Homebuyer Preparation Guide
This guide is intended to help prospective buyers prepare for future homeownership opportunities through the Block Island Housing Board condominium development. The first phase is anticipated to include 8 condominium units, with additional units to follow. Current plans call for two bedroom, one bathroom homes. While pricing has not been finalized, the anticipated purchase price is currently estimated to be between $250,000 and $275,000 per unit.
1. Understand Your Credit
Review your credit report and credit score. Mortgage lenders use your credit history to determine eligibility and loan terms. Pay bills on time, reduce credit card balances, avoid opening unnecessary new credit accounts, and correct any errors on your credit report.
2. Reduce Debt
Lower debt can improve your ability to qualify for a mortgage. Pay down credit cards, avoid taking on large new loans, and keep monthly obligations manageable.
3. Build Savings
Buyers should begin saving now for down payment funds, closing costs, moving expenses, and emergency reserves after purchase.
4. Gather Financial Documents
Most lenders will request two years of tax returns, W-2 forms and/or 1099s, recent pay stubs, bank statements, and information regarding assets and liabilities.
5. Speak With a Mortgage Professional
A lender can help determine estimated purchasing power, monthly payment expectations, mortgage program eligibility, and documentation requirements.
6. Rhode Island Housing Programs
Rhode Island Housing (RIHousing) offers programs that may assist eligible buyers, including First Time Homebuyer mortgage programs, down payment assistance, closing cost assistance, homebuyer education programs, and fixed rate mortgage options.
7. Gift Funds
Some mortgage programs allow gifted funds from family members to be used toward a down payment or closing costs. Requirements vary by lender and program.
8. Estimated Monthly Housing Costs
Your monthly housing expense may include mortgage principal and interest, property taxes, homeowners insurance, and condominium fees. Actual costs will vary depending on financing terms and future project expenses.
9. Important Information
The Housing Board anticipates using a lottery process for qualified applicants. Expressing interest does not guarantee eligibility, financing approval, selection, or the ability to purchase a unit. Final pricing, income limits, eligibility requirements, and application procedures will be announced as the project progresses.
Helpful Resources
Block Island Housing Board www.blockislandhousingboard.org
Rhode Island Housing www.rihousing.com