The Connecticut Housing Finance Authority/Rural Development USDA Mortgage is a combination of both a Connecticut Housing Finance Authority (CHFA) Mortgage and a Rural Development USDA Mortgage. What that means is that this Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut – CHFA/USDA is funded by CHFA, but insured by USDA. As a result this Loan Program has to meet the stricter of the two Loan Program Guidelines except for Downpayment and Monthly Mortgage Insurance (PMI).
Presently the basic CHFA Loan Program requires a 3.5% Downpayment because the basic Loan Program is FHA insured. CHFA does allow the Borrower to borrow the Downpayment under a separate second loan (DAP) making it a 100% financed Mortgage, on the other hand USDA does not require any Downpayment. Likewise the basic CHFA Mortgage which is FHA insured requires the Borrower to pay FHA Insurance (similar to PMI), but USDA does not require PMI on their Mortgages. Since the CHFA/USDA Loan Program is USDA insured, their Guidelines over rides the stricter CHFA/FHA Guidelines in both cases, making the USDA Loan Program a true 100% financed Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut and with no PMI. These are the only exceptions, in all other instances the stricter Guideline will be the one that will apply.
Some of the basic differences between CHFA and USDA Mortgages and that the stricter Guideline applies are:
CHFA Mortgages are available in all Connecticut City and Towns, USDA Mortgages are only available in the Cities and Towns on this “Map”. CHFA is for First Time Homebuyers, USDA is for all Homebuyers. CHFA has Sales Price Limits, USDA does not. Both Loan Programs have Income Limits. CHFA has higher Income Limits for households of up to three people, but USDA has higher Income Limits for households of four or more people. USDA allows the Upfront Funding Fee to be included in the Mortgage, CHFA does not because CHFA will not go beyond 100% Loan-To-Value on the first loan. If the Borrower needs to borrow the Upfront Funding Fee, they can do it on a second (DAP) loan, and also include the Closing Costs if they qualify. Also CHFA allows for higher Debt-To-Income Ratio’s then USDA.
Both CHFA and USDA are great Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut, and the combination of these two Loan Programs make them even better in many cases.
Properties that are eligible for CHFA/USDA Mortgages are:
- Existing homes
- Condominiums
- Townhouses
- New construction.
CHFA/USDA requires an FHA Appraisal, so FHA appraisal rules apply. However, FHA appraisal requirements have been relaxed, so many of the things that use to create a problem no longer apply like:
- Missing Handrails in some cases
- Cracked windows
- Dripping faucets
- Peeling paint on door frame/windows (only for houses built post 1978)
- Flat roof on garage, if it could not be inspected
- No smoke detectors • No GFI's in kitchen/bathrooms
- Termite inspections are only required if State Law requires them, or the Appraiser/Inspector sees active infestation.
If you are a First Time Homebuyer in Connecticut and are purchasing a house in one of eligible USDA Cities or Towns, a CHFA/USDA Mortgage maybe the perfect Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut, for you.
I have provided two links blew if you are interested in reading more detailed information on CHFA/FHA or USDA Mortgages.
Connecticut Housing Finance Authority (CHFA) Mortgages
Rural Development USDA Mortgage
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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George,
As usual great info. The CHFA loans sound like our Utah housing 100% financing loans, We also have rural housing loans but Salt Lake County doesn't qualify, there are several areas surrounding Salt Lake county that do. I love it when my clients can take advantage of some great programs that are still available.