NEWPORT, R.I. — Newport, R.I., is working with Rhode Island's housing agency and a private developer on a project of 30 one-family houses for first-time homebuyers of low to moderate income.
Ground will be broken next month on the three-and-a-half-acre Beacon Street project, which should be completed within a year, said Bruce Bartlett, the city's director of Planning, Zoning and Development.
While housing prices have fallen because of the recession, most still are too high for the majority of first-time buyers, he said.
In 1990, the median price of a one-family house in Newport was $140,250, according to the Rhode Island Housing and Mortgage Finance Corp., the state's housing agency. The average in 1990 was $183,118.
"I don't think you can find anything below $120,000," Mr. Bartlett said.
The 1990 census found a median income for a family of four here to be $34,490, he said, adding that the disparity between income and housing prices made Newport one of the least affordable of the state's 39 municipalities.
The Beacon Street houses, which will have at least two bedrooms, will sell for about $80,000, Mr. Bartlett said. Buyers must meet income guidelines set by the housing agency -- no more than $40,600 for a household of two and $46,690 for a household of three or more.
Half the units will be reserved for those who must meet income guidelines set by the Federal Department of Housing and Urban Development, which are lower than the state's, Mr. Bartlett said.
HUD's limits are $27,500 for a household of two and $30,450 for a household of three.
In 1989, the state housing agency gave the city a $527,000 land bank loan to buy the vacant site, which straddles Newport and neighboring Middletown.
The interest rate is 3 percent, Mr. Bartlett said.
The New England Affordable Housing Corp., a local development firm, has agreed to buy the lots from the city and the city will use the proceeds of the sales to pay back the loan, he said.
The housing corporation will build and sell the houses, keeping the profits from the sales, Mr. Bartlett said.
Created by the Rhode Island General Assembly in 1973 with a mandate to create safe, decent housing for low- and moderate-income families, the Rhode Island Housing and Mortgage Finance Corporation is a quasi-state agency that finances housing development through the sale of bonds and low-income tax credits.