What is the CHFA Homebuyer Mortgage Program?
The Connecticut Housing Finance Authority (CHFA) Homebuyer Mortgage Program offers 30-year fixed-rate mortgages at below-market interest rates to assist low- and moderate-income individuals and families in purchasing their first homes.
Who is eligible for the CHFA Homebuyer Mortgage Program?
Eligibility requires applicants to be first-time homebuyers or individuals who have not owned a home in the past three years. Exceptions are made for those purchasing in targeted areas or qualified veterans. Additionally, applicants must meet CHFA's income and sales price limits, which vary by location and household size.
What are targeted areas, and how do they affect eligibility?
Targeted areas are specific communities designated for revitalization based on federal guidelines. Purchasing a home in these areas may provide benefits such as waived first-time homebuyer requirements and potential interest rate discounts.
Are there income and sales price limits?
Yes, CHFA sets income and sales price limits that vary by county and household size. These limits ensure assistance is provided to those most in need and are subject to periodic adjustments.
Is homebuyer education required?
Yes, all applicants must complete a CHFA-approved homebuyer education course before closing. This course educates buyers on the home purchasing process and responsibilities of homeownership.
What types of properties are eligible?
Eligible properties include single-family homes, townhouses, planned unit developments (PUDs), and condominiums approved by FHA, VA, or USDA-RD. Two- to four-unit homes are also eligible if they have been used as residences for the past five years.
Can I receive assistance with down payment and closing costs?
Yes, CHFA offers down payment assistance programs, such as the Time To Own forgivable loan, which provides up to $25,000 to cover down payment and closing costs. This loan features a 0% interest rate and is forgiven over ten years.
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Get Started NowAre there specific credit requirements?
While CHFA does not set a minimum credit score, individual lenders may have their own requirements. It's essential to consult with your lender to understand the specific credit criteria applicable to your situation.
Is mortgage insurance required?
Depending on the loan type and down payment amount, mortgage insurance may be required. For example, FHA loans require both upfront and annual mortgage insurance premiums.
Can I use this program for a second home or investment property?
No, the CHFA Homebuyer Mortgage Program is intended for primary residences only. Applicants must occupy the purchased property as their primary residence.
Are there any fees associated with the program?
Standard loan fees, such as origination and processing fees, may apply. It's advisable to discuss all potential fees with your lender to understand the total cost of the loan.
Is there a prepayment penalty?
No, there is no prepayment penalty for CHFA loans. Borrowers can make additional payments or pay off the loan early without incurring extra charges.
What happens if I sell or refinance my home?
If you sell or refinance your home within the first nine years, you may be subject to a federal recapture tax, depending on your income and the amount of gain from the sale. CHFA may reimburse you for this tax if certain conditions are met.
Are there any special programs for veterans?
Yes, qualified veterans may be eligible for CHFA mortgage programs without being first-time homebuyers and may receive additional benefits, such as interest rate discounts.
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Get Started NowCan I combine the CHFA mortgage with other assistance programs?
Yes, CHFA mortgages can be combined with other assistance programs, such as the Time To Own forgivable loan, to further reduce out-of-pocket expenses for homebuyers.
What is the Time To Own forgivable loan?
The Time To Own forgivable loan provides up to $25,000 in down payment and closing cost assistance. It features a 0% interest rate with no monthly payments, and 10% of the principal balance is forgiven annually over ten years.
Are there purchase price limits?
Yes, the program imposes purchase price limits that vary by county and household size. It's important to consult the current CHFA guidelines to determine the applicable limits for your desired location.
What are the debt-to-income (DTI) ratio requirements?
The program has DTI ratio limits, which may vary based on credit score and loan type. Generally, a maximum DTI of 50% is allowed, but it's essential to verify with your lender.
How do I apply for the CHFA Homebuyer Mortgage Program?
To apply, contact a CHFA-approved lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.
Is there a deadline to apply for the program?
There is no specific deadline to apply for the CHFA Homebuyer Mortgage Program. However, program availability is subject to funding, so it's advisable to begin the application process as soon as you are ready to purchase a home.