives a boost to people who are teetering on the edge of homeownership, putting it within their grasp."
Sen. Jacob Bissaillon, a Providence Democrat who chairs the Senate Committee on Housing and Municipal Government, called homeownership "a cornerstone of the American dream" and said the program "plays a critical role" in putting it "back within reach for all Rhode Islanders."
Bank leaders also weighed in. "Buying your first home is an important milestone," said BayCoast Bank President Marie Pellegrino. Andrew Rogers, president and CEO of Westerly Community Credit Union, said "rising costs have made it increasingly difficult for many families to buy their first home."
Why it matters for Contractors
Builders sell homes to buyers who can get financing, and a fixed rate starting at 3.99% with no PMI makes a real difference in what a first-time buyer can afford. With an average purchase price just over $400,000, the program is reaching buyers well below the $499,900 statewide median single-family price HousingWorks RI cited.
That price range is where starter homes, townhouses and condos compete. Builders and developers working on entry-level product can point buyers to participating lenders, and adding BayCoast, Bristol County Savings and Westerly Community Credit Union brings the lineup to eight lenders.
The program is still small next to the overall market, at 119 purchases since December 2025. But it is one more financing tool for the buyers Rhode Island's housing push is trying to reach, and builders who understand it can help their buyers use it.