Homeownership
Program
Program Overview
The Homeownership Program offers
mortgages at below-market interest
rates to tenants of publicly
assisted housing who wish to
transition from renting to
homeownership. Though the program
primarily is designed to support
first-time homebuyers, renters who
were homeowners may still be
eligible for a loan under this
program if the property they intend
to buy is located in a federally
targeted area that would benefit
from increased home ownership.
CHFA is committed to helping Connecticut residents achieve their dream of homeownership and values its partnership with the qualified lenders for this program.
Prospective borrowers may apply
directly for a Homeownership Program
loan at their local CHFA-approved participating bank or mortgage company. (See, list
of
Participating Lenders near you.)
Follow the links below for more information regarding the
Homebuyer Mortgage Program.
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Homeownership
Program Interest Rates
Currently, the Homeownership Program is providing mortgages at the
following rate:
- Interest rate: 2.625%** (APR range 2.725 - 3.125%)
- Fees: Up to One Point (1% Origination Fee) * Payable to Lender
- Term: 30 years, fixed rate
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** Please note, this rate is subject
to change and additional fees may apply.
Who can
apply for a Homeownership Program
loan?
First-time homebuyers that meet
minimum credit, income, and
employment standards who are tenants
of public housing or receive public
housing assistance may qualify for a
Homeownership Program loan.
Tenants who currently receive rental assistance through
the Section 8, Rental Assistance Program, the Department of
Developmental Services or the State Moderate Rental Program
also are eligible to apply for a Homeownership Program loan.
In addition, tenants of the following property types are
eligible to apply under this program:
- residences managed by a
CHFA or municipal housing
authority
- CHFA-financed
rental properties
- HUD-subsidized
housing supported by HUD
programs 221(d)(3), 241(f) or
236
Previous homeowners who otherwise meet the eligibility
requirements for this loan may also qualify for this program
if they intend to purchase a home in one of 18 areas in
Connecticut targeted for revitalization (See
Targeted
Areas).
- Who are considered first-time homebuyers?
First-time homebuyers are those who have never purchased
a home before or have not had an ownership interest in a
principal residence for the past three years.
- What are the income guidelines to qualify for this loan?
An applicant’s annual, before-tax household income must
not exceed $89,200 for households of one or two persons or
$102,580 for households of three or more. Household income
is calculated by combining the income of all resident adults, 18 or older, who are not full time students.
The CHFA income limits do not apply
for homes purchased in
targeted areas, unless the applicant
also borrows a loan under the
Downpayment Assistance
Program.
What
types of property can you purchase
with a Homeownership Program
loan?
The Homeownership Program
requires that loan applicants
purchase homes that meet specific
property and sales price
guidelines.
- Property Guidelines:
In order to qualify for this program, the applicant must use the loan
to purchase a home in which he
or she will reside year-round.
The applicant may not use the
loan to purchase recreational,
vacation, investment, commercial
or rental properties. No part of
the purchased property may be
designed for commercial
purposes.
In addition, the property
must meet one of the definitions
listed below:
- Existing and new
single-family homes,
townhouses and Planned Unit
Developments
- Newly constructed homes
that meet FHA’s energy
efficiency standards (Ask
your Participating Lender
for more information.)
- Condominiums listed on
the
FHA-approved Condominium
List
- Two- to four-family
homes that have been used as
residences for the past five
years or newly constructed,
two-family homes in a
Targeted Area
- Mobile homes that meet
FHA
guidelines.
- Sales Price Guidelines:
In order to qualify for this
program, the purchase price of a
home must not exceed the CHFA
sales price limit established
for the specific city or town in
the state where the property is
located. (See, the
CHFA sales price limits.)
What else should you know about
a Homeownership Program loan?
The following additional considerations
and restrictions apply to Homeownership
Program loans.
- You may qualify for
help with your down payment and
closing costs.
For those who lack sufficient
funds to cover the upfront
expenses associated with
purchasing a home, CHFA offers
assistance to qualified
borrowers through the
Downpayment Assistance Program
(DAP).
Borrowers under the
Homeownership Program may
qualify for a reduced interest
rate on a DAP loan.
Please note: A
down payment of at least 3.5 %
of the purchase price of the
home is typically required by
the mortgage insurer.
- Mortgage insurance
may be required.
Federal mortgage insurance is
required under most CHFA loan
programs. The borrower must be
insured either through the
Federal Housing Administration (FHA), the
Veterans Administration, or
the
USDA Rural Development.
However, private mortgage
insurance is permitted when a
borrower makes a 15% down
payment on a home in a
targeted area and the
mortgage exceeds FHA loan limits
but is within the CHFA sales
price limits of that area. In
addition, there are targeted
CHFA mortgage programs that are
eligible for PMI insurance.
(Your Participating Lender can
provide more detailed
information on these programs.)
Please note:
No mortgage insurance is
required when a borrower makes a
down payment of at least 20% of
the total purchase price on a
newly constructed home in a
targeted area.
- You may be required
to pay a special federal tax if
you sell your home within nine
years.
Under rare circumstances, CHFA
mortgage loans may be subject to
the
Federal Recapture Tax 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.
- You will need to
complete a homebuyer education
class.
Prospective borrowers under the
Homeownership Program are
required to attend a free
three-hour, homebuyer education
class prior to closing the loan.
Classes are held at several
locations in the state each
month. (See,
homebuyer education class
schedule.)
How do you apply for a
Homeownership Program loan?
To apply for a Homebuyer Mortgage
Program loan, a prospective borrower should contact one of
CHFA’s Participating Lenders for guidance through the loan
application process.
Generally, the time from applying for
the loan to closing the sale of the property is six to 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 Homeownership
Program. To open and view the
document, click on the document
title.
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