Questions by Homebuyers
How do I know that I am ready to buy a home?
If you are thinking about buying a home for the first time
but are not sure you are ready, CHFA encourages you to learn
as much as you can about what is involved in buying and
owning a home before you begin.
CHFA’s website has many
resources to assist you. Use the
calculator to discover whether you are financially prepared
to buy a home. Contact and meet with a CHFA-approved
Participating Lender to assess whether you pre-qualify for a
mortgage. Read the
First-time Homebuyers Guide to learn
about the process generally followed in finding and
purchasing a home. Review CHFA’s
homebuyer programs to
learn if you meet CHFA mortgage eligibility requirements.
After assessing your financial readiness to embark on
homeownership, you may discover that renting is the better
option for you at this time. This is also an opportunity to
learn the steps you may need to take to prepare yourself for
the responsibility of homeownership in the future.
Does CHFA require
me to attend homebuyer classes before I get a loan?
some CHFA mortgage programs require borrowers to attend
either a three-hour or an eight-hour homebuyer course before
they close on their mortgage. (See,
Programs.) The eight-hour course, however, is also open to
anyone interested in learning more about homeownership and
includes individual credit repair and debt management
counseling as well. CHFA offers these courses each month at
various locations throughout the state at no cost to
Homebuyer Education schedule of classes.)
eligible for a CHFA loan?
Generally, CHFA endeavors to
assist new homebuyers in purchasing their first home.
However, prior homeowners may qualify for a CHFA home loan
if they haven’t had an ownership interest in a home for at
last three years or if they propose to move to a home
located in a
targeted area of the state.
Many CHFA loan
programs limit eligibility by household income and home
sales prices. An eligible borrower’s before-tax household
income can not exceed CHFA’s established
income limits and
the sales price of the home can not exceed CHFA’s
CHFA does not finance the purchase of
commercial property. The home you buy must be your
year-round, primary residence. A CHFA-approved
can advise you whether you qualify for a CHFA loan.
How do I apply for a CHFA loan?
Contact a CHFA-approved
Participating Lender. The lender will assess whether you
meet the requirements for a CHFA mortgage program and will
guide you through the application process.
property is eligible for a CHFA loan?
eligible for CHFA financing can be a single family
residence, a two to four family residence or a unit in an
approved condominium complex or planned unit development.
In the case of a two-to-four-family residence, at least one
of the units must be owner-occupied and the building must
have been used as a residence for at least five years.
A newly constructed two-family
home located in a
targeted area may also be eligible for
CHFA financing. CHFA city, town or statewide
limits will also apply to homes eligible for CHFA
Can I get help with my down payment and closing
If you qualify for a CHFA first mortgage and lack
sufficient funds to cover the down payment or closing costs,
you may apply for a second mortgage of at least $3000 or up
to 25% of the purchase price of your home under the
Downpayment Assistance Program.
What’s the most I can
earn to qualify for a CHFA mortgage?
Many CHFA mortgage
programs use statewide, city and town
income limits that establish ceilings on the total
household income of an eligible CHFA loan applicant.
However, there are no income limits if you are buying a home
Homebuyer Programs for
How is “household income” calculated?
“household income” by counting all sources of before-tax
income from the mortgagor(s) only.
The following may be
counted as sources of income for the purposes of calculating
“household income”; regular earnings; overtime; part-time
earnings; unemployment compensation; bonuses; dividend and
interest income; child support; commissions income; military
allowances; welfare payments; disability payments; pension;
annuity; retirement; and social security benefits; and
income for services in the military reserve or National
Is there a
sales price limit on a home I can purchase with a CHFA
Many CHFA mortgage programs use city or town
sales price limits that establish ceilings on the purchase
price of a home eligible for CHFA financing.
Homebuyer Programs for more details.)
CHFA mortgage programs only for first-time homebuyers?
