Connecticut ranked seventh in Sharecare’s most recent Well-Being Index, a signal that living here translates to a higher quality of life compared to other states. If you’re ready to become a homeowner in this state, a good place to start is the Connecticut Housing Finance Authority (CHFA). The agency has been around since 1969, and since then, some 145,000 Connecticut residents have leveraged its programs to buy their first homes.

Connecticut first-time homebuyer loan programs

HFA Advantage and HFA Preferred loans

The Connecticut Housing Finance Authority (CHFA) offers both the Fannie Mae HFA Preferred and Freddie Mac HFA Advantage mortgages, which are low-down payment conventional loans. These two programs are popular with first-time homebuyers in Connecticut because they come with below-market interest rates, no upfront mortgage costs and lower mortgage insurance costs if you’re making a down payment less than 20 percent.

To qualify, you can’t exceed the CHFA income and purchase price limits, which vary by city or town. You can check this CHFA resource map to see what the limits are where you plan to buy. Additional requirements include:

  • Must be your first home or must not have owned a home in the last three years
  • Must complete homebuyer education course
  • Must be a single-family home, condominium, townhome or planned unit development (PUD); can be a two- to four-unit home for HFA Preferred loan
  • Must be a primary residence

CHFA Conventional AMI Loan Program (CALP)

The CHFA’s Conventional Area Median Income Loan Program (CALP) offers loans to first-time homebuyers who can’t qualify for an HFA Advantage or HFA Preferred loan because their income is higher than 80 percent of the area median income (AMI). CALP comes with the same benefits as an HFA Advantage or HFA Preferred loan, and income and purchase price limits also apply. You’ll also be required to take a homebuyer education course to qualify.

The CHFA also has specialized homebuying programs for certain types of borrowers. These include:

  • CHFA Home of Your Own Program – First-time homebuyers who have a disability — or plan to live with a family member with a disability — could be eligible for a below-market rate loan through the CHFA. In addition to meeting income and purchase price limits, you must provide proof of the disability and attend a homebuyer education course in order to qualify.
  • CHFA Public Housing Residents Program – First-time buyers who are currently rental housing tenants or in a rental assistance program could qualify for a reduced-interest rate mortgage. You must meet minimum credit, employment and income requirements to be eligible for the program.
  • CHFA Military Homeownership Program – Available to first-time buyer veterans, current military members and surviving spouses, this CHFA program cuts an additional 0.125 percent off any already low-rate mortgage through the agency. You’ll need to meet income and purchase price limits and attend a homebuyer education course to qualify.
  • CHFA Police Homeownership Program – First-time buyers who are police officers can also receive a 0.125 percent discount off a low-rate mortgage through the CHFA. You must be buying a home in one of 23 participating towns where you work, or, if you’re a state police officer, in any participating town. If your town isn’t a participant, the CHFA might still be able to help you qualify, so be sure to ask.
  • CHFA Teachers Mortgage Assistance Program – First-time buyers who are teachers can get an additional 0.125 percent off a below-market rate loan through the CHFA. Minority teachers can get a steeper discount of 0.250 percent, and also other incentives if they graduated from a Hispanic-serving institution, historically Black college or a public high school within a state “educational reform district.” To qualify overall, you must be employed in a “priority school district,” a “State-Identified Subject Matter Shortage Area” or “Alliance District,” which are listed on the CHFA website. If employed in a priority district, the home you’re buying must be in that district as well, unless you’re a minority teacher.
  • CHFA Mobile Manufactured Home Loan Program – Available to first-time and repeat buyers, this program allows mobile home buyers to take advantage of lower closing costs and a low interest rate. There is a 20 percent down payment requirement. Along with meeting income and purchase price limits, you must meet mobile home guidelines set by the CHFA: the home is a primary, year-round residence in a state-licensed mobile home park and on a permanent foundation with no axles, hitches or wheels. In addition, you’ll need to sign a renewable annual lot lease agreement. There’s no income limit if you’re buying a mobile home in a designated “Targeted Area.”

Connecticut down payment assistance

CHFA Downpayment Assistance Program (DAP)

The CHFA Downpayment Assistance Program (DAP) for first-time homebuyers offers low-interest second mortgages up to $20,000 to be put towards a down payment or closing costs. For loans made in 2023, the interest rate is just 1 percent (with an APR ranging from 1.1 percent to 1.5 percent).

The down payment assistance can be paired with any CHFA loan with the exception of the Mobile Manufactured Home Loan. To be eligible, you must qualify for a CHFA first mortgage, contribute at least $1,000 towards the purchase and attend a homebuyer education course. According to the CHFA, around 50 percent of borrowers working with the agency take advantage of the program.

Time to Own Forgivable Down Payment Assistance

For a limited time, CHFA is offering a forgivable, zero-interest loan with no monthly payments to offset the expense of a down payment and closing costs. The loan amount can be as high as $50,000 in designated areas.




SmartMove Connecticut

SmartMove Connecticut offers low-interest loans (3 percent interest; APR of 3.42 to 4.74 percent) to help qualifying homebuyers. It’s a second mortgage that, when applied to down payments and closing costs, can result in borrowers having to put down as little as of 1 percent of their dream home’s purchase price. You must meet income and purchase price limits, work with a participating lender, and complete homebuyer education.

Other first-time homebuyer loan programs

Along with CHFA help, there might be first-time homebuyer assistance available from the city where you want to live. For example, in Fairfield, the town has a program funded by the Department of Housing and Urban Development that can help eligible low-income buyers secure no-interest loans for down payment assistance up to $30,000 (due to be repaid when you move or refinance) and grants up to $2,500 for closing costs. Ask your loan officer or real estate agent what options might be available to you.

Also, look into nationally-available low- or no-down payment loan programs. These include FHA, VA and USDA loans, which have qualifying criteria that aren’t as strict compared to conventional loans. With any of these programs, you could be approved for a loan even if you have a lower credit score or can’t afford a higher down payment amount. For more information on these types of mortgages, go to Bankrate’s first-time homebuyer loans and programs guide.

Get started

Before you start looking for properties in Connecticut, check out the CHFA’s Resource Map to see if you can qualify for one of the authority’s low-interest loans and/or if your search includes a targeted area. Then, browse the CHFA’s list of nearly 70 approved mortgage lenders and banks. A lender can help you determine what programs you’d be eligible for and how much assistance you could receive. Don’t settle for the first offer you see, though. When buying a home, it pays to compare mortgage rates and look at terms from multiple lenders to lock in the best deal.

With additional reporting by David McMillin