New CHFA Total Debt-To-Income Ratio On HFA Loans

The Connecticut Housing Finance Authority (CHFA) has announced it will be increasing their Total Debt-To-Income Ratio on their CHFA HFA loan program.  The New CHFA Income Total Debt-To-Income Ratio On HFA Loans will match the new increased Fannie Mae Debt-To-Income (DTI) Ratio from 45% to 50%. 

CHFA does not always follow the insurer's DTI Ratios.  For example CHFA has a more restrictive Total Debt-To-Income Ratio for FHA insured loans, but in the case of their HFA Loan Program they have made an exception.  This change has both a positive and negative impact.  It is positive because it allows more borrowers to qualify for a mortgage.  But it also exposes borrowers to more risk, by allowing more of their income to go towards a mortgage payment.  This means less of the borrower's income will be available for other financial commitments.

The New CHFA Income Total Debt-To-Income Ratio On HFA Loans
will only be available to CHFA HFA mortgages without a down payment and closing cost (DAP) second loan.   DTI on CHFA mortgages with a DAP loan will sill be the same.

The Connecticut Housing Finance Authority (CHFA) is Connecticut’s Premier Mortgage Loan Program for “First Time Homebuyers”.  CHFA is a Quasi Government Agency that provides a 30-year fixed rate Mortgage Program, with an interest rate below comparable market rates.  CHFA is also a State Bonded Mortgage Programs, which means CHFA funds their loans through State and Federal funds.

As I  stated above the New CHFA Total Debt-To-Income Ratio On HFA Loans will create more opportunities for borrowers, but borrowers need to use common since in not going beyond their comfort level for a mortgage payment.