Frequently Asked Questions

Section 1 - For Prospective Borrowers

Q. How do I qualify for a CHFA loan?
A. If your household income is within the income limits and the sales price of the property is within the sales price limit for a home in the location you wish to purchase, you are eligible to utilize the low interest rate CHFA program. Eligible properties are a one-to four-family home or condominium. A participating lender will determine if you qualify for a loan and how much of a loan you will qualify for based upon your income and credit information.

Q. How do I qualify for a down payment assistance loan?
A. If you lack the necessary funds for a down payment, and meet all the other program parameters for a CHFA first mortgage loan, CHFA can lend you the necessary funds for a downpayment in the form of a second mortgage. If you do not have enough funds for the closing costs, CHFA will also be able to lend you additional funds.

Q. What is the application process?
A. Once you have found a home you will contact a participating lender. The lender will determine your eligibility and underwrite the loan for approval. The process from loan application to loan closing can take up to six weeks.

Q. What are your income limits and sales price limits?
A. click here for Sales Price and Income Limits

Q. What is your current interest rate, terms and points?
A. click here for Current rate and terms

Q. Is the CHFA program only for first time homebuyers?
A. No. If you have not owned a principal residence for the past three years you may be eligible to utilize the program. If you have owned a principal residence in the past three years, you still may be eligible to utilize the program if the home you purchase is in a federally targeted area of the State.

Q. Does CHFA inspect the home I purchase?
A. No. The home is appraised only for the purpose of determining the maximum mortgage amount. We strongly recommend that you hire a qualified home inspector to perform a thorough inspection of the property.

Q. What is the minimum down payment required for a CHFA loan?
A. The down payment can be as little as $0 if you are eligible for the down payment assistance program. Generally it is as little as 3% of the purchase price.

Q. Can I refinance my existing mortgage?
A. No. The CHFA program is a purchase loan program which is generally aimed at first time homebuyers.

Q. Do I have to attend homeownership counseling in order to obtain a CHFA loan?
A. We strongly recommend that all first time homebuyers attend or take pre-purchase counseling. We require counseling for borrowers utilizing the Downpayment Assistance Program and/or the Homeownership Program. CHFA provides a quarterly counseling schedule for borrowers who are required to take counseling and are registered for either of the above-mentioned programs.

Q. How do I know if a condominium is approved by CHFA?
A. CHFA has a list of eligible condominiums. You must also be sure the condominium is approved for mortgage insurance or guarantee by a private mortgage insurer (PMI), the Federal Housing Administration (FHA), the Veterans Administration (VA), Rural Development (RD) or by Fannie Mae depending on how the mortgage will be insured or if it is uninsured.

Q. How is the household income calculated for qualifying income limit purposes?
A. All sources of income are utilized for determining the household income for income limit purposes including but not limited to, 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 Guard. Income from all adult (other than full time students) members of the household (occupants 18 years or older) will also be included for income limit purposes. When the borrower is purchasing a two-to four unit property, 100% of the market gross rental income for the rental units will be counted towards the income limits. Also, income from any employment within the last 90 days of the employment date may be used for income limit purposes.

Q. What is Recapture Tax and how does that work?
A. Recapture Tax

Q. Do all CHFA loans have to be government insured?
A. The insurer or guarantor of a CHFA loan must be the Federal Housing Administration (FHA), the Veterans Administration (VA) or Rural Development (RD) unless the borrower has a 15% down payment in which case private mortgage insurance may be utilized, a 20% down payment in which case the mortgage may be uninsured, the loan is for newly-constructed housing or a condominium that has not yet been approved by a government insurer or guarantor.

Q. What are your underwriting ratios?
A. CHFA accepts the mortgage insurer or guarantors ratios for underwriting. In the case of an uninsured loan the lender will follow Fannie Mae guidelines.

Q. What are your guidelines regarding credit and/or bankruptcy?
A. CHFA accepts the mortgage insurer or guarantors guidelines for underwriting. In the case of an uninsured loan the lender will follow Fannie Mae guidelines.

Q. Are co-signers allowed?
A. No. A CHFA loan can only be made to owner occupants, therefore a co-signer can not be allowed.