First-Time Home Buyer Programs in Connecticut

Connecticut's statewide homebuyer programs come from the Connecticut Housing Finance Authority (CHFA). CHFA offers conventional and government-insured mortgages, several forms of down payment assistance, and specialty loans for renovation and manufactured homes, all through CHFA-participating lenders, and it requires a homebuyer education workshop for anyone getting a CHFA loan. Eligibility and terms vary by borrower, property and program, so confirm the details with CHFA and a participating lender.

What CHFA is

CHFA is Connecticut's state housing finance agency. Its homeownership programs are aimed at helping residents buy a home with financing and with help covering the down payment and closing costs.

You do not apply to CHFA directly. CHFA directs buyers to contact a CHFA-participating lender to find out which mortgage fits, and it publishes a list of approved lenders. The lender takes your application, works through CHFA's guidelines with you and closes the loan.

CHFA homebuyer programs by name

CHFA's homebuyer mortgage programs include:

• HFA Advantage Loan Program and HFA Preferred Loan Program. Conventional fixed-rate loans through Fannie Mae and Freddie Mac, with low-cost mortgage insurance.
• Government Insured Mortgage Program. FHA, VA and USDA loans, paired with CHFA down payment assistance.
• Down Payment Assistance Program (DAP). Help for buyers who do not have enough savings to cover the down payment and closing costs.
• Time To Own - Forgivable Down Payment Assistance Program. Forgivable down payment and closing cost assistance for first-time buyers.
• Next Move with Deferred Down Payment Assistance Program. For first-time and repeat buyers who do not qualify for the more restrictive Make it Yours program. CHFA ties its eligibility to area income guidelines.
• CHFA Renovation Loan Programs Pilot. Financing for repairs or improvements together with the purchase, with FHA 203(k) and conventional options.
• Mobile Manufactured Home Loan Programs. Financing to buy or refinance a year-round mobile manufactured home in a state-licensed park.
• Homeownership Mortgage for Residents of Public Housing. A second mortgage to help with the down payment for public housing residents or households receiving rental assistance.

The assistance programs are structured differently. Some are deferred, some are forgivable, and some carry their own terms. Ask your lender to explain how any assistance you are offered works, including what happens if you sell or refinance.

Income limits, sales price limits, credit guidelines and funding can all change. Check eligibility and current terms with CHFA and a participating lender before you count on any program.

Homebuyer education in Connecticut

CHFA states that a homebuyer education workshop is required for anyone obtaining a CHFA loan. There are two paths:

• Pre-Purchase workshop. Open to buyers before a CHFA loan is in process, which makes it useful while you are still planning.
• Pre-Closing workshop. Only for applicants who have a CHFA loan reservation in process. At least one applicant must attend unless they recently completed the Pre-Purchase class.

If you are buying a two- to four-unit property, CHFA also requires a Landlord Education Workshop.

The classes are provided by CHFA-participating, HUD-approved housing counseling agencies. Many are held in person on weekday evenings and Saturdays around the state, some agencies offer virtual sessions or classes in Spanish, and the Pre-Closing course is also available online through a provider your CHFA-participating lender can give you access to. CHFA posts a Homebuyer Education Calendar, and your lender can refer you to a nearby agency.

Treat the workshop as more than a box to check. HUD describes housing counseling as a free or low-cost way to work out how much home you can afford, budget for a mortgage payment, protect your credit and understand what happens at closing. Because the counselors are HUD-approved and impartial, they can also help you compare loan types and think through questions to ask your lender before you commit.

How to work with a CHFA-participating lender

1. Pick from CHFA's approved list. Not every lender offers CHFA loans. Ask each one which CHFA programs and assistance options it works with.
2. Plan the education step early. Decide whether you will take the Pre-Purchase workshop now or the Pre-Closing workshop once your reservation is in process, so it does not hold up closing.
3. Match the loan to the property. If the home needs work, ask about the Renovation Loan Programs Pilot. If it is a manufactured home in a licensed park, ask about the Mobile Manufactured Home Loan Programs.
4. Compare Loan Estimates. Get a Loan Estimate for the CHFA option and any other loan you are considering, and compare cash to close and monthly costs on the same form.

Approval is subject to credit approval, property review and program guidelines. A lender can tell you whether you may qualify, but cannot promise eligibility before reviewing your full application.

Connecticut closing items to know about

Real estate conveyance tax

Connecticut has both a state real estate conveyance tax and a municipal real estate conveyance tax on deeds. The tax is reported on Form OP-236, the Connecticut Real Estate Conveyance Tax Return, which is accepted by the town clerk. The Department of Revenue Services also offers e-REC, a free online system for filing the return and paying electronically in participating towns.

Your purchase contract and local practice determine how closing costs are divided, so ask your attorney how the conveyance tax is handled in your transaction. Your Closing Disclosure will show the final charges. When the return is filed through e-REC, the filer receives a notice once the town clerk accepts it, which gives the closing a clear record that the conveyance tax return is complete.

Property tax relief

Connecticut's state property tax credit for homeowners is aimed at specific groups rather than all buyers. The Homeowners' Elderly/Disabled Circuit Breaker Tax Relief Program provides a credit on the property tax bill for homeowners who live in the home, are elderly or totally disabled, and meet income guidelines. You apply through your local Assessor's Office during the state's filing period.

Many first-time buyers will not qualify for that program, but it can matter if you are buying with an older parent or a household member with a disability. Ask your town assessor what relief may be available, and talk to a tax professional about how any of these apply to you.

Connecticut first-time buyer checklist

• Review CHFA's homebuyer mortgage programs and assistance options.
• Choose a lender from CHFA's list of participating lenders.
• Sign up for a Pre-Purchase workshop, or plan for the Pre-Closing workshop once your loan reservation is in process.
• If buying a two- to four-unit home, plan for the Landlord Education Workshop too.
• Gather income, asset, employment and credit documents.
• Ask your attorney how the state and municipal conveyance tax will be handled.
• Compare Loan Estimates side by side.
• After closing, ask your town assessor about any property tax relief you may be eligible for.

Frequently asked questions

Next steps

• First-Time Home Buyer Loans
• Connecticut mortgage overview
• First-time buyer loans in Connecticut
• First-time buyer loans in Bridgeport
• First-time buyer loans in Hartford
• First-time buyer loans in New Haven
• First-time buyer loans in Norwich
• First-time buyer loans in Waterbury
• First-time buyer loans in Danbury
• First-time buyer loans in Stamford
• First-time buyer loans in Norwalk
• First-time buyer loans in New Britain
• First-time buyer loans in Bristol
• First-time buyer loans in Meriden
• First-time buyer loans in West Haven

Sources

• CHFA: All Homebuyer Mortgage Programs
• CHFA: Homebuyer Education
• CT Department of Revenue Services: Real Estate Conveyance Tax Change
• CT Department of Revenue Services: Special Notice on Conveyance Tax Exemptions
• CT OPM: Homeowners' Elderly/Disabled Circuit Breaker Tax Relief Program
• HUD: Housing Counseling and You (First-Time Homebuyers)