A new state program launched earlier this month will provide down payment assistance to low- and moderate-income homebuyers in Connecticut.
The program, called Time to Own, provides funds for down payment and closing costs to prospective homebuyers applying to the Connecticut Housing Finance Authority’s First-Time Homebuyer Program. It is being funded with $20 million that was allocated for homebuyer assistance by the State Bond Commission in December, according to a statement from Gov. Ned Lamont’s office.
CHFA is administering the program on behalf of the Connecticut Department of Housing.
“We all know one of the greatest obstacles to homeownership is having a down payment and covering closing costs,” Lamont said in the statement. “This program breaks new ground, offering homebuyers the opportunity to secure their first home with help of an innovative, forgivable loan program. It will bring the dream of homeownership to life for thousands of Connecticut residents.”
The Time to Own program is available to eligible homebuyers applying to a CHFA first mortgage loan for their first home, the statement said. CHFA already has other down payment assistance programs, and borrowers can apply for those programs in addition to Time to Own.
The Time to Own loan is structured as a 10-year, 0 percent non-amortizing loan, with one-tenth of the principal amount forgiven on the anniversary of the loan closing each year until the loan is fully forgiven, the statement said. The loan is based on several eligibility requirements, including the borrower’s financial needs, their ability to repay their mortgage obligations and their eligibility under CHFA’s First-Time Homebuyer Program, which is open to new home buyers or those who have not owned a home in the last three years.
The program is open to any borrower who can demonstrate residency in Connecticut for the past three years.
Applicants seeking to buy homes in higher-resourced communities, where home prices are often out of reach for new homebuyers, could receive added financial assistance, the statement said. These higher-resourced communities, referred to as Higher Opportunity Areas, are evaluated based on school performance, access to job opportunities, and other community resources, the statement said.
If a property is in a high or very high opportunity area, the borrower could be eligible for up to $50,000 in assistance. For any other property, the loan amount could go up to $25,000.
“Time to Own puts greater purchasing power in the hands of prospective homebuyers,” Nandini Natarajan, CEO and executive director of CHFA, said in the statement. “The program not only arms them with the means to purchase their first home, but it also gives them greater choice about where they and their families will grow and thrive.”
Banks participating in the program include Chelsea Groton Bank, Liberty Bank, M&T Bank, Thomaston Savings Bank and Webster Bank. Mortgage companies participating include First World Mortgage Corp., Guaranteed Rate, Homestead Funding Corp., Norcom Mortgage, Prosperity Home Mortgage, Total Mortgage Services and William Raveis Mortgage.