The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | October 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Providence-New Bedford-Fall River, RI-MA MSA | Page 1

Spotlight on the Housing Market 

in the Providence-New BedfordFall River, RI-MA MSA

The Providence-New Bedford-Fall River, RI-MA Metropolitan Statistical Area (Providence) is located in southeastern New England and includes the 

state of Rhode Island and Bristol County in Massachusetts. The foreclosure crisis in the Providence MSA developed somewhat differently than in most 

areas of the nation. Home price appreciation during the housing bubble in Providence peaked six months earlier and rose at a pace that was 28 

percent greater than the national average. However, the decline in home prices during the second half of the bubble was virtually the same as the 

national average. Falling property values and the resulting underwater mortgages were partially fueled by investor speculation and excess housing 

construction in the years leading up to the housing crisis, but were primarily due to unsustainable mortgage lending and rising unemployment during 

the subsequent recession. From 2000 through 2006, the share of distressed mortgages in the Providence MSA--those 90 or more days delinquent 

or in the foreclosure process--were actually lower than comparable shares in the rest of the nation. In 2007, when the rapid rise of distressed 

mortgages in the nation began, the share of distressed mortgages in the Providence MSA soon followed suit. As with the nation, rapid increases in 

local mortgage distress continued in 2009 with the downturn in the economy. Economic and housing market conditions in the Providence MSA are 

improving, but the foreclosure crisis has taken its toll. The Administration’s broad approach to stabilize the housing market has been a real help to 

homeowners in Providence and the surrounding cities. This addendum to the Obama Administration’s Housing Scorecard provides a summary of 

trends and conditions in the local economy and the impact of the Administration’s efforts to stabilize the housing market and help local homeowners. 

Population Growth, Employment, 

and Housing Market:

With 1.6 million people according to the most recent Census, 

the Providence MSA is the 37th largest in the nation. From 

2000 to 2010, the population increased by an average 

of nearly 1,800 people, or 0.1 percent a year. Natural 

population growth (births minus deaths) accounted for the 

entire net population increase. During the last decade, an 

average of nearly 2,400 people per year moved out of the 

Providence MSA. Those leaving the area reached an average 

of 10,350 per year from mid-2004 through mid-2007 when 

economic growth was sluggish. 

Providence MSA Housing Unit Growth Outpaced Population and 

Household Growth During the Past Decade

Date of Census 4/1/2000 4/1/2010

Providence MSA Population 1,582,997 1,600,852 

 Annual Growth Rate - 0.1%

Providence MSA Households 613,835 626,610 

 Annual Growth Rate - 0.2%

Providence MSA Housing Units 656,755 693,923 

 Annual Growth Rate - 0.6%

Source: Census Bureau (2000 and 2010 Decennial)

During the decade spanned by the Census, new housing 

production exceeded household growth in the Providence 

MSA. Net annual housing unit growth of 0.6 percent was 

greater than the corresponding population and household 

growth rates of 0.1 and 0.2 percent, respectively. This excess construction, 

while not as great as in some parts of the nation, nevertheless contributed to an 

oversupply of housing. According to the Census Bureau, the number of vacant units 

increased by an average of more than 2,450 units, or 5.7 percent annually during 

the 2000s compared with a 4.4-percent national increase. The excess supply 

of housing is likely to have contributed to the sharp decline in house prices that 

began in late 2005. Investor speculation, although less substantial than in some 

areas of the nation, was a factor in the overbuilding in the years leading up to the 

housing crisis, as a fairly large share of home purchases in the Providence MSA 

were by non-occupant investors. Specifically, from 2000 to 2005 investor home 

sales rose from 9.8 to 11.3 percent of total sales in the Providence MSA, while 

the corresponding increase for the nation was from 7.7 to 16.0 percent of sales. 

Subprime lending is likely to have contributed more significantly to the overbuilding 

in the Providence MSA. A study by the National Bureau of Economic Research 

shows that in 2005, Providence ranked 16th out of the top 107 metropolitan 

areas with the highest share of subprime mortgage originations relative to housing 

units. A conservative estimate based on HMDA (Home Mortgage Disclosure Act) 

data indicates that subprime originations tripled nationally between 1998 and 

2005. According to a study by the Center for Responsible Lending, approximately 

90 percent of subprime mortgages experience increases in monthly payments of 

30 to 50 percent within a few years, causing subprime loans to typically default at 

more than 7 times the rate of other mortgages.

