Downpayment Assistance Program
Program Overview
The Downpayment Assistance
Program (DAP) offers supplementary loans
at below-market interest rates to
eligible borrowers of home loans who
are unable to raise sufficient funds
to pay the upfront expenses
associated with purchasing a home.
Please note: A DAP loan is not
intended to finance the purchase of a home. Because
CHFA recognizes that the foremost obstacle to homeownership is a
potential homebuyer’s inability to cover the down payment
and closing costs of a home purchase, DAP loans can be used
in conjunction with CHFA home loans.
An eligible borrower must show his or her ability to
repay the primary mortgage and the DAP loan in order to
qualify for assistance under this program.
Follow the links below for more information regarding the Downpayment Assistance Program.
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Downpayment Assistance Program Interest Rates
In most cases, the DAP interest
rate will match the interest rate of
the borrower’s first mortgage (up to
6 %.) However some borrowers under
the
Homeownership Program, the
Home of Your Own Loan Program,
the
Police Homeownership Mortgage
Program and the
Section 8 Housing Choice Voucher
Homeownership Program may be
eligible for a lower interest rate.
Who can
apply for a Downpayment Assistance
Program
loan?
Any borrower who
qualifies for a CHFA first mortgage can also apply for a DAP
loan of at least $3000. Generally, borrowers must
demonstrate that they have sufficient income to pay both
loans but lack sufficient savings to afford a down
payment and/or the closing costs on the home. In addition,
the applicant must be able to afford the $200 application
fee for the program and must also attend a free 3-hour
homebuyer education class before closing on the loan. (See,
homebuyer education for class schedules.)
How much Downpayment Assistance
can you receive?
The minimum DAP loan amount is $3000 and the maximum is
25 % of the purchase price of the home.
What else should you know about
a DAP loan?
- Loan amounts may vary.
While the minimum DAP loan amount is $3,000, the actual
down payment required might exceed this sum depending
upon the purchase price of the home. Typically, at
least 3.5 % of the total purchase price of a home is
required for a down payment. (This is determined by the
mortgage insurer.)
- Loan eligibility may depend on household
savings.
DAP applicants are required to use assets or household
savings above $5000 towards a down payment. This
requirement does not apply to borrowers under the Police
Homeownership Program and the Teachers Mortgage
Assistance Program.
- An application fee is required.
There is a $200 application fee for a DAP loan.
- You will need to complete a homebuyer
education class.
Under this program, a borrower must attend a free
three-hour homebuyer education class before closing
on the loan. Classes are held at several
locations in the state each month. (See,
homebuyer education class schedules.)
- Other down payment assistance may be
available from your town or city.
Some towns and cities provide down payment assistance in
the form of low interest loans or grants to eligible
residents. Prospective homebuyers should inquire with
their local Department of Economic and Community
Development to investigate
whether this assistance is available.
How do
you apply for a Downpayment Assistance
Program
loan?
To be eligible for a DAP loan,
borrowers must apply and qualify for a
CHFA first mortgage. To apply for a Downpayment
Assistance Program loan, prospective
borrowers should contact one of
CHFA’s
Participating Lenders for
guidance through the loan
application process. Generally, the
entire loan
process takes between six and eight
weeks.
Questions? Contact CHFA.
Prospective borrowers should
first contact their lender for
information on this loan program.
For additional assistance, borrowers
may contact CHFA’s single family
underwriting department.
Mailing Address:
CHFA
Attn: Single Family Underwriting
999 West Street
Rocky Hill, CT 06067-4005
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Additional Information
The following documents are related
to the Downpayment Assistance
Program. To open and view the
document, click on the document
title.
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