Mortgage

Connecticut First Time House Patrons: Applications and Grants for 2021

Things to Know About Buying a Home in Connecticut

Being a first-time home buyer in Connecticut could feel like an uphill battle as home prices rise more than 20% between mid-2020 and mid-2021. But do not despair!

Connecticut has special low-cost mortgages for first-time buyers. And you may be able to get financial help to bridge the gap between your savings and your down payment needs.

All in all, buying your first home could be cheaper than you imagined.

Check your eligibility to buy a home in CT. Start here (11/24/2021)

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Connecticut Home Buyer Summary

In early October 2021, the average Connecticut list price was $ 349,950, according to Redfin. But in some desirable cities, prices can be astronomical. In Greenwich, the average list price at the time was over $ 2 million.

Meanwhile, the prices for single-family homes in the constitutional state rose by 20.5% on June 30, 2021, according to a report by the Federal Housing Finance Agency.

All of these can be difficult for a first-time Connecticut home buyer. But take a heart Because you can find good news below.

Connecticut Home Buyer Summary

Average home sale price in CT
$ 349,950

Minimum deposit in CT (3%)
$ 10,500

20% deposit in CT
$ 69,990

Average credit score in CT1
723

Maximum CT Grant for Homebuyers2
Up to $ 40,000 + as a forgivable loan in Bridgeport

Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a traditional mortgage with a minimum credit of 620.

If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not require a down payment at all.

Check your eligibility to buy a home in CT. Start here (11/24/2021)

Initial Loans for Connecticut Home Buyers

First time home buyers in the state of Connecticut with a 20% down payment can obtain a conventional loan at a low interest rate. And you never have to pay for personal mortgage insurance (PMI).

Of course, only a few first-time buyers have saved enough for 20 percent. But the good news is you don't need that much. By far not.

Borrowers can often move into a new home at as little as 3% or even 0% using one of these low down payment mortgage programs:

Conventional 97 – From Freddie Mac or Fannie Mae. 3% deposit and a minimum of 620 credits. You can usually stop paying mortgage insurance after a few yearsFHA loan – Supported by the Federal Housing Administration. Down 3.5% and a credit score of at least 580. But you're usually on the hook for mortgage insurance until you refinance, move to another type of mortgage, or pay off your loanVA loan – For veterans, active service members, reservists and the National Guard only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available. So apply when you are eligibleUSDA loan – For people with low to middle income who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but are often 640. Low mortgage insurance ratesConnecticut Housing Finance Authority – May include competitive mortgage rates and can be used with down payment assistance. More information below

Note that most of these programs require you to purchase a primary residence. This is a home that you will live in full time, not a vacation home or investment.

However, depending on the type of loan you choose, you may be able to move into your new home with minimal cash.

With these programs, you can even use free cash or Down Payment Assistance (DPA) to help cover down payment and closing costs.

If you are unsure which program to choose for your first mortgage loan, your lender can help you find the right deal based on your finances and your home purchase goals.

Find the best first-time buyer loan for you (11/24/2021)

CT programs for first time home buyers

The Connecticut Housing Finance Authority (CHFA) ​​offers two main home loan options, but there are others for those with special needs. The two big ones are:

HFA Advantage and HFA Preferred Mortgage Programs – Offer lower than usual mortgage insurance premiums, which can reduce your monthly paymentsHome Buyer Mortgage Program – Interest rates below the market and access to down payment aids. If you can afford monthly mortgage payments but need help with the costs of buying a home, this first time home buyer program might be for you

Both are primarily available to first-time Connecticut home buyers, including those who have not owned a home in the past three years. However, someone buying in a specific area may ask for help even if they are not a first-time buyer.

As is common with these programs, there are caps on both the maximum selling price of the home and the household income of the borrowers. But the CHFA resource map shows you what those numbers are for the place where you want to buy.

In addition, you must complete a homebuyer training course and use one of the CHFA approved lenders to qualify for any of these mortgages.

CT grants for first time home buyers

The CHFA Down Payment Assistance Program does not offer any grants. Instead, eligible applicants can get loans with an interest rate of only 1% (valid until at least 31.12.21). These must be repaid in parallel with your mortgage. So expect to have to prove that you can comfortably afford both monthly payments.

CHFA allows you to borrow up to USD 20,000 for your deposit. However, your loan amount must not exceed the down payment required for your loan program: 3-3.5% of the purchase price, depending on which mortgage you are using.