A modest economic recovery is underway in the Providence MSA. 

The local economy grew slowly before a steep decline that began in 2007. From 

the second quarter of 2003 through the fourth quarter of 2006, nonfarm payrolls 

increased at an average annual rate of 2,875 jobs, or 0.5 percent, compared 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | October 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Providence-New Bedford-Fall River, RI-MA MSA | Page 2

with a national increase of 1.3 percent during the same 

period. The impact of the 2007-2009 Recession was more 

severe for the Providence MSA than for the nation. Jobs in 

the Providence MSA declined at an average annual rate 

of 16,450, or 2.8 percent, from the first quarter of 2007 

through the end of 2009, compared with a national annual 

decline of 1.8 percent during the same period. The recovery 

from the Great Recession has been weaker for the Providence 

MSA than for the nation, with jobs increasing at an average 

annual rate of 4,025, or 0.7 percent, from the first quarter of 

2010 through the second quarter of 2013, compared with a 

national increase of 1.4 percent. 

The Providence MSA is known for its hospitals and institutions 

of higher learning. During the recent recession, a period 

when every other private sector in the MSA lost jobs, the 

education and health services sector expanded at an average 

annual rate of 1,400 jobs, or 1.2 percent, a year. Job losses 

were most severe during this period in the construction and 

manufacturing sectors, which declined at average annual 

rates of 9.8 and 8.0 percent, respectively; declines were also 

substantial in the financial activities sector (4.8 percent). The 

recovery in Providence’s economy has been led by leisure 

and hospitality and professional and business services sectors, 

which have expanded at average annual rates of 3.4 and 

3.3 percent, respectively. The transportation and utilities sector 

(2.0 percent) and the financial activities sector (1.4 percent) 

also contributed to the expansion. Gains in the education and 

health services sector continued, but slowed to an average 

annual rate of 0.2 percent during this period. Growth in 

these sectors more than offset average annual job losses of 

2.2 percent in the construction sector and 0.7 percent in the 

government sector. The unemployment rate for the Providence 

MSA peaked at 12.1 percent in February 2010 and has 

since fallen to 9.3 percent as of August 2013. The national 

unemployment rate peaked in October 2009 at 10.0 percent, 

falling to 7.2 percent by September 2013.

Home sales in the Providence MSA are beginning 

to improve. After reaching a peak of 26,950 units sold 

in 2004,existing home sales dropped by an average annual 

rate of 11 percent between 2006 and 2008 and continued 

to decline, although more slowly, from 2009 through 2011 

at an average annual rate of 3 percent. Existing home sales 

began to rise again in 2012, increasing at an average 

annual rate of 10 percent (albeit on a low base) and reaching 

a pace of 17,300 homes sold during the year. New home 

sales also peaked in 2004 at 1,350 units, before falling 

each year from 2005 through 2011 by an average annual 

rate of 11 percent. New home sales stabilized during 2012, 

increasing by less than 1 percent to 300 homes sold.

Providence MSA home prices rose more steeply than for the 

nation during the housing bubble. The CoreLogic repeat-sales house 

price index (HPI) shows that home prices in the Providence MSA peaked six 

months earlier and rose 28 percentage points higher than for the nation. 

However, the decline in home prices was nearly the same for Providence and 

the nation, with prices falling by 31 percent from their peak in October 2005 to 

their low in February 2009 in Providence, compared with a national peak-to-low 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | October 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Providence-New Bedford-Fall River, RI-MA MSA | Page 3

drop of 30 percent. The rise in home prices in Providence 

during the bubble was likely spurred by investor speculation, 

as home sales to investors averaged 12 percent during the 

upturn - slightly higher than the 11 percent share nationally. 

As described earlier, subprime lending is also likely to have 

spurred demand and fueled home prices. A relatively high 

level of distressed sales (involving bank-owned properties or 

short sales) played a role in the price decline in Providence, 

as distressed sales--at 14 percent of existing home sales 

during this period- -were equivalent to the national rate. 

Home prices in the Providence MSA have since increased 

by 4 percent from their February 2009 low, much less than 

a 19 percent increase for the nation since the end of the 

bubble. Data from the 2011 American Housing Survey, 

which included a survey of the Providence MSA among the 

metro areas surveyed on a rotating basis, indicate the cost 

of owning a home in Providence remains higher than that for 

the nation: median monthly housing costs (including utilities 

and real estate taxes) for owner-occupied units in Providence 

during 2011 were $1,309 compared to $1,008 at the 

national level. 

