As compared to other states, Connecticut is a worthy place to live for its high average income, well-developed education, and focused health support. If you wish to improve the quality of your life as a first time home buyer in Connecticut, there are financing programs that have your back. Hanfincal has listed them below. Keep reading to know what loan options and down payment assistance plans are available for you in this state.
1. Connecticut First Time Home Buyer Programs
1.1. 1st-Time Homebuyer Programs
1st-Time Homebuyer Programs
Suppose deciding which Connecticut first-time homebuyer programs are essential to you; relying on housing experts is the best advice we can give. 1st-Time Homebuyer Programs include a team of advisors to find you the best financing program targeted to your area and financial situation.
Along the way, they work directly with you and walk you through the steps of finding an affordable resident in Connecticut (CT) or anywhere across the U.S. Based on your needs, they also recommend what to do next to take full benefit from your first-time homebuyer program.
Get a new home in Connecticut is very easy with a free consultant here!
1.2. HFA Advantage and HFA Preferred Loans
The Connecticut Housing Finance Authority (CHFA) provides HFA Advantage and HFA Preferred Loans to assist first-time home buyers with a low-interest rate. Their interest rate is known as under what the market has been offered. They also provide CT first-time homebuyers with insurance cost savings.
These benefits are what you can obtain from them:
- No upfront costs on mortgage insurance costs.
- Monthly mortgage insurance costs are lower than the market.
- When the borrower reaches 20% equity, the mortgage insurance premiums stop.
Eligible properties are:
- Single-family dwellings,
- Townhomes,
- Condominiums eligible for Fannie Mae or Freddie Mac,
- Two-to-four unit houses,
- Planned Unit Developments (PUDs).
To qualify, you must meet these requirements:
- You are a first-time home buyer (who has not owned a home in the last three years).
- You are buying a home that is your primary residence as well.
- The home sales price must not stay within the CHFA Sales Price Limits.
- Your gross income must stay at or under 80% of the Fannie Mae or Freddie Mac area median income (AMI) limits (varying by county).
- If you are not a first-time homebuyer, but you are buying a home in a targeted area, you may qualify.
- You must finish a free homebuyer education class before closing.
1.3. CHFA Down Payment Assistance Program (DAP)
DAP is another program for CHFA that allows first-time home buyers to save money for a down payment and closing costs. About 50% of borrowers have taken advantage of DAP to cover those costs. It works by offering the lowest interest rate in the form of a second mortgage.
Below are the benefits that a DAP loan can offer:
- Up to $2,000 assistance for a down payment and closing costs.
- Second mortgage’s interest rate at just 1.0% (1.10% – 1.50% as APR) for loans in 2022.
To qualify, you must meet some eligibility criteria:
- You must qualify for a CHFA mortgage first.
- You must prove your ability to repay the first mortgage and the second mortgage (DAP loan).
- The minimum amount of your DAP loan must be $3,000 and does not exceed the minimum down payment required.
- You must complete a free Homebuyer Education course before closing.
1.4. CHFA Conventional AMI Loan Program (CALP)
If you cannot qualify for the HFA Preferred or HFA Advantage Loan Programs due to your qualifying income exceeding 80% of the AMI, this program is for you.
It provides a first mortgage loan that aids borrowers in saving on insurance costs with a low-interest rate. If you buy a home in a targeted area, you may still be eligible for CALP.
The benefits, eligible properties, and eligibility requirements remain the same as HFA Advantage and HFA Preferred Loans.
CHFA Conventional AMI Loan Program (CALP)
1.5. Government First-time Homebuyer Programs
When it comes to DPA, there are no other ways than to take a first look at the government-backed first-time homebuyer programs. That’s because, with these national loans, you can get into a new home with just 0% to 3% down.
- Conventional 97 – This loan offers a 3% down payment for a credit score of at least 620. Also, you may be able to end mortgage insurance payments after a few years.
- FHA loan – The Federal Housing Administration structured this loan to provide 3.5% down for a credit score of at least 580. Besides, you are responsible for mortgage insurance premiums within the life of your mortgage.
- VA loan – Service members and qualified veterans go with this loan to get a zero down payment. There’s no mortgage insurance required after closing. But credit score requirement does exist, though it varies by the lender (at around 620).
- USDA loan – This loan requires no down payment for those buying a house in rural areas. You must also have low-to-moderate incomes to use it. Additionally, you will need to buy mortgage insurance with low rates. Credit score depends on lenders, but it often goes around 640.
1.6. Other First-time Homebuyer Programs in Connecticut (CT)
CHFA is really trying its best to offer additional benefits to CT first-time home buyers who serve the public. It also gives funding options to those with special living conditions so they could have a home in the area.
- CHFA Public Housing Residents Program – This program aims to transform tenants into genuine homeowners. It offers loans with low-interest rates to eligible tenants and those in rental assistance programs backed by CHFA.
- CHFA Home of Your Own Program – Borrowers with disabilities can buy their first home with a low-interest loan under this program. Also, you may be eligible if you will be living with a disabled member of your family.
- CHFA Police Homeownership Program – This program offers an extra 0.125% off the loan already with low interest to police officers. They can only qualify for this program as they are buying a home in their served area.
- CHFA Military Homeownership Program – This program also provides an extra 0.125% off the loan with low interest to military families. It’s open to service members, qualified veterans, and unmarried/surviving spouses.
- CHFA Mobile Manufactured Home Loan Program – If you plan to buy a mobile home as a first time home buyer in Connecticut, this program is for you. You should leverage it for a low-interest rate and closing costs. The mobile home you are buying must be your primary residence. Besides, its sale price must not exceed the CHFA Sales Price Limits.
- CHFA Teachers Mortgage Assistance Program – First-time home buyers who work as teachers in Connecticut can receive a 0.125% off loans with an already low-interest rate. If you are a Recruit and Retain minority teacher, you may get a 0.25% rate reduction along with additional exciting incentives. View detailed requirements here or contact 1st-Time Homebuyer Program to verify your eligibility and get more advice!
2. First-Time Homebuyer In Connecticut Stats
According to Redfin.com, the median list price in Connecticut saw a 7.1% increase from the previous year. In May 2022, it’s calculated at $368,400. Have a look at the overall picture of the Connecticut housing market through the stats below.
- Average Home Sale Price in CT: $368,400
- Minimum Down Payment in CT (3%): $11,000
- 20% Down Payment in CT: $73,680
- Average Credit Score in CT: 728
- Maximum CT Home Buyer Grant: Up to $40,000+ as forgivable loan in Bridgeport
All the programs listed above have the financing potential to provide you with significant benefits. However, you can only make the most of them as you know which assistance option works best for you. When you’re ready to kick start your home buying process, as a first time home buyer in Connecticut, ensure that you have a professional hand by your side. You can only be sure you’re getting the best deal on your new mortgage in this way. Hanfincal hopes this article has been helpful!