Would you like to know more? Contact a local CHFA approved lender or call the CHFA Family Department at (860) 571-3502. The email address is sfaminquiry@chfa.org.

Also, don't think that the CHFA is the only down payment aid in town.

Below is a list of organizations serving first-time home buyers in specific Connecticut cities and counties. And be sure to check out everyone serving your area. Because they may have a deposit assistance program that suits you better than the nationwide option.

Check your eligibility to buy a home in CT. Start here (11/24/2021)

Buy a home in major Connecticut cities

Median home prices in Connecticut's largest cities vary enormously. Stamford was by far the most expensive of the big three. But home price inflation in the 12 months to August 2021 was much lower than the other two.

New Haven had by far the highest rise in average list prices during this period, beating the national average.

The good news for a first-time Connecticut home buyer is that each of these cities has their own down payment assistance loans, two of which are forgivable. Provided you qualify and stay in your next home long enough, you can get some free cash to cover your down payment and closing costs.

Bridgeport first-time home buyers

The average list price in Bridgeport was $ 299,900 as of August 2021, according to Realtor.com. That was 11.1% more than in the previous year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 9,000 for 3% deposit$ 59,980 for 20% deposit

The city of Bridgeport has a good down payment program. In fact, the worst part about it is the 48-page guide (PDF) that you have to wade through to get some basic information.

The program "helps low- and middle-income homebuyers" by providing them with a forgivable loan to help cover their down payment and closing costs. And because the loan is forgivable, you don't make any monthly payments.

If you borrow less than $ 15,000 in this manner, the loan will be completely waived after five years – after that time, you no longer owe anything on that loan. But the more you borrow, the longer you have to wait for forgiveness: 10 years for $ 15,000 to $ 40,000 and 15 years for more than $ 40,000.

Note that if you sell, refinance, or move the loan, you will need to repay all or part of the loan before it is expired.

If this guide is too much legal language for you, contact the Bridgeport Department of Housing and Community Development at (203) 576-8144 or email hcd@bridgeportct.gov for advice.

First time home buyer in Stamford

The average list price in Stamford was $ 619,000 as of August 2021, according to Realtor.com. That was 6.9% more than in the previous year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 18,570 for 3% deposit$ 123,800 for 20% deposit

The city's Stamford HOME program is administered by Housing Development Fund, Inc. (HDF) and eligible applicants can receive an interest-free loan of up to $ 20,000 for their down payment and closing costs.

However, you will have to repay this in full if you sell the house, refinance your (first) main mortgage, transfer ownership, or pay off the main mortgage. The website says:

“To be eligible for HOME funds, the total household income must not exceed 65% of the median income of the region, adjusted for the family size. All buyers must meet the requirements of the HDF home ownership advisory program. There is a $ 2,000 fee for this loan payable to HDF upon completion. "

There is hardly any other information. However, you can contact HDF using an online contact form on the website.

First time home buyer in New Haven

The average list price in New Haven was $ 295,000 as of August 2021, according to Realtor.com. That was 22.9% more than in the previous year.

If you want to buy a home at this average price, your down payment options can be between the following options:

$ 8,850 for 3% deposit$ 59,000 for 20% deposit

The City of New Haven has a decent down payment assistance program. You can borrow up to 6% of the purchase price of a home, up to a maximum of $ 10,000.

It's an interest-free loan with no monthly payments. And it is given out at a rate of 20% every year. At the end of year 5, you don't owe anything. If you move, sell, or refinance beforehand, you will have to repay the unspent portion of the loan.

Would you like to know more? Email to DGolia@newhavenct.gov

Where to Find Home Buying Help in Connecticut

All of the organizations listed above should provide free advice to any first-time home buyer in or near the Connecticut area.

In addition to our selections, the US Department of Housing and Urban Development (HUD) provides lists of statewide, regional, and local resources:

Nationwide and regional resources for first time home buyers in CT:

Programs by City / City in Connecticut:

What are Connecticut mortgage rates today?

View Connecticut's current mortgage rates here.

When you're ready to start buying your home, make sure to get personalized rate quotes from at least three mortgage lenders.

Don't just look at the advertised prices online; Indeed, apply for pre-approval and compare the interest rates and fees that are offered to you. This is the only way you can be sure that you are getting the best possible offer for your new home loan.

Confirm your new plan (November 24, 2021)

1 Source: Experian.com 2021 study on 2020 data

2Based on a review of available state DPA grants at the time of this writing

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