Sec. 8-286a. State or authority to share in appreciation of dwelling.
Sec. 8-286f. Small multifamily lending program. Lending guidelines.
Sec. 8-289. Adoption of regulations or written procedures.
Sec. 8-286. Homeownership loan program. Lending guidelines and terms of loans. Residential mortgage guarantee program. (a) The authority shall administer, within the resources allocated by the State Bond Commission to the Department of Housing for the purposes of sections 8-283 to 8-289, inclusive, the homeownership loan program established by said sections 8-283 to 8-289. The purpose of the program shall be to provide, through a contract, an eligible family or person based on the financial needs of such family or person, a loan, which loan may be amortizing, deferred or forgivable as to principal or interest, to assist in the purchase of a dwelling or the purchase and rehabilitation of a dwelling containing up to four residential units, provided such family or person shall reside in at least one of such units.
(b) (1) Not later than October 1, 2021, the authority shall establish guidelines for issuing loans under the program. Such guidelines shall permit the authority to (A) provide loans to borrowers with a debt-to-income ratio equal to the highest debt-to-income ratio permitted by the Federal Housing Administration, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation for residential mortgage loans, as applicable, subject to any other limitations of this chapter, and (B) consider (i) the application of a prospective borrower, regardless of the prospective borrower's credit score, and (ii) nontraditional credit references submitted by the prospective borrower including, but not limited to, proof of employment or proof of rental and utility payments.
(2) If the dwelling being purchased by an eligible applicant under the program is situated within an affordability incentive zone, established pursuant to section 8-286e, the authority may utilize lending guidelines that are different from the guidelines utilized for the purchase of a dwelling that is not situated within an affordability incentive zone, which alternative lending guidelines may include, but need not be limited to, increased eligibility limits with respect to the purchase price of the dwelling or the maximum loan amount or a reduced interest rate for such loan.
(c) Any loan issued under the program shall include the customary and reasonable closing costs of the purchase of the dwelling, if so requested by the borrower, and to the extent the loan amount inclusive of such closing costs does not exceed the maximum loan amount under the authority's procedures and guidelines, and shall not exceed twenty-five per cent of the cost of acquiring such dwelling or twenty-five per cent of the value of such dwelling after rehabilitation, if greater; except that no such limitation may apply to any loan made to a tenant whose dwelling unit is being converted to a condominium and who is able to obtain a mortgage for the purchase of such dwelling unit. Such value shall be determined from the appraisal, if any, required by the lending institution granting the first mortgage loan on such dwelling, and if no such appraisal has been made at the time that a contract for loan is entered into pursuant to this chapter, the authority shall cause such appraisal to be made.
(d) Commencing October 1, 1995, the proceeds of the sale of any bonds of the state authorized by any public or special act effective on or after July 1, 1995, that are to be used for the purpose of making loans pursuant to this chapter shall be used by the department to make grants-in-aid to the authority and used by the authority, subject to the purposes and conditions of this chapter, for the purpose of making loans pursuant to this chapter.
(e) The commissioner shall establish and administer within available funds a residential mortgage guarantee program for eligible persons purchasing a home for owner occupancy. Real property eligible for the program shall be located in public investment communities, as defined in section 7-545, and may contain one to three dwelling units.
(P.A. 77-612, S. 4; P.A. 80-396, S. 2, 5; P.A. 92-166, S. 21, 31; P.A. 95-202, S. 1; 95-250, S. 28, 42; 95-309, S. 11, 12; P.A. 13-234, S. 2; P.A. 21-101, S. 1; P.A. 22-94, S. 18; P.A. 23-45, S. 5.)