Although the rental market in the Providence MSA 

continues to be tight, construction activity remains 

low. According to AXIOMetrics, Inc., the Providence 

apartment vacancy rate was 3.5 percent in the third quarter 

of 2013, down from 4.0 percent a year earlier, representing 

tight market conditions. The slight decrease in the vacancy 

rate occurred because, despite increased renter demand, 

additions to the rental market were extremely limited during 

the past year. The national apartment vacancy rate declined 

from 5.5 to 5.2 percent over the same period. During the 

third quarter of 2013, the average apartment rent in the 

Providence MSA increased by 4.7 percent from a year earlier 

to $1,292; the average rent nationwide increased by 3.7 

percent to $1,127 during the same period. 

Trends in Mortgage Delinquencies 

and Foreclosures: 

Providence homeowners continue to struggle with high rates 

of mortgages at risk of foreclosure. According to LPS Applied 

Analytics, as of August 2013, the Providence MSA placed 

58th out of 381 metropolitan areas ranked by share of 

mortgages at risk of foreclosure (90 or more days delinquent 

or in the foreclosure process). LPS data show that mortgages 

at risk of foreclosure decreased by 34 percent during the 

last year in Providence from 11,350 in August 2012 to 

7,550 in August 2013, compared with a national decline of 

40 percent during the same period. A lengthy foreclosure 

processing timeline does not explain the high share of 

distressed mortgages in Providence. As of the second quarter 

of 2013, the average time period to complete a foreclosure in Rhode Island was 

259 days compared to a national average of 526 days. CoreLogic data indicate 

that from 2000 through 2006, the rate of mortgages at risk of foreclosure in 

the Providence MSA were consistently below the national rate. By 2007 and 

2008, when the foreclosure crisis began for most of the nation, and single-family 

foreclosures were largely driven by unaffordable loan products, the increase in 

mortgages at risk of foreclosure in Providence paralleled the national trend. The 

share of mortgages in distress rose from 1.5 percent in Providence and 1.6 percent 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | October 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Providence-New Bedford-Fall River, RI-MA MSA | Page 4

in the nation in the beginning of 2007, to 4.4 percent for 

both by the end of 2008. Beginning in 2009, foreclosures 

were increasingly driven by loss of income, unemployment, 

and strategic defaults as the economy worsened, according 

to research by the Federal Reserve Bank of Chicago. A sharp 

spike upward in the rate of distressed mortgages occurred 

in 2009 for both Providence and the nation. By early 2010, 

mortgages at risk of foreclosure reached a peak of 8.0 percent 

nationally, and have since fallen to 4.9 percent. The share of 

distressed mortgages in the Providence MSA reached a peak 

of 7.9 percent in early 2010 but has fallen more slowly to 6.1 

percent as of August 2013. 

Realty Trac data indicate that the foreclosure completion rate 

in the Providence MSA has been lower than the national rate. 

As of August 2013, the number of foreclosure completions 

as a percent of all housing units in the Providence MSA since 

April 1, 2009 is 2.0 percent compared with a national rate 

of 2.7 percent. Foreclosure completions have been trending 

downward nationally as well as in Providence. During the 

third quarter of 2013, completed foreclosures in Providence 

were down 13 percent from a year earlier, while completed 

foreclosures in the nation declined 24 percent during the 

same period. During the third quarter of 2013, the rate 

of foreclosure completions as a percent of housing units 

in Providence was 0.07 percent, slightly lower than the 

0.09-percent national rate.

The efforts of numerous state and local entities and financial 

institutions in partnership with the federal government have 

helped contain the rate of foreclosures. A lengthy judicial 

process has also contributed to the national decline in 

foreclosure activity. Recent legislation in Rhode Island has 

had an impact on foreclosure activity as well as the share of 

distressed mortgages in the state. In mid-2011, a U.S. District 

Judge ordered a halt to all foreclosures in Rhode Island until 

serious attempts at mediation were made. This may be part 

of the reason why the foreclosure rate in Providence is lower 

than the nation, while the share of distressed mortgages is 

higher. In September 2013, however, the judge dissolved 

the injunction in response to an Appeals Court order and 

825 pending foreclosures in Rhode Island will be impacted, 

which may lead foreclosure activity in Providence to 

temporarily increase. CoreLogic reports that 17.3 percent of mortgages in the 

Providence MSA were underwater as of the second quarter of 2013, down from 

21.5 percent a year earlier, but higher than the 14.5 percent national rate- -still 

representing additional homeowners potentially at risk. 

