Connecticut Downpayment Assistance Program (DAP)

The Connecticut Downpayment Assistance Program (DAP), administered by the Connecticut Housing Finance Authority (CHFA), is designed to help homebuyers cover the upfront costs of purchasing a home. This program provides low-interest loans for down payments and closing costs, making homeownership more achievable for eligible residents.

Benefits

Offers low-interest second mortgage loans to cover down payment and closing cost expenses.
Reduces the upfront financial burden of purchasing a home, allowing buyers to focus on long-term homeownership success.
Available to first-time and repeat homebuyers who meet eligibility criteria.
Can be paired with CHFA's first mortgage loan programs for a comprehensive homebuying solution.

Eligibility Requirements

Applicants must qualify for a CHFA first mortgage loan to access the DAP.
Income limits apply, varying by household size and the location of the property being purchased.
The property must be located in Connecticut and used as the buyer’s primary residence.
A minimum credit score is required, typically starting at 620, with lender-specific underwriting standards also applying.
Applicants must complete a CHFA-approved homebuyer education course to prepare for the responsibilities of homeownership.

Additional Information

The Connecticut Downpayment Assistance Program (DAP) is a vital resource for homebuyers looking to reduce the financial barriers to purchasing a home. By providing low-interest loans for down payment and closing costs, this program supports responsible homeownership and helps Connecticut residents achieve long-term housing stability and financial security.

Frequently Asked Questions About Our Program

What is the Connecticut Downpayment Assistance Program (DAP)?

The Connecticut Downpayment Assistance Program (DAP) is a loan initiative by the Connecticut Housing Finance Authority (CHFA) designed to help first-time homebuyers cover down payment and closing costs. It provides low-interest second mortgage loans to eligible applicants who have sufficient income to support monthly mortgage payments but lack the upfront funds required for home purchase.

Who is eligible for the DAP loan?

Eligibility for the DAP loan requires applicants to first qualify for a CHFA first mortgage through a CHFA-Participating Lender. Applicants must demonstrate the ability to repay both the CHFA first mortgage and the DAP loan. Additionally, borrowers must meet CHFA's income and sales price limits, which vary by location and household size.

How much assistance can I receive through DAP?

Borrowers can receive assistance up to $15,000 through the DAP loan. The loan amount will be equal to 4% of the lesser of the sales price or appraised value of the property. The minimum DAP loan amount is $3,000.

What is the interest rate for the DAP loan?

The interest rate for the DAP loan will be equal to the first mortgage interest rate in effect or 5.00% (5.10%-5.50% APR), whichever is less. This low-interest rate makes the loan more affordable for eligible homebuyers.

Is homebuyer education required for DAP recipients?

Yes, all DAP loan recipients are required to attend a free Homebuyer Education class prior to closing. These classes help buyers understand the home-buying process and offer tips for maintaining a home.

Can DAP funds be used for both down payment and closing costs?

Yes, DAP funds can be utilized to cover both down payment and reasonable closing costs associated with the purchase of a home, reducing the financial burden on first-time homebuyers.

Are there income and sales price limits for DAP eligibility?

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.

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What types of properties are eligible for purchase with DAP assistance?

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.

Is there a minimum borrower contribution required?

Yes, borrowers are typically required to contribute a minimum of $1,000 toward the purchase of the home. This contribution can come from the borrower's own funds or an acceptable gift.

Can the DAP loan be combined with other assistance programs?

Yes, the DAP loan can be combined with other CHFA programs, such as the Time To Own forgivable loan, to further assist with down payment and closing costs, enhancing affordability for homebuyers.

What are the repayment terms for the DAP loan?

The DAP loan is a second mortgage on your home, requiring monthly payments in addition to your first mortgage. The loan term typically matches the term of the first mortgage, and the interest rate is fixed for the life of the loan.

Is there a prepayment penalty for the DAP loan?

No, there is no prepayment penalty for the DAP loan. 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, the outstanding balance of the DAP loan becomes due and payable. It's important to consider this when making decisions about selling or refinancing your property.

Are there specific credit requirements for DAP eligibility?

While CHFA does not set a minimum credit score for DAP loans, 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.

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Can I use the DAP loan for a second home or investment property?

No, the DAP loan is intended for primary residences only. Applicants must occupy the purchased property as their primary residence.

Are non-occupant co-borrowers allowed with DAP loans?

No, all borrowers must occupy the property as their primary residence. Non-occupant co-borrowers and co-signers are not permitted under this program.

Is mortgage insurance required when using a DAP loan?

Depending on the type of first mortgage loan and the loan-to-value ratio, mortgage insurance may be required. Your lender can provide specific details based on your loan scenario.

How do I apply for the DAP loan?

To apply, you must first qualify for a CHFA first mortgage through a CHFA-Participating Lender. The lender will then assist you in determining your eligibility for the DAP loan and guide you through the application process.

Is there a deadline to apply for the DAP loan?

There is no specific deadline to apply for the DAP loan. 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.

Are there any fees associated with the DAP loan?

Standard loan fees, such as origination and processing fees, may apply to the DAP loan. It's advisable to discuss all potential fees with your lender to understand the total cost of the loan.