Official State of Rhode Island website

State of Rhode Island Executive Office of Housing

38% Pilot Program

These guidelines will apply to any home developed under the Rhode Island Low and Moderate-Income Housing Act (LMIH Act) if the developer seeks to set a sales price above 30% of the area median income for a household at 120% Area Median
Income. The initial sale of any home being sold above the standard 30% limits must follow these guidelines to be considered affordable housing under the LMIH Act – and it must contain a deed restriction that requires these guidelines to be met upon  resale for a period of no less than 30 years from initial occupancy.

Pilot Program Overview (Click here for complete Guidelines)

  • Pilot Timeframe: Homes first sold from January 1, 2026 to December 31, 2029.  
  • No state or federal subsidy: Local density bonuses and municipal and local subsidies are allowable.
  • Maximum sales price: The maximum sales price is calculated using maximum front end debt equal to 38% (instead of 30%) of gross AMI.
  • Differential from Market rate units in the development: Affordable units must be priced at no more than 80% of the lowest-priced market-rate unit of the same bedroom size.
  • Underwriting criteria for the purchase: Buyers must have household income between 100%-120% of AMI, housing debt ratio of no more than 38%, total debt-to-income of no more than 43% (as verified by a mortgage lender), and must occupy the property as their primary residence.   
  • Monitoring: Agent must be retained to oversee compliance with these guidelines.  

Public Law 2025 Chapter 325 authorizes the Secretary of Housing “to develop a four-year (4) pilot program sunsetting on December 31, 2029, to explore alternative underwriting criteria to aid in the development of affordable dwelling units for sale to moderate-income households.” The law states that “[a]lternative underwriting criteria shall be limited to no more than thirty eight percent (38%) of gross household income” and defines moderate income households as those between 100% and 120% of the Area Median Income, adjusted by metropolitan statistical area and household size. Any property first sold under these criteria will have the same criteria incorporated into the deed as a deed restriction for any resale, in accordance with the Low- and Moderate-Income Housing (LMIH) Act.