The Administration’s Efforts to Stabilize the 

Providence MSA Housing Market: 

The Administration’s mortgage and neighborhood assistance programs--the Home 

Affordable Modification Program (HAMP), the Federal Housing Administration 

(FHA) mortgage assistance programs, the Neighborhood Stabilization Program 

(NSP), and the Hardest Hit Fund (HHF) program–combined with assistance from 

the HOPE Now Alliance of mortgage servicers and the National Mortgage 

Servicing Settlement have helped stabilize the Providence MSA housing market.

From the launch of the Administration’s assistance programs in April 2009 

through the end of August 2013, nearly 26,800 homeowners received mortgage 

assistance in the Providence metropolitan area. More than 15,600 interventions 

were completed through the HAMP and FHA loss mitigation and early 

delinquency intervention programs. An estimated additional 11,200 proprietary 

mortgage modifications have been made through HOPE Now Alliance servicers. 

While some homeowners may have received help from more than one program, 

the number of times assistance has been provided in the Providence MSA is 

nearly twice the number of foreclosures completed during this period (13,700). 

Under the landmark National Mortgage Servicing Settlement, more than 2,000 

Rhode Island homeowners had benefitted from over $150 million in refinancing, 

short sales and completed or trial loan modifications, including principal reduction 

on first and second lien mortgages provided as of June 30, 2013. Nationwide, 

the settlement has provided more than $50 billion in consumer relief benefits to 

more than 640,000 families. That is in addition to the $2.5 billion in payments 

to participating states and $1.5 billion in direct payments to borrowers who were 

foreclosed upon between 2008 and 2011.

Foreclosure Completion Rates in the Providence MSA

Area

Third Quarter 2013 Since April 1, 2009

Foreclosure 

Completions

Foreclosure 

Rate

Foreclosure

Completions

Foreclosure 

Rate

Providence MSA 500 0.07% 13,850 2.0%

Nation 119,500 0.09% 3,546,500 2.7%

Note: Foreclosure Rates as Percent of All Housing Units; 

 Data through September 2013 for foreclosures since April 2009

Source: Realty Trac and Census Bureau

Given over three rounds, the Neighborhood Stabilization Program

has invested $7 billion nationwide to help localities work with non-profits and 

community development corporations to turn tens of thousands of abandoned and 

foreclosed homes that lower property values into homeownership opportunities 

and the affordable rental housing that communities need. 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | October 2013 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on the Housing Market in the Providence-New Bedford-Fall River, RI-MA MSA | Page 5

NSP1 funds were granted to all states and selected local 

governments on a formula basis under Division B, Title III of 

the Housing and Economic Recovery Act (HERA) of 2008; 

NSP2 funds authorized under the American Recovery and 

Reinvestment Act (the Recovery Act) of 2009 provided grants 

to states, local governments, nonprofits and a consortium of 

nonprofit entities on a competitive basis; and NSP3 funds 

authorized under the Dodd–Frank Wall Street Reform and 

Consumer Protection Act of 2010 provided neighborhood 

stabilization grants to all states and select governments on a 

formula basis.

In addition to stabilizing neighborhoods and providing 

affordable housing, NSP funds have helped save jobs. Each 

home purchased, rehabilitated and sold through the NSP 

program is the result of the efforts of 35 to 50 local employees. 

Overall, a total of $25 million has been awarded to the State 

of Rhode Island and the City of Providence through NSP1 and 

NSP3. Including program income earned, over $28 million 

will be expended in the Providence MSA. Approximately 

365 households in the Providence MSA have already 

benefited from NSP, and activities funded by the program are 

expected to provide assistance to an additional 95 owneroccupied and renter households. Examples of how these funds 

have been put to use are provided below. 

