You asked us to describe the Massachusetts Homefront Financial Security Loan Program and indicate whether Connecticut has a similar program.

The Homefront Financial Security Loan program provides low interest (3%) loans to Massachusetts National Guard members and resident reservists called to active duty in response to the September 11 terrorist attacks. The program, which began on November 26, 2001, is a joint effort between the State Treasurer's Office and four banks-Citizens, Eastern, Sovereign, and Salem Five Cents Savings. (It is modeled after an Illinois program called Operation Protect and Provide. )

Connecticut does not have a similar program, but under its Military Homeownership Program, Connecticut Housing Finance Authority provides low-interest, 30-year mortgage loans (rates change weekly) to full-time enlisted military personnel serving in any branch of the U. S. Armed Forces. The household income limits for the program are $ 62,800 for one- and two-person households and $ 72,200 for other households. Also, the law requires the state to maintain the pay and health benefits of state employees called to active service in the federal or any state's armed forces for domestic or overseas military or emergency operations arising from the September 11 attacks (SA 01-1, November 13 Special Session).

Under the Massachusetts program:

1. Any Massachusetts National Guard member or resident reservist called to active duty in response to the September 11 terrorist attacks may make one application to a participating bank for a loan of up to $ 10,000, at 3% interest. The loans are available on a first come, first served basis.

2. The loan period is limited to the terms of the qualified borrower's "call up letter" and any extensions, plus two years.

3. All interest on the loan is deferred while the borrower is on active duty.

4. After completing active duty service, the borrower must start making monthly repayments in amounts that will enable repayment of the loan and accrued interest in two years.

To fund the program, the treasurer provides each participating bank with deposits equal to two and one-half times the amount of low-interest loans that the bank makes under the program (e. g. , if a bank makes $ 500,000 in loans, it will receive $ 1. 25 million in deposits). The bank may use the deposits over and above the amount it lends to reservists and National Guard members to make traditional loans at its normal interest rates. The amount of state deposits is capped at $ 25 million, meaning that $ 10 million is available for loans to reservists and guard members. The state earns 2. 85% on its deposits.

VR: eh