While CHFA mortgage programs are intended primarily to
benefit first-time homebuyers, previous homeowners that meet
the other eligibility guidelines may apply for a CHFA home
loan as long as they have not had an ownership interest in a
principal residence for the past three years. Previous
homebuyers who intend to purchase a home in a federally
targeted area of the state may also be eligible for a CHFA
Does CHFA inspect the home I purchase?
does not inspect the home. However, most prudent homebuyers
arrange and pay for an independent inspection of the home
they intend to purchase in order to ensure its structural
and functional integrity and that their interests are
protected in the contract. (See,
First-Time Homebuyer Guide
for more information on home inspections.)
does not require a home inspection, a property eligible for
a CHFA loan must be appraised, and if needed, repaired to
comply with relevant building codes. The lender will order
the appraisal and any subsequent repairs that may be
required must be completed before the closing of the loan,
except in the case where an escrow has been established to
pay for the repairs.
What’s the difference
between an appraisal and an inspection?
An appraisal is
intended to assess the value of a home based on the value of
comparable homes in the neighborhood to establish the value
of the collateral that will secure the mortgage loan if
approved. All lenders and mortgage insurers require an appraisal to
confirm that the home and the value of the home meet their
While an appraisal usually involves a visual
inspection of the home, a home inspection involves a more
detailed and specific assessment of the condition of all
elements of a home, from structural elements to plumbing,
heating and air conditioning. A home inspection is intended
to ensure that a homebuyer is thoroughly informed as to the
condition of the home prior to purchase. (See,
Homebuyers Guide for more information on home inspections.)
Do all CHFA loans have to be insured?
Yes, under most CHFA loan programs mortgage
insurance is required. The
mortgage must be insured either through the
Federal Housing Administration (FHA), the
Veterans Administration (VA), or
USDA Rural Development (RD).
When utilizing the HFA Preferred™
Loan Program, private mortgage insurance is allowed.
No mortgage insurance is required when a borrower makes a
down payment of at least 20%.
can discuss mortgage insurance requirements.)
is the minimum down payment required for a CHFA loan?
minimum down payment of an
FHA-insured mortgage is 3.5% of
the purchase price of the home. No down payment is required
RD guaranteed mortgage.
The minimum downpayment for the HFA Preferred™
Loan is 3% of the purchase price.
Can I buy a condominium with a CHFA mortgage?
Condominium units are considered eligible dwellings for
the purpose of most CHFA mortgage programs. However, a
condominium complex must first be approved on
FHA's Approved Condominium list, or Fannie Mae approved
if coming in through HFA Preferred Loan Program or an
uninsured loan with 20% down.
What is the Recapture Tax
and how does it work?
In rare circumstances, CHFA mortgage
loans may be subject to the Federal
at the time the property is sold. The tax might apply
if a borrower sells his or her home within nine years of the
purchase date, makes a profit on the sale and has an income
that exceeds federal recapture tax limits at the time of the
sale. If borrowers are required to pay recapture
tax, CHFA will reimburse the homeowner for the tax paid.
Are co-signers allowed if I
can’t qualify for a CHFA loan on my own?
No, co-signers are
not allowed. CHFA loans are only available to borrowers who
purchase a home they will live in year-round as their
Is there a minimum credit score to
qualify for a CHFA home loan?
No. CHFA does not have a
minimum credit score. Applications that require mortgage
insurance will be subject to the qualifying guidelines of
the insurer which may include a minimum credit score. A loan
applicant should discuss this with a CHFA-approved
Participating Lender who can provide additional information
regarding any credit score requirement for the loan
What are CHFA credit guidelines for
qualifying for a loan?
CHFA lenders follow the guidelines of
the mortgage insurer of the loan to determine whether a loan
applicant is credit-worthy. A lender will follow
guidelines when a borrower has 20% or more towards a down
payment and mortgage insurance is not required.
applications are reviewed on a case-by-case basis. An
applicant that has filed for bankruptcy in the past may
still qualify for a CHFA loan so long as two years have
elapsed since his or her debts were discharged.
CHFA employment guidelines for qualifying for a loan?
lenders follow the guidelines of the mortgage insurer of the
loan with regard to the employment history of a loan
applicant. Generally, an eligible borrower will have at
least two years of continuous full-time employment in the
same job or occupation. However, lenders review CHFA loan
applications on a case-by-case basis and consider many
factors when assessing a prospective borrower’s