Connecticut first-time homebuyer assistance programs
Connecticut ranked ninth in Sharecare’s most recent Well-Being Index, a signal that living here translates to a higher quality of life compared to other states. If you’re ready to become a homeowner for the first time in this state, a good place to start is the Connecticut Housing Finance Authority (CHFA). The agency has been around since 1969, and since then, some 145,000 Connecticut residents have leveraged its programs to buy their first homes.
Connecticut first-time homebuyer loan programs
HFA Advantage and HFA Preferred loans
The Connecticut Housing Finance Authority (CHFA) offers both Fannie Mae HFA Preferred and Freddie Mac HFA Advantage mortgages, which are low-down payment conventional loans. These two programs are popular with first-time homebuyers in Connecticut because they come with below-market interest rates, no upfront mortgage costs and lower mortgage insurance costs if you’re making a down payment less than 20 percent.
To qualify, you can’t exceed the CHFA income and purchase price limits, which vary by city or town. You can check this CHFA resource map to see what the limits are where you plan to buy. Additional requirements include:
- Must be your first home or must not have owned a home in the last three years
- Must complete homebuyer education course
- Must be a single-family home, condominium, townhome or planned unit development (PUD); can be a two- to four-unit home for HFA Preferred loan
- Must be a primary residence
CHFA Conventional AMI Loan Program (CALP)
The CHFA’s Conventional Area Median Income Loan Program (CALP) offers loans to first-time homebuyers who can’t qualify for an HFA Advantage or HFA Preferred loan because their income is higher than 80 percent of the area median income (AMI). CALP comes with the same benefits as an HFA Advantage or HFA Preferred loan, and income and purchase price limits also apply. You’ll also be required to take a homebuyer education course to qualify.
The CHFA also has specialized home buying programs for certain types of borrowers. These include:
- CHFA Home of Your Own Program – First-time homebuyers who have a disability — or plan to live with a family member with a disability — could be eligible for a below-market rate loan through the CHFA. In addition to meeting income and purchase price limits, you must provide proof of the disability and attend a homebuyer education course in order to qualify.
- CHFA Public Housing Residents Program – First-time buyers who are currently rental housing tenants or in a rental assistance program could qualify for a reduced-interest rate mortgage. You must meet minimum credit, employment and income requirements to be eligible for the program.
- CHFA Military Homeownership Program – Available to first-time buyer veterans, current military members and surviving spouses, this CHFA program cuts an additional 0.125 percent off any already low-rate mortgage through the agency. You’ll need to meet income and purchase price limits and attend a homebuyer education course to qualify.
- CHFA Police Homeownership Program – First-time buyers who are police officers can also receive a 0.125 percent discount off a low-rate mortgage through the CHFA. You must be buying a home in one of 23 participating towns where you work, or, if you’re a state police officer, in any participating town. If your town isn’t a participant, the CHFA might still be able to help you qualify, so be sure to ask.
- CHFA Teachers Mortgage Assistance Program – First-time buyers who are teachers can get an additional 0.125 percent off a below-market rate loan through the CHFA. Minority teachers can get a steeper discount of 0.250 percent, and also other incentives if they graduated from a Hispanic-serving institution, historically Black college or a public high school within a state “educational reform district.” To qualify overall, you must be employed in a “priority school district,” a “State-Identified Subject Matter Shortage Area” or “Alliance District,” which are listed on the CHFA website. If employed in a priority district, the home you’re buying must be in that district as well, unless you’re a minority teacher.
- CHFA Mobile Manufactured Home Loan Program – Available to first-time and repeat buyers, this program allows manufactured and mobile home buyers to take advantage of lower closing costs and a low interest rate. There is a 20 percent down payment requirement. Along with meeting income and purchase price limits, you must meet mobile home guidelines set by the CHFA: the home is a primary, year-round residence in a state-licensed mobile home park and on a permanent foundation with no axles, hitches or wheels. In addition, you’ll need to sign a renewable annual lot lease agreement. There’s no income limit if you’re buying a mobile home in a designated “Targeted Area.”
