Urban Rehabilitation Homeownership
Program
Program Overview
The Urban Rehabilitation Homeownership Program
(UR Home) supports homeownership and
investment in Connecticut
neighborhoods that have fallen into
disrepair by offering home purchase
loans at below-market interest
rates, along side home improvement
loans at no interest, to eligible
borrowers.
Qualified applicants under this
program must plan to purchase,
repair and live in homes in
Bridgeport, Hartford, New Haven, New
London, Waterbury or in
specific
sections of Windham. Prospective
borrowers may apply directly for a
UR Home loan with a CHFA-approved
UR
Home lender.
Follow the links below for more information regarding the
Urban Rehabilitation Urban
Rehabilitation Homeownership Program.
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Urban Rehabilitation Homeownership
Program Interest Rates
Currently, the Urban
Rehabilitation Homeownership Program is providing mortgages at the
following rate:
- Interest rate: 3.000%** (APR range 3.1 - 3.5%)
- Fees: Up to One-and-a-Half Points (1.5% 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.
In addition, the program provides a 0 % interest rate
home improvement loan, forgivable in 20% increments over
five years
Who can
apply for an Urban Rehabilitation
Homeownership Program
loan?
Eligible borrowers under the UR
Home Program must be willing to
purchase and occupy a home that
needs repair in one of the following
cities where they work full time:
In addition, borrowers must be one of the following types
of employees to qualify for a UR Home loan:
- State employees with local offices in one of the
cities identified above.
- Municipal employees of one
of the cities identified above, so long as the city agrees
to waive the home improvement taxes on the purchased home
for five years.
- Employees of private companies who work in one of
the above cities.
Please note: UR Home Rehabilitation loans are not
restricted to first-time homebuyers and are not subject to
the
income limits normally imposed on CHFA borrowers
unless the borrower is requesting downpayment assistance.
However, prior home owners must sell any previously-owned
homes before closing on a UR Home loan.
What
types of property can you purchase
with an Urban Rehabilitation
Homeownership Program
loan?
The UR Home Loan Program requires
that applicants purchase homes in
need of repair that also 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 be either:
- A single-family home or
- A multi-family home
with no more than four units
Finally, eligible property under a UR Home loan must be located in Bridgeport, Hartford, New Haven, New London, Waterbury or specific
sections of Windham.
- 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
types of repairs are covered by a UR
Home loan?
In general, repairs that correct
structural damage, repairs that
eliminate safety and health hazards
and repairs that promote disabled
accessibility and energy efficiency
are eligible for a UR Home loan.
All improvements must comply with
Connecticut and local codes and
ordinances. (For a more detailed
list of allowable improvements, see
UR Home Allowable Improvements Fact
Sheet.)
What else should you know about
an Urban Rehabilitation Homeownership
Program loan?
The following additional considerations
and restrictions apply to Urban
Rehabilitation Homeownership Program loans.
- Rehabilitation loans
are capped.
Home improvement loans under the
UR Program may not exceed
$20,000 for repairs to a single
family home or $25,000 for
repairs to multi-family homes.
Because of a limited funding
source, these loans are made on
a first-come, first-serve
basis. Any money not used for
repairs must be returned to
CHFA.
- Repairs must be
completed within six months.
Home repairs must be completed
within six months of the date of
closing on the loan. Extensions
of this deadline may be granted
by CHFA on a case by case basis.
- Repair work must
performed by a licensed
contractor.
Borrowers may not do the repair
work on the eligible
property. They are required to
hire a Connecticut licensed
contractor, other than
themselves, to perform the
repair work.
- Eligible homes must
be inspected.
Borrowers must pay for an
inspection of the home they
intend to purchase and repair.
The inspection must be performed
by a Connecticut licensed home
inspector. The cost of a home
inspection ranges from $300 to
$750 and may be covered by a
Downpayment Assistance Program
loan.
- UR Home borrowers
must work with CHFA counseling
agency.
Before applying for a UR Home
mortgage, applicants must attend
a free homebuyer counseling
session. Additionally,
borrowers must work with the
counseling service during the
bid and repair process of their
purchased homes. (See,
Homebuyer
Education schedule of classes.)
- UR Loan borrowers
may qualify for additional down
payment assistance.
For those who lack sufficient
funds to cover the upfront
expenses of buying a home that
needs repair, qualified
borrowers may apply for a
supplementary loan through the
Downpayment Assistance Program
(DAP). DAP loans are secured by
a second mortgage on the home
and can be used to pay home
inspection and closing costs, as
well as the down payment.
Please note:
Qualified DAP borrowers must
meet CHFA
income limits.
- Mortgage insurance
may be required.
A UR Home loan may be insured
either through the
Federal Housing Administration (FHA), the
Veterans Administration, if
the borrower is a veteran, the
USDA Rural Development or
through private mortgage
insurance (PMI). Participating lenders can
provide more detailed
information on the mortgage
insurance options under this
program.
- 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 may be required
to pay a federal tax on the
rehabilitation loan.
The UR Home rehabilitation loan
may be subject to the IRS
“forgiveness of debt”
regulation. UR Home lenders can
provide more detailed
information on the possible tax
implications of this loan.
How do you apply for a
Urban Rehabilitation Homeownership
Program loan?
Prospective homebuyers may apply
for a UR Home Program loan directly
from one of the following
CHFA-approved UR Home lenders:
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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Documents related to the Pilot Urban
Rehabilitation Urban Rehabilitation
Homeownership Program
The following documents are
related to the Pilot Urban
Rehabilitation Urban Rehabilitation
Homeownership Program. To open
and view the document, click on the
document title.
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