CT HOMEBUYERS-NEW FHA LIMITS-Mean Bigger CHFA LOANS

There is a lot of confusion with today's consumer regarding 1st time Homebuyer products.  Most lenders either do not offer the Connecticut Housing Finance Authority's program because they are not direct lenders or because they do not service the mortgage asset and subsequently do not get paid a sizeable commission.  The results have been disatrious as many borrower's have been put into mortgage programs that adjust higher.  The mortgage lender was more concerned with making a commission than they were with providing their borrower with a low fixed rate mortgage that could be a reliable part of a monthly budget.

CHFA and FHA are not the same, but most CHFA mortgage are insured by the Federal Government.  The Federal Housing Authority (FHA) has done its part to help to stimulate the softening housing market by increasing their limits across the country.  This will allow buyers the ability to purchase owner occupied homes with a secured fixed rate, with little or no money down and with less than perfect credit.  The Connecticut program (CHFA) is argueably the best run state bond program in the country.  The biggest advantage to CHFA is that it allows for 0 money down and the ability to finance closing costs.  The buyer is given an interest rate that is typically between 1/2 to 3/4 of a point below Conventional or FHA rates.  The problem in the recent past has been that CHFA was unwilling to fund loans that exceeded the FHA or VA (Veterans Adminstration) loan limits.  Many communities in Connecticut had a huge gap bewteen FHA's limits and CHFA's limits.  In some cases this gap was $350,000.00

This gap has no been closed to zero in all but a few cases!

Great websites to access both CHFA's purchase price limits and FHA's new enhances loan limits are www.chfa.org and www.hud.gov

The Connecticut Housing Authority also has income limits as well as purchase price limits.  In targeted zones, the income limits are waived (you can make as much as you like) as long as you can put 3% down.  The combination of CHFA/FHA also allows the seller's to pay up to 6% of the closing costs meaning that the customer only needs the 3% which can be a gift!

Many homes will not be purchased simply because customers, realtors and mortgage professionals do not know what programs are out there.  Let's educate our buyers and do more business.