2026 -- S 2371

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LC003308

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND HOUSING

AND MORTGAGE FINANCE CORPORATION

     Introduced By: Senators Paolino, Ciccone, Gu, Acosta, Mack, Vargas, and Ujifusa

     Date Introduced: January 30, 2026

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     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.

     (c) Funds placed in the revolving fund shall be made available as follows:

     (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.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND HOUSING

AND MORTGAGE FINANCE CORPORATION

***

     This act would establish a revolving fund to assist first-time homebuyers and veterans to

purchase a home in Rhode Island by issuing grants of up to forty thousand dollars ($40,000). The

revolving fund would be administered by the Rhode Island housing and mortgage finance

corporation. This act would also authorize the Rhode Island housing and mortgage finance

corporation to issue low interest loans to applicants who qualify for the grants. The act would also

provide for an initial appropriation of thirty million dollars ($30,000,000) to establish the revolving

fund.

     This act would take effect on July 1, 2026.

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