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CHFA HOMEBUYER MORTGAGE PROGRAMS Homebuyer Mortgages are for first-time homebuyers purchasing a home anywhere in Connecticut or prior homeowners purchasing in a targeted area of the State. Downpayment Assistance Loans are available as a second mortgage to cover the cost of a downpayment and/or closing costs associated with a home purchase. HOMEBUYER MORTGAGE PROGRAM GUIDELINES Eligibility Requirements (Eligibility requirements are for all CHFA Homebuyer Programs. Some exceptions may apply.) Income and sales price limits apply to CHFA mortgages. CHFA requires that you be a first-time homebuyer or have not had an ownership interest in a principal residence for the past three years. If you are a prior homeowner, you may still be eligible to utilize the program if purchasing a home in a targeted area of the State. Property Requirements Eligible properties include: You must reside in the home you purchase. Existing and new single family homes, townhouses, and Planned Unit Developments (PUDs). Condominiums on CHFA’s approved list. Two- to four-family homes that have been used as residences for the past five years and newly constructed two-family homes in targeted areas. Mobile homes that meet FHA guidelines. The property may not be a recreational (vacation) home or an investment (rental) property. No part of the property may be designed for commercial purposes. The property acquisition price must not exceed the applicable CHFA sales price limit per the limits listed on the insert in the back of this brochure. Newly constructed homes must meet FHA’s energy efficiency standards Loan Terms (First Mortgage) CHFA provides a 30-year, fixed rate mortgage. Interest rates are subject to change weekly. For current rate information, please contact Welcome Home Mortgage Downpayment Assistance Program (DAP) (2nd Mortgage) If you lack the necessary funds for a downpayment, you may qualify for a Downpayment Assistance Program (DAP) loan. Downpayment assistance is available statewide to eligible borrowers. Downpayment assistance may also be available in selected areas through the USDA Rural Development (RD). The DAP loan, which is offered at a below-market interest rate, is secured by a second mortgage on your home. Closing cost assistance is also available. Your annual income must be sufficient to support both the CHFA first mortgage and the DAP loan payments. If the home you wish to buy meets CHFA’s first mortgage program requirements, it will also meet the property requirements for a DAP loan. The minimum DAP loan amount is $3,000. There is a $200 application fee for a DAP loan. If you obtain a DAP loan, you will be required to attend a 3-hour homebuyer education class prior to closing your loan. Homebuyer Counseling Agencies hold classes at several locations in the State each month. Welcome Home Mortgage will give you information on homebuyer education including Homebuyer Counseling Agency class schedules with locations. An origination fee equal to one percent of the loan amount (one point) is charged. You are qualified for a mortgage loan based on credit, income, employment history, and other underwriting criteria. Downpayment Requirements Generally, a downpayment of at least 3% of the total purchase price is required, depending on the mortgage insurer. (Loans eligible for guarantees from the VA or RD may not require any downpayment.) If you lack the necessary funds for a downpayment, you may qualify for a downpayment assistance loan. Downpayment assistance is available statewide to eligible borrowers. Downpayment assistance may also be available in selected areas through the USDA Rural Development (RD). Federal Recapture Tax Under certain circumstances, CHFA mortgage loans may be subject to Federal Recapture Tax. The payment of federal recapture tax occurs at the time the property is sold, only if all three of the following conditions apply: 1. Your home is sold or disposed of within nine (9) years of being purchased, for reasons other than your death; 2. There is a capital gain on the sale of the home; and 3. Your household income exceeds Federal Recapture Tax limits at the time of the sale. We will provide you with a statement regarding the recapture tax, and you must review and sign a disclosure at application. Please read this information carefully, and ask your Participating Lender for any clarification necessary. Generally, the process from loan application to loan closing is about six weeks. A lender will review the loan application within four weeks from the date of application. CHFA issues a commitment to purchase the loan from the Participating Lender, usually within 24 to 48 hours from receipt of the application packet. The closing can be scheduled upon receipt of commitment. Sales Price and Income Limits To ensure the CHFA’s programs help low- and moderate-income homebuyers, there are restrictions on the sales price and income limits. Please contact Welcome Home Mortgage for limits Income limits vary depending on what Homebuyer Program you go with, and where you are purchasing your home. The combined annual income of all persons who will occupy the home will be counted as household income. This includes overtime pay, part-time employment, bonuses, income from self-employment, etc. CHFA sales price limits are in effect for all CHFA Homebuyer Mortgage Programs.
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