S 2371Veterans & Military

State Affairs and Government - Rhode Island Housing and Mortgage Finance Corporation

Creates a $30 million fund providing up to $40,000 in down payment matching grants for veterans and first-time homebuyers.

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Introduced Jan 30, 2026Committee Senate Finance

Plain-English Summary

This legislation establishes the "First-Time Homebuyers and Veterans Revolving Fund" within the state treasury, backed by an initial $30 million appropriation. The fund is designed to assist first-time homebuyers and military veterans in purchasing single-family homes or condominiums in Rhode Island. Qualified applicants can receive a dollar-for-dollar matching grant of up to $40,000 for a down payment. Additionally, eligible buyers may qualify for a mortgage interest rate that is 1% lower than standard rates offered by RI Housing. Applicants must meet specific criteria, including a minimum credit score of 620 and completion of a homebuyer education course.

For younger readers

This bill sets up a special piggy bank with a lot of money to help two groups of people buy a house: people buying their very first home and soldiers who have served in the military (veterans). If these people save up their own money to buy a house, the government will give them extra money to help pay for it, up to $40,000. It also lets them borrow the rest of the money they need at a lower cost than usual. They have to promise to live in the house to get this help.

Who & Where It Applies

Impacted groups

First-time homebuyersVeteransRI HousingReal estate agentsMortgage lenders

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

$19.26

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Directly addresses wealth inequality by providing significant capital to low-and-middle-income first-time buyers who often struggle to save for down payments despite having steady income.
Provides targeted, tangible support to veterans, ensuring that those who served the country have a pathway to stable housing and community integration upon returning to civilian life.
Reduces long-term housing costs for working families through subsidized interest rates, preventing predatory lending and allowing families to build generational equity.
The minimum credit score requirement of 620 and the need for personal savings to receive the "match" may exclude the working poor and those with the most critical housing needs.
Subsidizing demand via down payment grants without a corresponding plan to increase housing supply could inadvertently drive up home prices, ultimately benefiting existing property owners more than buyers.
Allocates $30 million to individual private asset accumulation rather than investing in communal social housing or rental assistance for the homeless and most vulnerable populations.

For Conservatives

Promotes the traditional value of homeownership, which is linked to greater community stability, civic engagement, and personal financial responsibility.
Structure of the program requires "skin in the game" by only offering matching funds to those who have saved their own money, rewarding saving rather than just giving a handout.
Fulfills a patriotic duty to support military veterans, acknowledging their sacrifice by helping them establish roots in the communities they defended.
Increases government spending by appropriating $30 million of taxpayer funds for a specific subset of the population, expanding the size of the state budget.
Interferes with the free market by subsidizing specific buyers and manipulating interest rates, which distorts natural price discovery in the real estate market.
Places the state government in direct competition with private lenders and banks by offering subsidized mortgage products that private industry cannot match.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 46 additions

SECTION 1. Chapter 42-55 of the General Laws entitled "Rhode Island Housing and Mortgage Finance Corporation" is hereby amended by adding thereto the following section: 42-55-31. Revolving fund to assist first-time homebuyers and veterans.

(a) There is hereby created, as a separate fund within the treasury, the first-time homebuyers and veterans revolving fund (the "revolving fund"). The purpose of this revolving fund is to provide assistance to first-time homebuyers and veterans who are buying a home, through a revolving fund. The revolving fund shall assist these homebuyers in acquiring sufficient funds for an initial down payment on a home in Rhode Island, by providing grants. The revolving fund shall consist of any sums that the state may from time to time appropriate, as well as money received from donations, gifts, bequests, or otherwise from any public or private source, which money is intended to assist with promoting home purchases for first-time homebuyers and veterans. The general assembly shall authorize an appropriation of thirty million dollars ($30,000,000) to provide initial funding to establish this revolving fund.

(b) The treasurer shall contract with the Rhode Island housing and mortgage finance corporation (hereinafter sometimes referred to as "RI housing") for the administration and disbursement of funds. The Rhode Island housing and mortgage finance corporation shall adopt rules and regulations in conjunction with the office of veterans affairs within the department of human services as well as with appropriate community groups consistent with the purposes of this section and chapter 35 of title 42 ("administrative procedures"), which provide for the orderly and equitable disbursement and repayment of funds.

(1) To make grants to a first-time homebuyer or a veteran purchasing a single-family home or condominium in Rhode Island;

(2) Not to exceed the maximum price on a home purchase for which a grant may be issued from the revolving fund established by the median single-family house price on the market in Rhode Island as determined by the Rhode Island realtors association or any successor organization;

(3) To be eligible for a grant from the revolving fund, a prospective purchaser shall:

(i) Have a minimum credit score of at least six hundred twenty (620);

(ii) As part of the application process, complete a homebuyer education course, available in person or online through RI housing;

(iii) Obtain a RI housing-funded first-mortgage through a participating lender or the RI housing loan center; and

(iv) Occupy the home as their primary residence during the period of the loan repayment.

(d) The revolving fund shall provide a dollar-for-dollar match to be used as a down- payment up to forty thousand dollars ($40,000).

(e) In addition, applicants who qualify for a grant from the revolving fund shall also be eligible for a loan from RI housing or its affiliates at a special rate of interest which rate is one percent (1%) less than any other loan RI housing is offering to buyers who are not first-time home purchasers or veterans. This reduced rate shall remain on the loan until the loan is refinanced, the real property is resold, or the loan is repaid in full. This reduced interest rate shall not apply to a loan issued or authorized by RI housing or its affiliates which has an interest rate of four percent (4%) or less.

(f) As used herein, the term "veteran" means a person who served on active duty with the U.S. Army, Air Force, Navy, Marine Corps, or Coast Guard, for a minimum of one hundred eighty

(180) days and who was discharged or released under conditions other than dishonorable. Reservists or members of the National Guard called to federal active duty (for other than training) or disabled from a disease or injury incurred or aggravated in the line of duty or while in training status also qualify as a veteran pursuant to 38 C.F.R. part 74.

SECTION 2. This act shall take effect on July 1, 2026.