Hey there, future homeowners! 🏡 As a real estate agent in Connecticut, I'm excited to share some insider knowledge about the incredible down payment assistance programs offered by the Connecticut Housing Finance Authority (CHFA). These programs are designed to make homeownership more accessible and affordable for families across the state. Let's dive in and explore your options!
1. Down Payment Assistance Program (DAP) Loan
CHFA understands that saving for a down payment can be a significant obstacle for many first-time homebuyers. That's why they offer the Down Payment Assistance Program (DAP) Loan, designed to help eligible individuals cover the upfront costs associated with purchasing a home. 🏡💰 Here's what you need to know:
Benefits:
Financing for Down Payment and Closing Costs: The DAP Loan provides financing to cover both the down payment and closing costs, making homeownership more attainable.
Assistance Up to $15,000: Eligible borrowers may receive assistance of up to $15,000, helping to reduce the financial burden of purchasing a home.
Low-Interest Rates: The interest rate on the DAP Loan will be equal to the first mortgage interest rate in effect or 5.00% APR, whichever is less.
Eligibility Requirements:
CHFA Mortgage: You must first apply for and qualify for a CHFA mortgage from a CHFA-Participating Lender to be eligible for the DAP Loan.
Ability to Repay: Borrowers must demonstrate their ability to repay both the CHFA first mortgage and the DAP Loan to qualify for assistance.
Loan Amount: The loan amount will be equal to 4.00% of the sales price or the appraised value, whichever is less.
Additional Considerations:
Minimum Loan Amount: The DAP Loan must be at least $3,000 but no more than the minimum down payment required for your home, typically between 3% and 3.50%.
Homebuyer Education: Before closing, you'll be required to attend a free Homebuyer Education class to help you understand the home-buying process and provide tips for maintaining your new home. Classes are available online and at various locations across Connecticut.
2. Time to Own - Forgivable Down Payment Assistance
For a limited time, CHFA is offering the Time To Own - Forgivable Down Payment Assistance loan, providing much-needed support for potential homebuyers who may struggle to cover the down payment and closing costs required for their first home. 🏡💰 Here's what you need to know:
Benefits:
0% Interest Rate: With the Time To Own loan, you'll enjoy a 0% interest rate with no monthly payments required, making homeownership more affordable.
Forgivable Principal Balance: Ten percent (10%) of the principal balance will be forgiven annually on the anniversary date of the loan closing, until the loan is fully forgiven on the tenth anniversary.
Financing for Down Payment and Closing Costs: You can receive financing to cover up to 20% of the down payment and up to 5% of closing costs, helping to alleviate the financial burden of purchasing a home.
Loan Amounts: Loan amounts vary depending on the location of the home. Up to $50,000 is available for homes located in High or Very High Opportunity Areas, while up to $25,000 is available for homes in other areas.
Eligibility Requirements:
The Time To Own loan is available to eligible applicants who qualify for and receive a CHFA first mortgage.
Applicants must be current residents of Connecticut and able to demonstrate residency for the most recent three (3) years.
Non-first-time homebuyers may also apply if they plan to purchase in a targeted area of the state and do not own any other property at the time of the CHFA mortgage closing.
Additional Considerations:
The minimum Time To Own loan amount is $3,000.
Applicants must meet all CHFA first mortgage and Time To Own loan program eligibility and underwriting criteria. Your CHFA-Participating Lender will assist you in determining complete program eligibility requirements.
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3. FHA 203(K) Renovation Program
At CHFA, we understand that finding your dream home might mean finding a diamond in the rough that needs a little TLC. That's where the FHA 203(k) Renovation Mortgage Programs come in, offering first-time homebuyers the opportunity to finance both the purchase price of their home and the cost of renovations under one mortgage. 🏠🔨 Here's what you need to know:
Benefits:
Below-Market Interest Rate: Enjoy a below-market interest rate on your mortgage, making homeownership more affordable.
All-in-One Financing: Purchase your home with the cost of renovations included, eliminating the need for separate financing for home improvements.
Eligible Properties:
Single-family homes or FHA-approved condominiums.
Multi-unit properties that can be converted into two- to four-family homes.
Eligibility Requirements:
Must be a first-time homebuyer or have not owned a home in the past three years.
The purchased home must become your primary residence within one year from closing.
Total purchase and rehabilitation costs must not exceed FHA Maximum Loan Limits.
Must have a construction contract with a state-licensed general contractor.
Sales price of the home must be within CHFA Sales Price Limits, and your gross income must be within CHFA Income Limits.
Renovations Covered Include:
Electrical
HVAC systems
Purchase of new appliances (up to $2,000)
Roofs
Health and safety standards
Sewer hookup
Well and septic systems
Targeted Areas:
Eligible applicants purchasing in a federally Targeted Area may qualify for a reduced interest rate.
Follow income limits for "Targeted Areas" reflected on the CHFA Income, Sales Price Limits, Target Area chart.
Additional Considerations:
Attend a free Homebuyer Education class prior to closing to understand the home-buying process and receive tips for maintaining your new home.
Federal Housing Administration (FHA), Veteran Administration (VA), or USDA-(RD) mortgage insurance will be required.
After closing, funds for home repairs will be held by your lender in a separate escrow account, with any unused funds applied to the principal balance of your loan.
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4. Veterans and Military Service Members
At CHFA, we're honored to serve those who have served our country. That's why we offer the Military Homeownership Program, designed to make homeownership more attainable for veterans and Military Service members. 🎖️🏠 Here's what you need to know:
Benefits:
Below-Market Interest Rate: Enjoy a below-market interest rate mortgage, with an additional 0.125% off for veterans or Military Service members.
Targeted Area Rate Discount: Applicants purchasing in a federally Targeted Area may qualify for a further reduced interest rate.
Down Payment Assistance Available: Assistance is available to help cover down payment costs, making home ownership more affordable.
Eligibility Requirements:
Must be a first-time homebuyer or have not owned a home in the past three years.
Your new home must become your primary residence.
Sales price of the home must be within CHFA Sales Price Limits, and your gross income must be within CHFA Income Limits.
Eligible Properties:
Single-family homes, townhouses, and planned unit developments (PUDs).
Condominiums that are FHA/VA-approved or Fannie Mae-eligible.
Two-to-four unit homes that have been used as residences for the past five years.
Newly constructed two-family homes that meet FHA energy efficiency standards.
Targeted Areas:
Eligible applicants purchasing in a federally Targeted Area may qualify for further interest rate reductions.
Follow income limits for "Targeted Areas" reflected on the CHFA Income, Sales Price Limits, Target Area chart.
Additional Considerations:
Attend a free Homebuyer Education class prior to closing to understand the home-buying process and receive tips for maintaining your new home.
Obtain mortgage insurance when the financed amount exceeds 80% of the appraised value or purchase price, whichever is less.
Be aware of the possibility of a Federal Recapture Tax if you sell your home within the first nine years, earn a profit, and your income exceeds the designated threshold. Consult a tax professional for guidance on the Recapture Tax.
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Ready to take the next step towards homeownership? Contact me today to learn more about these amazing down payment assistance programs and start your journey towards owning your own home! 🚀🏡
