- The deed restrictions last for 30 years
- The units are being sold for $169,900 to $294,742
- All the buildings are three-story townhouses
EAST PROVIDENCE − Want to own a brand-new condo with central air on Taunton Avenue in East Providence, surrounded by shops and cafes?
And what if that condo was just $169,900, almost unheard of in the post-pandemic market?
That is the reality with 13 new three-story townhouses now being finished in a complex that goes down Ivy Street.
The income-restricted units range in price, up to $294,742, with a litany of requirements for would-be buyers, and the list of people who have already applied is long − 227 people.
The Ivy Place condos are being built by NeighborWorks Blackstone River Valley, a nonprofit housing developer. They should be complete by the fall.
The biggest catch is that all the units are income-restricted, ranging in maximum area median income (AMI) from 60% to 100%. More on that below.
Resource Development and Communications Director Meghan Rego said she expects about half of the current list of 227 people to make it through the income verification process and make it to the actual lottery.
Applications are open until June 16, so that number could still rise.
The property once held a movie theater, Real Estate Development Co-Director Bill Lewis said, before it was torn down and left an empty lot.
Interested?Here is the direct link to apply to the lottery
How much will the units be sold for?
The sale price of the units depends on both the type and the income bracket of the buyer
In all, there will be six separate lotteries:
- a single accessible unit at 80% of area median income ($232,900)
- four 3-bedroom units at 60% of area median income ($169,900)
- three 3-bedroom units at 80% of area median income ($232,900)
- one 3-bedroom unit at 100% of area median income ($294,742)
- two 2-bedroom "live/work" units at 80% of area median income ($207,900)
- two 2-bedroom "live/work" units at 100% of area median income ($263,900)
What do the units look like?
The 13 units are spread across three buildings, two on Ivy Street and one on Taunton Avenue, with all three buildings sharing a rear parking lot.
The other two buildings, with exteriors alternating red, yellow, green, blue and grey, have four townhouses each, with garages on the first floor. All of those units have three bedrooms.
East Providence Mayor Roberto DaSilva said the city has been supportive of the development, which benefited from an overlay district that reduced the amount of parking required, allowing the project to add more units.
"This is the concept we should be adopting on all commercial corridors," he said. "We want people living there to make the downtown, the commercial areas, vibrant with people, alive. They took a vacant lot, an eyesore, and are now turning it into a commercial space, housing people who are just starting out.
His hope is that other developers will see East Providence is welcome to new development in its commercial corridors and consider transforming the empty lots and vacant buildings into new uses, DaSilva said.
What are live/work units?
There are four units in the dark green Taunton Avenue building.
All of them are "live/work" units, with the first floor zoned as a dedicated commercial space fronting on Taunton Avenue. On the third floor are the two bedrooms and a combined kitchen and living room space is on the second floor.
The Taunton Avenue building is plumbed differently than the other two buildings, with a commercial sprinkler system.
One accessible unit in complex
One of the 13 units in the complex is considered accessible and compliant with the Americans with Disabilities Act, and accessible for someone with mobility problems or using a wheelchair. While the townhouses are all three stories, the one accessible unit has an elevator.
The accessible unit is one of four regular units being sold to people at or below 80% of the area median income, going for $232,900.
The elevator cost an estimated $60,000. Were the accessible unit being sold on the market, Lewis estimated it would sell for $450,000 to $500,000.
What are the requirements to buy?
To be entered into the lottery and be allowed to buy one of the units, prospective buyers need to:
- Apply by June 16
- Be a "first-time homebuyer" (defined as not owning a home in the last three years)
- Be able to get financing for the project
- Meet the income eligibility requirements
- Attend a one-hour introduction session
- Complete a one-on-one with a homebuyer coach
- Take an eight-hour homebuyer education course
While the application is "easy," it does require some documents, including a few pay stubs, a tax return from last year and, for anyone with a side hustle, evidence of income from those jobs, Rego said.
Some things that can disqualify buyers are high debt-to-income ratios and low credit scores, below 580 to 620, Lewis said.
The equation for adebt ratio is simple:Add all your monthly debts and divide by gross monthly income. Most lenders won't extend a loan if a debt-to-income ratio is above 45%.
Do you meet the income requirements?
The income limitations depend on family size and recently increased after the Department of Housing and Urban Development put out new income tables for Fiscal Year 2024. The below table shows the maximum income.
| % of AMI | 1 person | 2 people | 3 people | 4 people |
| 60% | $47,220 | $54,000 | $60,720 | $67,440 |
| 80% | $62,950 | $71,950 | $80,950 | $89,900 |
| 100% | $78,680 | $89,920 | $101,160 | $112,400 |
How much would a mortgage cost?
Mortgages are currently at 7% interest, below the 20-year high in October 2023 of 7.79%, and well above the sub-3% seen in 2020.
Here's how much each monthly mortgage payment would be, assuming no down payment and not including taxes, utilities, the homeowner association fee or private mortgage insurance:
- $169,900: $1,130 a month
- $207,900: $1,383 a month
- $232,900: $1,549 a month
- $263,900: $1,756 a month
- $294,742: $1,960 a month
The amount of the condo fee will be set by the owners when they first meet, and NeighborWorks will provide seed money for a capital reserve.
A place to call home, not an investment
One key difference between the deed-restricted condos and their market rate counterparts is that, for 30 years, the condos can't be rented and if sold, they can be sold only to someone below the income restriction that the owner originally bought it at.
RI Housing has a calculator using a complex formula to calculate how much a unit can be sold for, based on the current interest rates and the area median income at the time of sale, which increases over time.
While the price will go up over time, it will not follow the same 60%-100% rapid increase in price that the rest of the housing market has seen since the onset of the pandemic.
Rego said people should think of it as putting money into a savings account: It will grow a little each year.
The counterpart in that metaphor is buying a house on the open market, where the money put into the house is a lot more like putting money into a brokerage account and investing in the stock market: It could see wild increases or precipitous crashes.
How was the project funded?
While the project had been in the works with NeighborWorks since 2018, when the pandemic hit, costs increased. While that was expected, it wasn't expected to go as high as it did, tacking on $1.5 million in additional cost. The total project price is $6.3 million, Lewis said.
The proceeds from the sale of the units will also help NeighborWorks Blackstone River Valley break even, funding about 50% of the project.
The recent increase in the income limits for Fiscal Year 2024 increased the price of the units slightly, a formula calculated by RI Housing. The total increase in price was $100,000 across all the units, and just enough for the nonprofit developer to break even, Rego said. Under the Fiscal Year 2023 area median income limitations, they would still be in the red.
Some of the funding for the project came from the East Providence Waterfront Commission, which controls money paid by developers in exchange for not putting any income-restricted units into projects, like the Kettle Point project, which paid $1 million to avoid putting income restrictions on 23 of its units.
The Waterfront Commission paid $743,000 toward the project. State and other local funds were also used to pay for the project.
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Reach reporter Wheeler Cowperthwaite atwcowperthwaite@providencejournal.comor follow him on Twitter@WheelerReporter