History: P.A. 80-396 amended Subsec. (b) to exclude 25% loan limit in cases where tenant is purchasing his dwelling unit upon its conversion to a condominium; P.A. 92-166 amended Subsec. (a) to make deferred loans a form of financial assistance available under the section and providing that payments on interest are due immediately but that payments on principal may be made at a later time and amended Subsec. (b) to make technical changes consistent with the changes in Subsec. (a); P.A. 95-202 added new Subsec., designated as Subsec. (d) by the Revisors because of changes enacted in P.A. 95-250, re establishment of residential mortgage guarantee program; P.A. 95-250 amended Subsec. (a) to transfer program from Housing Department to the Connecticut Housing Finance Authority and added Subsec. (c) re use of the proceeds of bonds by the authority; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section; pursuant to P.A. 13-234, reference to Department of Economic and Community Development was changed editorially by the Revisors to reference to Department of Housing in Subsec. (a), effective June 19, 2013; P.A. 21-101 added new Subsec. (b) re guidelines for issuing loans under the program, redesignated existing Subsec. (b) as Subsec. (c) and amended same by adding provision re inclusion of customary and reasonable closing costs and redesignated existing Subsecs. (c) and (d) as Subsecs. (d) and (e), effective June 30, 2021; P.A. 22-94 made a technical change in Subsec. (b); P.A. 23-45 amended Subsec. (a) by making a technical change, replacing “or deferred loan” with provision re loan may be amortizing, deferred or forgivable and by deleting provision re payments on deferred loans, amended Subsec. (b) by redesignating existing Subsec. (b) as new Subsec. (b)(1), redesignating existing Subsecs. (b)(1) and (b)(2) as Subsecs. (b)(1)(A) and (b)(1)(B), redesignating existing Subsecs. (b)(2)(A) and (b)(2)(B) as Subsecs. (b)(1)(B)(i) and (b)(1)(B)(ii), adding new Subdiv. (2) re different lending guidelines may be utilized if dwelling is in affordability incentive zone, amended Subsec. (c) by replacing “A loan” with “Any loan” and deleting “or deferred loan” and amended Subsec. (d) by deleting “or deferred loans”.
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Sec. 8-286a. State or authority to share in appreciation of dwelling. Any contract for a loan to purchase a dwelling under section 8-286 may require that the state or the authority shall receive, in exchange for any such loan, a share in the appreciation of the dwelling or any interest therein upon its sale. Such share shall be in an amount determined by the authority.
(P.A. 91-346, S. 4, 9; P.A. 95-250, S. 29, 42; 95-309, S. 11, 12; P.A. 23-45, S. 6.)
History: P.A. 95-250 added provision giving the authority a share in the appreciation of a dwelling and replaced a reference to Housing Commissioner with reference to authority; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section; P.A. 23-45 made a technical change.
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Sec. 8-286f. Small multifamily lending program. Lending guidelines. (a) Notwithstanding any provision of chapter 134, the Connecticut Housing Finance Authority shall, within the resources allocated by the State Bond Commission to the Department of Housing, establish a small multifamily lending program to provide a revolving loan fund, which fund shall be available to community development financial institutions established under 12 CFR Part 1805, as amended from time to time, and other comparable institutions deemed eligible by the authority, to provide acquisition, construction, rehabilitation and permanent financing for small multifamily properties with not fewer than two and not more than twenty units, except that properties with more than twenty units may be deemed eligible by the authority in order to accomplish the objectives of the program.
(b) Not later than January 1, 2024, the Connecticut Housing Finance Authority shall establish guidelines for issuing loans under the program established pursuant to subsection (a) of this section. Such guidelines shall provide that:
(1) Loans issued under such program shall be utilized to provide acquisition, construction, rehabilitation or permanent financing to (A) increase the affordable housing stock in higher income communities, including housing which would qualify for housing unit equivalent points pursuant to section 8-30g, (B) restore vacant and blighted properties or properties in need of rehabilitation to performing properties, or (C) assist revitalization efforts in low and moderate-income communities; and
(2) If the property being purchased by an eligible applicant under such program is situated within an affordability incentive zone established pursuant to section 8-286e, the authority may utilize lending guidelines that are different from the guidelines utilized for the financing of a property that is not situated within an affordability incentive zone, which alternative lending guidelines may include, but need not be limited to, increased eligibility limits with respect to the purchase price of the property or the maximum loan amount or a reduced interest rate for such loan.
(P.A. 23-45, S. 9.)
History: P.A. 23-45 effective July 1, 2023.
