You asked (1) how fees are set up for building permits, certificates of occupancy, and other similar fees charged by municipalities for building code related approvals; (2) for a list of state programs available to moderate-income families seeking homeownership, including down payment assistance; and (3) if municipalities can construct and renovate moderate-income housing and help moderate-income people purchase homes, including through housing trust funds.

SUMMARY

There is no uniform standard for setting building-related fees. Rather, the state building-code requires each municipality to adopt a fee schedule for each construction document review, building permit, certificate of approval, and certificate of occupancy. As a result, fees and the processes for establishing them vary by municipality.

The state offers several programs to assist moderate-income people to buy homes. The Connecticut Housing Finance Authority (CHFA), a quasi-public agency, has two homeownership programs in particular and a down payment assistance loan program (DAP) to help moderate-income people buy homes. The Department of Economic and Community Development (DECD) is finalizing a down payment assistance grant program, which will assist moderate-income people to purchase homes. DECD also administers the state's Housing Trust Fund (HTF) program (with the goal to create homeownership opportunities for low- and moderate-income people).

State law allows municipalities to establish housing authorities and specifies their powers and duties, including regarding construction and renovation of moderate-income housing. The law also allows municipalities to use housing trust funds to encourage homeownership.

BUILDING-RELATED FEES

The fees, and processes for establishing them, for building permits, certificates of occupancy, or other building code-related approvals are not set by statute. By law, all municipalities must comply with the state building code (CGS § 29-253). The code (International Residential Code § R108. 2 (2003)) requires each municipality to adopt a fee schedule.

An unscientific online survey of building permit and related fees in seven municipalities (Bethel, Bristol, Enfield, Mansfield, New London, Newtown, and Stamford) shows that they vary in at least two respects. Bristol and Stamford base building permit fees on a project's square feet (40 cents and $ 150, respectively). The other municipalities in the survey base the fee on the value of the work. The fees range from $ 10 per $ 1,000 of value in Enfield to $ 30 for the first $ 1,000 of value and $ 11 for each additional $ 1,000 in Newtown.

Certificate of occupancy fees range from $ 10 in Enfield to $ 15 and $ 25 for residential and commercial projects, respectively, in Bristol. Windham's fee is $ 5 per 1,000 square feet of construction.

MODERATE-INCOME HOMEOWNERHIP PROGRAMS

We identified two moderate-income homeownership programs, two down payment assistance programs, and the state Housing Trust Fund as programs that assist moderate-income families to purchase homes.

CHFA Programs

CHFA provides mortgages to first-time homebuyers with low- or moderate-incomes who purchase within CHFA sale price limits through their First-time Homebuyer Mortgages and the Rehabilitation Mortgage Loan programs.

CHFA's Down payment Assistance Program (DAP) provides homeownership opportunities to low- and moderate-income people who are unable to provide their own down payments. Applicants may also be eligible to borrow funds to pay their closing costs. A DAP loan can only be used in conjunction with a CHFA first mortgage, according to CHFA's website.

First-time Homebuyer Mortgages. Homebuyer Mortgages are 30-year, fixed-rate loans, with an interest rate below comparable market rates (interest rates change weekly – through August 10, 2006, the rate is 5. 875 % with APR ranging 5. 975 - 6. 375 %, according to CHFA's website). Funds are available year-round on a continuous basis. Over 80 participating lenders (banks and mortgage companies statewide) originate and service the mortgages, according to CHFA's website. Click here for the list of lenders.

Homebuyer Mortgages are available to (1) first time homebuyers with low- or moderate- incomes who are buying moderately priced homes within CHFA sales price limits or (2) people who have not had an ownership interest in a home for the previous three years. Prior homeowners may qualify for a mortgage if the home they purchase is within a targeted area. Household income limits, which vary by municipality, apply to all borrowers. However, in targeted areas, households over the income limits may apply for CHFA financing. Click the following links for income limits and targeted areas.

The Homebuyer Mortgage loan may be used to purchase an existing
one- to four-family home, a newly constructed single family home, or
a newly constructed two-family home in a targeted area. Eligible condominiums and qualified mobile homes may also be financed.