Connecticut down payment assistance
CHFA Down Payment Assistance Program (DAP)
The CHFA Down Payment Assistance Program (DAP) for first-time homebuyers offers low-interest second mortgages up to $15,000 to be put towards a down payment or closing costs. For loans made in 2024, the interest rate is equal to the initial mortgage interest rate or 5 percent (with an APR ranging from 5.10 percent to 5.50 percent), whichever is less.
The down payment assistance can be paired with any CHFA loan, except for the Mobile Manufactured Home Loan. To be eligible, you must qualify for a CHFA first mortgage and attend a homebuyer education course. According to the CHFA, around 50 percent of borrowers working with the agency take advantage of the program.
Time to Own Forgivable Down Payment Assistance
For a limited time, CHFA is offering a forgivable, zero-interest loan with no monthly payments to offset the expense of a down payment and closing costs. The loan amount can be as high as $50,000 in designated areas.
Other Connecticut homebuyer assistance programs
Along with CHFA help, first-time homebuyer assistance might be available from the city or county in which you want to live. Check out your local department of housing to see if they offer any programs like this. A local mortgage lender or even real estate agent might have information as well.
SmartMove Connecticut
SmartMove Connecticut, a program offered by the nonprofit Housing Development Fund (HDF), offers low-interest loans (3 percent interest; APR of 3.42 to 4.74 percent) to help qualifying homebuyers. It’s a second mortgage that, when applied to down payments and closing costs, can result in borrowers having to put down as little as 1 percent of their dream home’s purchase price. You must meet income and purchase price limits, work with a participating lender, and complete homebuyer education.
Fairfield First Time Homebuyer Assistance Program
The city of Fairfield has a program funded by the Department of Housing and Urban Development. It can help eligible low-income buyers secure no-interest loans for down payment assistance up to $30,000 (due to be repaid only when you move or refinance) and grants up to $2,500 for closing costs..
Other Connecticut first-time homebuyer loans
Good Neighbor Next Door Program
A nationally-available program funded by the U.S. Department of Housing and Urban Development (HUD), the Good Neighbor Next Door program is available to law enforcement officers, teachers (pre-Kindergarten through 12th grade), firefighters and emergency medical technicians. The program lists eligible homes in revitalization areas exclusively to members of the community with these jobs to provide opportunities for them to find single family housing in the community where they work.
Also, look into nationally-available low- or no-down payment loan programs. These include FHA loans, VA loans and USDA loans, which have qualifying criteria that aren’t as strict compared to conventional loans.
- FHA loans: This government-ensured option works well for first-time homebuyers who don’t have money for a large down payment or much of a credit history. You only need 3.5 percent of the purchase price, and lenders allow a credit score of as low as 580 to qualify for an FHA mortgage, or even 500 (with a larger down payment).
- VA loans: For qualifying service members, veterans or eligible spouses, this mortgage guaranteed by the Department of Veteran Affairs doesn’t require a down payment or a minimum credit score.
- USDA loans: Like VA loans, there is no down payment required, and you may only need a credit score of 640 to qualify with USDA-approved lenders. USDA loans help first-time homebuyers purchase a home in designated rural areas in Mississippi. Check here to see if your property is eligible for this mortgage.
With any of these programs, you could be approved for a loan even if you have a lower credit score or can’t afford a higher down payment amount. For more information on these types of mortgages, go to Bankrate’s first-time homebuyer loans and programs guide.
Get started
Before you start looking for properties in Connecticut, check out the CHFA’s Resource Map to see if you can qualify for one of the authority’s low-interest loans and/or if your search includes a targeted area. Then, browse the CHFA’s list of nearly 70 approved mortgage lenders and banks. A lender can help you determine what programs you’d be eligible for and how much assistance you could receive.
Remember to follow the typical steps for the home buying process. Understand the local market. Hire an expert agent to help you navigate the homebuying process. And, don’t settle for the first lender offer you find. When buying a home, it pays to compare mortgage rates and look at terms from multiple lenders to lock in the best deal.