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Sec. 8-287. Loan repayment. (a) Any loan contracted for pursuant to this chapter shall be secured by a subordinate mortgage on the dwelling purchased by the recipient of such loan. If the recipient of such loan assigns, transfers or otherwise conveys his interest in such dwelling or ceases to occupy such dwelling, the unpaid principal balance of said mortgage, together with interest thereon, shall become due and payable. If the recipient of any loan is unable to repay the loan, the authority or the commissioner, for loans made under this chapter prior to October 1, 1995, and the authority for loans acquired from the state or made after October 1, 1995, at the discretion of the authority or the commissioner, as the case may be, may adjust the interest rate, terms and conditions of the loan to facilitate repayment.
(b) Repayment of any loan provided in accordance with this chapter shall be subject to an interest rate to be determined in accordance with subsection (t) of section 3-20 and such terms and conditions as the commissioner or the authority may establish, including, but not limited to, any interest rate, terms of repayment or conditions for forgiveness of the principal or interest of any such loan. The authority, in its discretion, (1) may approve repayment of a loan for a term to be established by the authority in its discretion or, in the case of a first mortgage that is a graduated payment mortgage, for a term of no more than thirty years or (2) may require the loan be due and payable upon assignment, transfer, sale or other conveyance of the property. Payments by homeowners who have received financial assistance under this chapter prior to October 1, 1995, shall be paid to the State Treasurer and deposited in the General Fund of the state. Payments by homeowners who have received financial assistance under this chapter after October 1, 1995, shall be paid to the authority, deposited in such funds or accounts as the authority may establish from time to time for such purpose and used by the authority to make additional loans pursuant to this chapter unless the Secretary of the Office of Policy and Management directs such payments to be paid to the State Treasurer and deposited in the General Fund.
(P.A. 77-612, S. 5; P.A. 83-259, S. 1, 2; P.A. 87-416, S. 9, 24; P.A. 91-346, S. 3, 9; P.A. 92-166, S. 22, 31; P.A. 95-250, S. 30, 42; 95-309, S. 11, 12; P.A. 23-45, S. 7.)
History: P.A. 83-259 allowed for longer term for second mortgage in the case of graduated payment mortgage loans; P.A. 87-416 provided that the interest rates on loans would be determined in accordance with Sec. 3-20(t); P.A. 91-346 amended Subsec. (b) by deleting provisions re the term of the loan and in lieu thereof gave the commissioner discretion in setting repayment term; P.A. 92-166 made technical change adding provisions re deferred loans, consistent with 1992 public acts; P.A. 95-250 amended Subsecs. (a) and (b) to add provisions re loans made by the authority after October 1, 1995; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section; P.A. 23-45 amended Subsec. (a) by deleting references to “or deferred loan” and “or deferred loans”, replacing reference to “second mortgage” with “subordinate mortgage”, inserting “acquired from the state or”, and making technical and conforming changes, and amended Subsec. (b) by deleting “or deferred loan”, adding provision re terms and conditions of repayment may include interest rate, terms of repayment or conditions for forgiveness, replaced “that is concurrent with the first mortgage” with “to be established by the authority in its discretion”, and replacing requirement that certain payments be deposited in General Fund except that with approval payments may be used to make additional loans with requirement that certain payments be used to make additional loans unless Secretary of the Office of Policy and Management directs such payments to be deposited in General Fund.
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Sec. 8-289. Adoption of regulations or written procedures. The commissioner may adopt regulations providing for financial qualifications of eligible families or persons, requirements and limitations as to adjustments of terms and conditions of repayment, funding priorities, guarantee conditions and any additional requirements as the commissioner deems necessary to carry out the purposes of this chapter for loans made under this chapter prior to October 1, 1995. The authority shall adopt written procedures under section 1-121 for such purposes for loans made after October 1, 1995.
(P.A. 77-612, S. 7; P.A. 95-202, S. 5; 95-250, S. 31, 42; 95-309, S. 11, 12; P.A. 23-45, S. 8.)
History: P.A. 95-202 required commissioner to adopt regulations re guarantee conditions for loans or deferred loans made prior to October 1, 1995; P.A. 95-250 added provision re adoption of written procedures by the authority for loans or deferred loans made after October 1, 1995; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section; P.A. 23-45 replaced “commissioner shall” with “commissioner may”, made a technical change and deleted references to “or deferred loans”.
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