Rehabilitation Mortgage Loan. Rehabilitation Mortgage Loans may be used to purchase or refinance a home in need of repair. At this time, these loans are only available through one lending institution, which originates loans in Windham, Tolland, and New London counties, according to CHFA's website.

In the case of a home purchase, the Rehabilitation Mortgage Loan funds the home purchase price along with the expenses for renovation. When used to refinance a home, the Rehabilitation Mortgage Loan amount includes the funds to pay off the existing first mortgage as well as the cost of repairs, according to CHFA.

Household income limits apply to all purchasers, except in targeted areas, where over-income households may still apply for CHFA financing regardless of income limits.

DAP. The DAP loan helps low- and moderate-income people to make down payments on a home. It is secured by a second mortgage on the home.  The DAP interest rate is the same as the regular program rate for the Homebuyer Mortgage Program (see above) and other CHFA programs (e. g. , Teachers Mortgage Assistance Program, Police Homeownership Program, and the Military Homeownership Program -– notably, these programs are specific to individuals' professions, but can also benefit moderate-income people).

First time homebuyers or anyone who has not owned a principal residence for the past three years are eligible. A prior homeowner who is purchasing in a federally targeted area or under a qualified rehabilitation mortgage may also be eligible. In all cases, the borrower's household income may not exceed the CHFA income limits for the municipality in which the property is located.

DAP loans are available statewide. Sales price limits and types of homes financed are the same as for the Homebuyer Mortgage Program.

DECD Down Payment Assistance Grant Program and the state Housing Trust Fund (HTF)

Down Payment Assistance. DECD is in the process of finalizing organizations that will administer grants for its down payment assistance program, which consists of funding from (1) its FLEX program and (2) the Department of Housing and Urban Development program that is part of the federal American Dream Down payment Initiative Assistance (ADDI). The program will help first-time homebuyers with down payment and closing costs, according to DECD.

DECD's FLEX program is its primary housing production program, which is funded from the proceeds of the sale of the state's general obligation bonds (CGS § 8-37pp). The ADDI program aims to increase home ownership rates, especially among lower-income and minority households, and to revitalize and stabilize communities, according to an April 2005 press release from the governor's office.

State HTF. PA 05-5, June Special Session, created a state HTF and authorizes the State Bond Commission to capitalize it by issuing up to $ 100 million in General Obligation bonds, with $ 20 million effective each July 1, from 2005 to 2009. It established the Housing Trust Fund Program and required DECD to develop and administer it. The program, among other things, must encourage the creation of housing for homeownership at a cost that makes it affordable for low- and moderate-income people, meaning they pay no more than 30% of their gross household income for it (CGS § 8-336p). While the trust fund may not provide direct assistance to individuals at this time, some of the organizations that receive funding may provide financial assistance and all work to create more moderately priced housing for purchase by people with low- and moderate-incomes.

The act defines “low- and moderate-income families and persons” as people whose income falls within income levels the commissioner sets, except he may establish income levels up to 120% of the area median income, as determined by the U. S. Department of Housing and Urban Development. (Connecticut law bases affordability on the proportion of income a family spends on housing. A unit is affordable if a family earning no more than the municipality's median income pays no more than 30% of its income for the housing (CGS § 8-39a)).

In June 2006, the state invested the first $ 10 million from the fund in seven affordable housing programs across the state. The governor announced that another $ 4. 1 million will fund eight projects “that will create or preserve 123 units of housing and leverage $ 23. 7 million in private investment,” according to an August 2, 2006, press release from the governor.

MUNICPAL AUTHORITY TO ASSIST WITH MODERATE-INCOME HOUSING

State law allows municipalities to authorize housing authorities to, among other things, create and preserve affordable housing. The law also allows municipalities to establish local housing trust funds (housing trust funds are distinct funds established by cities or other entities that permanently dedicate a source of public revenue to support the production and preservation of affordable housing, according to The National Housing Trust Fund Campaign).

State law establishes a housing authority in every municipality where there is a need (CGS § 8-40).

Housing authorities have the power to promote the creation and preservation of housing for low-and moderate-income people. A housing authority may do so, either directly or through an agency or instrumentality designated or appointed by the authority, by providing developers with loans or grants.

The law also allows municipalities to establish housing trust funds (CGS § 7-148 (c)(2)(K)). Municipalities may also use the funds to assist homeowners to purchase homes.

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