Are you a first-time homebuyer dreaming of buying a new home in Connecticut? We don’t blame you. With its charming towns and beaches and New England history, Connecticut is a beautiful place to call home.
The homeownership process can be daunting for first-time homebuyers, though. Thankfully, if you’re looking to buy a home in Connecticut, you can find plenty of help via statewide and local homeownership assistance programs that assist with securing low-interest home loans or with financial assistance for a down payment and closing costs. Read on to learn more about these programs, including eligibility requirements and how to apply.
Who Qualifies as a First-Time Homebuyer in Connecticut?
Connecticut’s statewide and local programs tend to define a first-time homebuyer as any family or individual who hasn’t previously owned a home before, or at least in the past three years.
As always, when you’re doing your research, read the fine print and any limitations listed below. Some programs are only applicable once so if you’ve already claimed this benefit, you won’t be able to do so again.
But here’s some good news: Some state and local programs aren’t restricted to first-time homebuyers. The priority is on helping low-income families with buying a home. Repeat homebuyers who are buying in the state’s targeted areas also may qualify for these programs.
Statewide Homeownership Assistance Programs
The Connecticut Housing Finance Authority (CHFA) has a series of statewide assistance programs to help first-time homebuyers with securing their home loan and saving for a down payment.
While the programs differ, the overarching requirements include being a resident of Connecticut, meeting income limits, completing free homebuyer education, working with a preferred lender and purchasing eligible property types. There are programs and incentives specifically designed for segments of Connecticut residents too, such as teachers, persons with disabilities, police officers and military service members and veterans, as well as residents of public housing looking to transition from renting.
Keep in mind, if you’re not a first-time homebuyer, you may still qualify for these programs if you’re buying a home in a targeted area.
The Housing Development Fund (HDF), a nonprofit organization initially set up to create affordable housing in Stamford, also provides programs for first-time homebuyers. The organization has since expanded to cover the entire state, and is now in New York and Massachusetts as well.
Check out the following CHFA and HDF programs and their full details.
CHFA HFA Advantage and HFA Preferred Loan
The HFA Advantage and HFA Preferred Loan are the most popular programs for first-time homebuyers because they come with lower monthly mortgage insurance premiums, making your overall mortgage payments lower. Your mortgage insurance is canceled once you reach 20 percent equity.
You must be a first-time homebuyer, as defined above, to use these programs, and your home purchase must be your primary residence, so investment and vacation properties are excluded. There are also limitations on your income and the home’s sale price.
See the full details for the HFA Advantage and HFA Preferred loan programs, including the list of preferred lenders and how to contact them for more information.
CHFA Homebuyer Mortgage Program
This program provides homebuyers with a below-market interest rate and down payment assistance. You must be a first-time homebuyer or a homebuyer who hasn’t owned a home in the past three years, unless you’re purchasing a home in a targeted area.
Homebuyers need to attend a homebuyer education course prior to closing — these classes are available online and in person across Connecticut. Homebuyers may also need mortgage insurance.
Here’s a look at the HMP website, which includes a section on eligible properties.
CHFA Downpayment Assistance Program
Saving up for a down payment can often stall prospective homebuyers. If you have enough money to cover your monthly mortgage payments, but you need a hand with your down payment, you can look into the Downpayment Assistance Program (DAP).
The DAP provides first-time homebuyers with a second mortgage of up to $20,000 to help with the down payment and closing costs. The second mortgage is set at a low interest rate.
To qualify for this program, you need to be approved for a CHFA mortgage via a CHFA-approved lender. You’ll also have to contribute at least $1,000 of your own savings toward your down payment and show that you can manage your home loan along with this second mortgage. Read more about the CHFA DAP.
CHFA Military Homeownership Program
If you’re a first-time homebuyer in Connecticut and a veteran, current military services member, or member of the Army National Guard or the Air National Guard, it’s worth looking into the Military Homeownership Program.
The program provides an additional 0.125 percent off the already below-market interest rates available to soldiers and veterans via the CHFA. The program also applies to unmarried, surviving spouses and civil union partners of a veteran who died while in service.
You can pair this program with the DAP and other CHFA loans.
Read more about the CHFA Military Homeownership Program.
CHFA Teachers Mortgage Assistance Program
The CHFA runs a Teachers Mortgage Assistance Program that’s similar to the program offered to military service members and veterans. In this case, teachers can gain access to an additional 0.125 percent off the interest rate on their home loan to help them buy in the communities they work in.
The CHFA will even increase the rate reduction to 0.25 percent to help recruit and retain minority teachers who meet the program’s eligibility requirements. These include being a first-time homebuyer and being employed with a valid teaching certificate in a priority school district.
You can pair this program up with the DAP and other CHFA programs too. Check out the Teachers Mortgage Assistance Program’s website, including the list of priority school districts and other requirements.
CHFA Police Homeownership Program
Police officers across Connecticut can take advantage of the CHFA’s Police Homeownership Program which provides them with an additional 0.125 percent off of their interest rate, similar to the programs above.
If your town is not listed, call the CHFA — the organization notes that it will work with your town on participating in the program. The CHFA also notes that some municipalities offer grants to police officers to help cover closing costs.
CHFA Home of Your Own Mortgage Program
If you’re a first-time homebuyer with a disability, you may be eligible for the Home of Your Own Mortgage program that offers low-interest loans with down payment assistance.