State of Rhode Island

• The State of Rhode Island received $19.6 million 

in NSP1 funds and $5 million in NSP3 funds. Including 

program income, the State has expended more than 

$26 million since 2008 to development activity within 

the Providence MSA. To date, the Rhode Island 

Neighborhood Stabilization Program has played a pivotal 

role in finding new homes for more than 300 families 

and revitalizing neighborhoods across the state. The State 

has also been very successful at targeting low-income 

households who are earning 50 percent of area median 

income or less. One of NSP’s requirements is that grantees 

use at least 25 percent of their grant funds for the purchase and redevelopment 

of abandoned or foreclosed homes to house individuals or families whose 

incomes do not exceed 50 percent of area median income. The State’s 25 

percent requirement was $4.9 million, but the State has committed over $9.5 

million for this set-aside requirement, far surpassing its original goal. 

The State awarded its NSP dollars to several community development 

corporations or non-profits working throughout its targeted neighborhoods 

in the Providence MSA. One such organization, SWAP Inc., a non-profit 

committed to providing affordable housing opportunities, has acquired and 

rehabilitated a vacant two family home into a four-bedroom unit that will be 

sold to an eligible family. Neighborworks Blackstone River Valley (NBRV), a 

community development corporation, is rehabilitating a multi-family foreclosed 

building into a nine unit rental property for families earning up to 50 percent 

of the area median income level. A third community developer, OMNI 

Development Corporation, is rehabilitating several foreclosed, vacant, and 

abandoned properties in the West End neighborhood of Providence into 

affordable rental housing. 

City of Providence

• The City of Providence received more than $2 million in NSP1 funds 

from the State of Rhode Island and an additional $1.3 million as a 

direct recipient of NSP3 funds. In developing its NSP strategy, the City 

coordinated with its Green & Healthy Housing Initiative to achieve 

environmental sustainability goals. The City encouraged all applicants 

for funding to incorporate “green and healthy” design and construction 

principles in their proposals. The funds were used for demolition of severely 

deteriorating and abandoned homes and the construction of new homes for 

homeownership and rental, as well as extensive rehabilitation of foreclosed 

properties. To date, the City has been able to assist over 25 families to find 

decent, affordable housing with its NSP funding. 

One example of the use of state-awarded NSP funds was the acquisition of an 

architecturally significant building by Community Works Rhode Island (CWRI) 

that was left neglected and vacant for nearly three decades. The home, 

referred to as the “Wedding Cake House,” is located in the Broadway Local 

Historic District as well as the Broadway-Armory National Register District. 

The property was listed on the Providence Preservation Society’s (PPS) Most 

Endangered Properties list in 2010 and was recently foreclosed upon. CWRI 

is working to rehabilitate the building to create five energy-efficient, affordable 

condos--2 one-bedroom, 2 two-bedroom, and 1 three-bedroom unit(s). CWRI is 

leveraging both NSP and HUD HOME dollars to renovate the property. HOME 

is a HUD grant program to States and localities that communities often use in 

partnership with local non-profit groups to fund affordable housing activities or 

provide direct rental assistance to low-income people. 

The Administration allocated $79.3 million from its Hardest Hit Fund to 

the state of Rhode Island. Rhode Island Housing oversees the Hardest Hit 

Fund Rhode Island (HHFRI), which was launched in December 2010. On 

January 31, 2013, HHFRI became the first Hardest Hit Fund program in the 

country to stop taking applications because they reached full commitment of 

their allocated funds. As of June 30, 2013, the most recent quarter for which 

data are available, HHFRI had assisted 2,968 Rhode Island homeowners 

with $44.7 million, or 66% of their total program allocation. HHFRI helped 

homeowners at high risk of default or foreclosure through several programs: 

Loan Modification Assistance, Temporary and Immediate Homeowner 

Assistance, Moving Forward Assistance, Mortgage Payment Assistance – 

Unemployment, and Principal Reduction. For additional information, see 

http://www.hhfri.org/.

Providence MSA NSP Activity (Housing Units) Projected Completed

Rhode Island Federal Program

NSP3 Total 34 2

Construction of new housing 5 0

Rehabilitation/reconstruction of residential structures 29 2

Rhode Island State Program

NSP1 Total 360 363

Clearance and demolition 2 2

Construction of new housing 6 6

Homeownership assistance to low-and moderate income 178 136

Rehabilitation/reconstruction of residential structures 174 219

NSP3 Total 66 0

 Construction of new housing 11 0

Rehabilitation/reconstruction of residential structures 55 0