If you’re purchasing your first home in Connecticut, you can find affordable mortgage options through the Connecticut Housing Finance Authority. Through this agency, eligible first-time homebuyers in The Constitution State can take advantage of low-rate mortgages and down payment assistance. Buyers who are purchasing a home in a special “Targeted Area” but are not first-time homeowners can also be eligible for a rate discount. In Connecticut, a first-time buyer is considered someone who hasn’t owned a home in the last three years.
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 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 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 Disabled Persons Homeownership Program (“Home of Your Own”) – 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 with an extra 0.125 percent discount 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, which stipulate that 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. (Note: There’s no income limit if you’re buying a mobile home in a “Targeted Area.”)
Connecticut down payment assistance
CHFA Downpayment Assistance Program (DAP)
The CHFA’s Downpayment Assistance Program (DAP) for first-time homebuyers offers low-interest loans from $3,000 up to $20,000 to be put towards a down payment or closing costs. The loan is a second mortgage and has the same lower interest rate as your first mortgage.
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.
Other first-time homebuyer loan programs
First-time homebuyers in Connecticut should also look into low- or no-down payment loan programs that can help accelerate the path to homeownership. These include FHA, VA and USDA loans, which have qualifying criteria that isn’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.
For other Connecticut homeownership programs, including by city, visit HUD.gov.
First-time homebuyers in Connecticut can use the Connecticut Housing Finance Authority as a resource when searching for affordable mortgage and down payment assistance programs. The CHFA has approximately 70 approved mortgage lender partners. To find the most competitive rate offers, shop around with several Connecticut mortgage lenders. A lender can help you determine what programs you’d be eligible for and how much assistance you could receive.
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