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SB 2371

AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND HOUSING AND MORTGAGE FINANCE CORPORATION

2026 Regular Session Introduced by Jonathon Acosta and 6 co-sponsors

Rhode Island creates a First-Time Homebuyers and Veterans Revolving Fund offering up to $40,000 grants toward down payments plus a 1% reduced-rate mortgage, for eligible buyers hig

05/07/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2371

Summary of SB 2371 (Rhode Island) – 2026 Session

Title

AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT — RHODE ISLAND HOUSING AND MORTGAGE FINANCE CORPORATION

Purpose and Core Idea

SB 2371 would create a dedicated revolving fund to assist first-time homebuyers and military veterans in purchasing homes in Rhode Island. The fund is financed by an initial appropriation and ongoing contributions, with RI Housing and Mortgage Finance Corporation (RI Housing) responsible for administration, grant disbursement, and supporting low-interest loan options. The overarching goal is to reduce the upfront down payment barrier and provide favorable financing terms to eligible buyers.

Key Provisions

  • Establishment of the revolving fund

    • Name: First-Time Homebuyers and Veterans Revolving Fund (the revolving fund).
    • Location: Separate fund within the Rhode Island treasury.
    • Initial funding: Authorizes a one-time appropriation of $30,000,000 to establish the fund.
    • Ongoing funding: Fund may receive appropriations as well as donations, gifts, bequests, or other sources.

  • Administration and rules

    • RI Housing will contract with the RI Housing and Mortgage Finance Corporation to administer and disburse funds.
    • RI Housing must develop rules and regulations in coordination with:
    • Office of Veterans Affairs (within the Department of Human Services)
    • Community groups
    • Compliance with general administrative procedures.

  • Grant structure and use of funds

    • Purpose of grants: Assist first-time homebuyers or veterans purchasing a single-family home or condominium in Rhode Island.
    • Grant cap: Up to $40,000 as a dollar-for-dollar match to be used as a down payment.
    • Price cap: Grants are limited to homes not exceeding the median single-family home price in Rhode Island (as determined by the Rhode Island Realtors Association or successor).
    • Eligibility criteria for grant recipients:
    • Minimum credit score of 620.
    • Completion of a homebuyer education course (in person or online via RI Housing).
    • Obtain a RI Housing-funded first mortgage through a participating lender or the RI Housing Loan Center.
    • Occupy the home as the primary residence during the loan repayment period.

  • Additional loan benefits

    • Grant recipients are eligible for a RI Housing or affiliate loan at a reduced interest rate: 1% lower than the rate offered to buyers who are not first-time purchasers or veterans.
    • The reduced rate applies until the loan is refinanced, the property is sold, or the loan is repaid in full.
    • The reduced rate does not apply to RI Housing loans with an interest rate of 4% or lower.

  • Definitions

    • A “veteran” is defined with reference to active-duty service criteria (180+ days service, discharge other than dishonorable). Also includes qualifying reservists/National Guard members per 38 C.F.R. part 74.

  • Effective date

    • The act takes effect July 1, 2026.

Who/What Is Affected

  • Targeted beneficiaries: Rhode Island residents who are first-time homebuyers or veterans seeking to purchase a home.
  • Applicants: Must meet credit, education, and occupancy criteria outlined above.
  • Policy administration: RI Housing and its affiliates, in coordination with state offices (notably Veterans Affairs) and lenders.
  • Housing market impact: The program ties grant eligibility to the median home price and promotes down payment assistance alongside reduced-rate financing.

Timelines and Procedural Details

  • Effective date: July 1, 2026.
  • Initial funding availability: $30 million earmarked to establish the revolving fund.
  • Administrative timeline: RI Housing will implement rules and regulations in partnership with relevant offices and community organizations; ongoing disbursement and management per program guidelines.

Potential Impact

  • Increases access to homeownership for first-time buyers and veterans through down payment support and below-market financing.
  • Creates a standardized framework for grants and loans, potentially stabilizing demand for affordable housing options.
  • Accelerates the use of public funds to reduce immediate down payment barriers while coupling grants with long-term mortgage assistance.

Compiled from official sources — confirm details with the bill’s official record.

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