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Connecticut Housing Finance Authority (CHFA) FHA 203K Loan Program ........... Guidelines

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

Yesterday I started the series of blogs that I will be doing on the new  Connecticut Housing Finance Authority (CHFA) FHA 203K Loan Program with an introduction blog to the program.  Today I will go into some of the guidelines that a Borrower, and property will have to meet in order to qualify for a components of the  Connecticut Housing Finance Authority (CHFA) FHA 203K Loan. 

The main Guidelines and features of the new Connecticut Housing Finance Authority (CHFA) FHA 203K Loan Program are:

  • Owner Occupied Single Family Houses and Owner Occupied FHA Approved Condominiums Only.
  • First Time Home Buyer or previous Home Owner who presently does not own another property and is purchasing in a CHFA identified Targeted Area.
  • Max/Min Loan Amount - The lower of the Sales Price plus rehab or 110% of after improved value (100% if property is a Condo) is used to calculate the Loan-To-Value.
  • CHFA Income Limits Apply
  • CHFA Property Limits Apply
  • Minimum FICO Score 640
  • Rate Lock 120 Days
  • Interest Rate Will Be CHFA Rate
  • Max Total Debt To Income Ratio 45%
  • Downpayment 3.5%
  • DAP Loans are available.
  • Rehab Period - The work must begin within 30 days of closing. The work must not cease prior to completion for more than 30 consecutive days. The work must be completed within 4 months of the closing.
  • Minimum Rehab - $5,000 of repairs or renovation on the existing structure is required.  All Health, safety and energy conservation items must be addressed prior to completing general home improvements. Minor or cosmetic repairs by themselves are not acceptable, but they may be added to the minimum requirement.
  • Eligible Expenses:
    • Materials
    • Labor
    • Inspection fees
    • Building Permits
    • Licenses
    • Architectural/Engineering Fees.
    • Supplement Origination Fee
    • Title Update
    • Contingency reserve
  • Contingency Reserve - On properties older than 30 years and over $7500 in rehabilitation costs, a 10% minimum reserve of the cost of rehabilitation is required. A 20% contingency reserve is allowed where major remodeling is contemplated. If utilities were not turned on for inspection, a minimum 15% is required.  Unused contingency reserves will be applied to the reduction of the Principle Loan Amount.
  • Release of Funds (Draws) -  A maximum of 5 draws are allowed.  Draw amounts can vary and are based on the cost of the work performed.  A 10% reserve is held back on each draw.  The holdback funds are disbursed upon completion of all work along with the final disbursement.

There is more to the The new Connecticut Housing Finance Authority (CHFA) FHA 203K Loan Program, but this covers the main features of the program.  In the next blog in this series I will cover some of the maian steps that are involved in the process of this loan product.

 

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Who To Call For Your Mortgage Needs In Connecticut:

George Souto NMLS# 65149 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   gsouto@mccuemortgage.com, or visit my McCue Mortgage Homepage.

Posted by

George Souto
NMLS# 65149

C (860) 573-1308
CALL 7 Days/Wk
Fax (860) 760-6891

Email Me
About Me
My Blog

I am a Mortgage Loan Officer who can assist you with all your mortgage & refinancing needs in
CT, and RI

I can assist you with your Conventional,
FHA, CHFA, VA, USDA, & 203K loan programs.

I reside in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Haddam. E. Haddam, Higganum, Chester, Essex, Deep River.

 

Comments (4)

Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Staying on your game I see! Happy 4th!

Jul 01, 2011 04:59 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Laura and Carole, Happy 4th of July to you also.

Jul 01, 2011 05:18 PM
Nick T Pappas
Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, the Connecticut Housing Finance Authority (CHFA) FHA 203K Loan Program  definitely looks like it's desigend to get properties moving.  I'm sure agents in your area are glad to have you and Mcue Mortgage well versed in the new loan program.

Jul 02, 2011 11:54 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Tagid we have to in this business if we want to provide the best service we can to our clients and business partners.

Nick it is a much needed product, especially with all the bank owned properties that are coming on the market that need a little tender loving care.

Jul 03, 2011 07:32 AM