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Connecticut First-Time Home Buyer Programs of 2018

August 8, 2018
Finding the Right Mortgage, Mortgages
Connecticut First-Time Home Buyer Programs of 2018
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Buying a first home in Connecticut can be a financial challenge. Help is available for first-timers, whether they’re shopping for a New Britain colonial, a New Haven condo or a New London cottage. Over nearly five decades, the Connecticut Housing Finance Authority, or CHFA, has assisted some 139,000 low- to moderate-income first-time buyers with below-market-rate mortgages and down payment assistance. CHFA considers you a first-time buyer if you have not have owned a home within three years.

National first-time home buyer programs

First-time home buyers in any of the 50 states may use these national mortgage programs with conventionalFHAVA or USDA loans to ease the cost of buying a home.

Conventional mortgage

National program

Best for

Low down payment

Limited mortgage insurance premiums

What you need to know

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a

 

FHA loans

National program

Best for

Low credit score

Low down payment

What you need to know

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment

 

VA loans

National program

Best for

Military

Low down payment

What you need to know

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most

 

USDA loans

National program

Best for

Low down payment

Rural

What you need to know

The USDA home loan program encourages rural and suburban homeownership by offering zero-down-payment mortgages to lower-income buyers. Borrowers with nontraditional credit data, like rent or utility payments, can still apply, but those with a score of 640 or above will experience faster loan

CHFA first-time home buyer programs

Connecticut offers first-time home buyers several ways to afford a home in the Constitution State. CHFA’s Homebuyer Mortgage Program gives buyers a chance at below-market interest rates. Another home loan program includes low-cost mortgage insurance with a conventional mortgage. The state helps disabled buyers, public housing tenants, educators, police officers and military service members get a mortgage with additional mortgage discounts. And, for those eligible, down payment assistance is available with some loans.

CHFA highlights and eligibility requirements

ELIGIBILITY

  • The home must be your primary residence.
  • Home price and income limits apply.
  • Free home buyer education is required.

HIGHLIGHTS

  • Down payment assistance is available with most loans.
  • Programs are available for public housing tenants, educators, police and disabled and military borrowers.
  • First-time home buyer requirement is waived, and a rate discount offered, in federally designated areas targeted for revitalization.

» MORE: Tips for first-time home buyers

HFA Advantage and HFA Preferred Loans

State program

Learn more

at CHFA

Best for

Low mortgage insurance

Low interest rate

What you need to know

These loans offer eligible first-time home buyers lower monthly mortgage insurance premiums with a conventional mortgage. No upfront mortgage insurance payment is required, and the mortgage insurance is canceled when your equity reaches 20%. Limits on borrower income and sales price vary by

 

Military Mortgage Option

State program

Learn more

at CHFA

Best for

Military

What you need to know

First-time home buyers who are current service members or veterans, including the Army National Guard and Air National Guard, may receive an additional 0.125 percentage point discount on CHFA’s below-market interest rates.

 

Teachers Mortgage Assistance

State program

Learn more

at CHFA

Best for

Educators

What you need to know

To help teachers afford homeownership in communities where they work, CHFA offers qualifying first-time buyers an extra 0.125 percentage point discount on CHFA’s below-market interest rate. Requirements: * Must purchase a home in a school district designated “priority” or “transitional.” * Or

 

Police Homeownership Program

State program

Learn more

at CHFA

Best for

First responders

What you need to know

CHFA offers an extra 0.125 percentage point discount on its below-market interest rate for municipal police officers purchasing homes in certain cities and towns where they work. State police officers may use the program, too, if buying in participating towns. Some municipalities also offer officers

 

Home of Your Own Program

State program

Learn more

at CHFA

Best for

Disabilities

What you need to know

First-time home buyers with a disability may be eligible for either a low-interest home loan with no down payment or down payment assistance. If you are not disabled but a disabled family member will be living in the home with you, you may be eligible. Documentation of the disability is required.

 

Homeownership for Public Housing Residents

State program

Learn more

at CHFA

Best for

Public housing residents

What you need to know

Tenants in public housing and those using housing assistance may be able to use CHFA’s below-market interest rates to buy a first home. Qualified tenants must rent in public housing or get rental assistance from CHFA, the Department of Housing and Urban Development or a local housing authority.

 

Downpayment Assistance Loan

State program

Learn more

at CFHA

Best for

Down payment assistance

What you need to know

First-time borrowers also may be able to get a second mortgage of $3,000 or more to cover down payment costs. The DAP loan is at the same interest rate as your primary mortgage. Requirements: * You don’t have the savings for a down payment but do have enough monthly income to make monthly payments

 

Your next step

If these loans and programs sound like a fit for you, check out the details at the CHFA website. The next step is to contact one of the many CHFA-approved lenders who can see whether you qualify and help you apply. Also, be sure to explore every option. Ask your city’s or town’s Department of Economic and Community Development if they have other down payment assistance grants or low-interest loans.
 
» MORE: Find the best Connecticut mortgage lenders
 
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