You’ll need to provide proof of your disability, or that of a family member who will be living with you, such as Supplemental Security Income or documentation from the State Department of Social Services or the Department of Developmental Services.
Check out the Home of Your Own Mortgage Program’s site for full details.
CHFA Homeownership for Residents of Public Housing
Public housing tenants saving up for a home can make use of this program designed to help those using housing assistance transition from renting to homeownership. If you qualify, you can use CHFA’s below-market interest rates to buy your first home and you’ll receive down payment assistance.
You’re eligible if you participate in rental assistance programs or you’re a tenant of rental housing supported by the CHFA, the U.S. Department of Housing and Urban Development or any local housing authorities.
CHFA Mobile/Manufactured Home Loan Program
If you’ve been eyeing a mobile home for your first home, this program can help you secure a loan at a low interest rate, low closing costs and with low monthly payments.
The program applies to any single- or double-wide manufactured home in a Connecticut state-licensed mobile park. Your eligibility depends on the availability of state funds that have been earmarked to help finance mobile home purchases.
You must be a first-time homebuyer or you must not have owned a home in the past three years. If you have, you can still qualify as long as you buy a mobile home from the targeted areas list.
The mobile home needs to be affixed to a permanent foundation with wheels, axels and hitches removed. It needs to be your primary address and your year-round home.
Take a look at the Mobile/Manufactured Home Loan Program details.
HDF SmartMove Connecticut
To help homebuyers come up with down payment funds, the HDF’s SmartMove program offers eligible homebuyers a 3 percent interest rate on a second mortgage for up to 20 percent of the purchase price of their home purchase.
Eligible homebuyers need to buy within the HDF’s service area and meet income limits. The HDF defines first-time homebuyers as anyone who is buying a home for the first time or who has not owned a home at any time in the last three years.
Borrowers must obtain their first mortgage from an HDF-approved lender, and they need to complete homebuyer education coursework along with one-on-one counseling with the HDF or a partner counseling agency.
Learn more about SmartMove Connecticut, including the full terms and conditions, list of approved lenders and how to apply.
HDF Live Where You Work
Live Where You Work is set up to help Connecticut homebuyers purchase their first home in the same town where they work. If you qualify, you can secure a 30-year, zero-interest loan of up to $20,000 to cover your down payment and closing costs.
The fine print? It comes with a loan fee and is only applicable to first-time homebuyers who can prove their home purchase is in the same town of their full-time employment.
Read more about this unique program.
Homebuyer Programs by Location in Connecticut
While the above statewide programs can give you a leg up on your journey to homeownership, local homebuyer assistance programs can help you out too.
The programs, for the most part, are exclusively for first-time homebuyers who are in financial need. Read on for our rundown of these programs.
First-time homebuyers in this charming city should look into the Fairfield Homeownership Assistance Program. If you qualify, the town covers 50 percent of your down payment cost up to a maximum of $30,000 through a no-interest loan. The loan doesn’t need to be repaid until you sell, refinance or transfer the property.
Fairfield also provides closing costs assistance of up to $2,500 to use for attorney fees, appraisals and any moving expenses. The funding is provided as a grant and doesn’t need to be repaid.
Fairfield defines a first-time homebuyer as anyone who hasn’t owned a home in the past three years. You’ll also need to be within the town’s annual income limits.
Check out the Fairfield Homeownership Assistance program’s full details and how to apply.
If your heart is set on buying a home in Hamden, you might be able to secure down payment funding of up to $5,000 in matched funds. It’s an interest-free loan with no monthly payments. Homeowners simply repay the funds upon sale or transfer of property.
The funding is earmarked for low- and moderate-income first-time homebuyers, so you’ll need to meet specific income guidelines to qualify.
Read more on the Town of Hamden’s website.
Want to find a home in Hartford? Connecticut’s capital city offers low- and moderate-income homebuyers with down payment assistance of up to 20 percent of their purchase price to a maximum of $40,000. That’s enough to cover your down payment altogether!
The funds are loaned as a second mortgage and are forgiven over a five- to 15-year period as long as you use the home as your primary residence. This program isn’t exclusive to first-time homebuyers. To qualify, you’ll need to fall within the city’s annual household income limits.
The full details can be found on the city of Hartford’s official website.
If you’re looking to buy a home in New Haven, this picturesque coastal city runs a program that provides first-time homebuyers who need financial assistance with funding to help cover their down payment and closing costs.
Low-income families who are eligible can receive up to 6 percent of their home’s purchase price, up to $10,000. It’s handed over in a zero-interest loan that’s forgiven at the rate of 20 percent per year. If you’re still living in the home at the five-year mark, your loan is fully forgiven.
The program’s full terms and conditions can be found on the city of New Haven’s official website.
Ready to Buy a Home in Connecticut?
Despite its smaller size, Connecticut has a thriving real estate market with a number of new home communities popping up across the state. If you’re not sure where to start, take a look at homes in Danbury or check out properties in New Haven close to the shore. Further inland, homebuyers can zero in on properties in Hartford.
And no matter where you’ve set your sights, you can rest assured that there are several programs that can potentially help you secure your home purchase.
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.
Carmen Chai is an award-winning Canadian journalist who has lived and reported from major cities such as Vancouver, Toronto, London and Paris. For NewHomeSource, Carmen covers a variety of topics, including insurance, mortgages, and more.