October 1, 2008
AFFORDABLE HOUSING PROGRAMS IN CONNECTICUT
By: Joseph R. Holstead, Associate Analyst
You asked how people can locate affordable housing units in Connecticut and for a description of affordable housing programs for both renters and prospective homeowners.
In 2007, the state launched a website, www.CTHousingSearch.org, that allows anyone to search for an apartment in Connecticut by categories, including affordable rental housing in general, affordable housing that is accessible to people with disabilities or specifically for senior citizens, and market rate housing. The contractor in charge of the site, Socialserve.com, also maintains a bilingual, toll-free call center for the general public to find affordable rental housing - the number is (877) 428-8844.
By law, a housing unit is affordable if it costs an occupant no more than one third of his or her annual income, where the income is less than or equal to the area median income (AMI) for the municipality where the housing is located, as determined by the U.S. Department of Housing and Urban Development (HUD) (CGS § 8-39a).
HUD also has a searchable web page for affordable (subsidized) rental units in Connecticut, which is available by clicking on or visiting the following link: http://www.hud.gov/apps/section8/step2.cfm?state=CT,Connecticut.
Additionally, the following HUD link has more information on renting in general: http://www.hud.gov/local/index.cfm?state=ct&topic=renting
Several state and federal programs assist renters to pay rent. Connecticut has two main rent subsidy programs that help low-income families rent privately owned housing. They are (1) the federally funded Section 8 housing choice vouchers program and (2) the state-funded rental assistance program (RAP), which we describe below focusing on eligibility and the application process, along with other programs.
Regarding home buying opportunities for low- and moderate-income families, the Connecticut Housing Finance Authority (CHFA) has homebuyer programs and a down payment assistance program for eligible first-time homebuyers, and certain individuals who have not owned a home for three consecutive years. The Federal Housing Administration (FHA), which is part of HUD, also insures mortgages to help families with lower incomes qualify for a mortgage.
Additionally, a new program that is the result of recent federal legislation aims to provide affordable and supportive housing opportunities on homes that have been foreclosed. The Housing and Economic Recovery Act of 2008 (PL 110-289) authorizes approximately $4 billion nationally for local grants to buy houses already under foreclosure in an attempt to stabilize neighborhoods and keep houses affordable and in good condition. HUD will provide these funds to states, including Connecticut, in the near future. In fact, the state Department of Economic and Community Development (DECD), which will administer the program on the state level, expects $25 million from HUD and will have more information on the program's requirements over the next couple of weeks. For more information, visit DECD's website at: http://www.ct.gov/ecd/cwp/view.asp?a=1098&Q=251106&ecdNav=|.
RENT SUBSIDY PROGRAMS
Section 8 and RAP Eligibility
For interested families, public housing authorities (PHAs) (see Background) determine eligibility for a Section 8 housing voucher based on the total annual gross income and family size (only U.S. citizens and specified categories of non-citizens who have eligible immigration status are eligible). In general, the applying family's income cannot exceed 50% of the median income for the county or metropolitan area in which the family chooses to live.
As an example, the AMI for Fairfield, CT, for FY 08 is $81,100. Thus, the income limit, 50% of the AMI, for a family of four is $40,550 (30% of the AMI for a family of four in Fairfield is $24,250), according to HUD's income limit web page, which is available by clicking here. The PHA serving a particular community can provide individuals with the income limits for their area and family size, according to HUD. A list of housing authority contact information is available by clicking or visiting the following link: http://www.ct.gov/ecd.
Similarly, to be eligible for RAP, a family's income normally may not exceed 50% of the AMI where it chooses to live. Only U.S. citizens and certain non-citizens can participate. More information is available at the Department of Social Services (DSS) website: http://www.ct.gov/dss/cwp/view.asp?a=2353&q=305202
Applying for Section 8 Vouchers. PHAs administer the vouchers either (1) under contract directly with HUD or (2) as subcontractors for the statewide voucher program overseen by DSS, which contracts with John D'Amelia Associates, LLC (JDA). In either case, people apply to the PHA for a voucher. By law, a PHA must provide 75% of its voucher to applicants whose incomes do not exceed 30% of the area median income. (Median income levels vary by location.)
In 2007, DSS closed its waiting list for both Section 8 vouchers and RAP certificates and does not anticipate it opening anytime soon. But, DSS recommends people register on the state's website to receive an email notification when any PHA advertises the opening of its waiting list to accept new Section 8 applications. To register click on or visit the following link: http://www.das.state.ct.us/Business_Svs/HCVP/HCVP_Home.asp
Alternate Resources for Section 8 Information. People interested in Section 8 can also call HUD's Hartford office at (860) 240-4800 and ask for a copy of their booklet, “Looking for HUD-Associated Rental Housing in Connecticut.” A person does not have to live in a PHA's jurisdiction to apply for its Section 8 program (although, residents in that town have priority). Contacting certain PHAs directly may allow an interested person to more quickly locate an open waiting list. (The HUD booklet also lists other types of subsidized housing, in addition to Section 8.)
Additionally, people interested in Section 8 may check DECD's list of housing authorities throughout Connecticut, by clicking on the following link: http://www.ct.gov/ecd. Again, this could be beneficial because a person could contact the authority directly.
DSS provides five questions to ask any housing authority:
1. do you have a Section 8 program,
2. when is your waiting list opening up,
3. do you have a residency preference or an initial residency requirement,
4. do you ever grant waivers of those preferences or requirements, and
5. how long is my waiting time likely to be, if I get on the waiting list?
Applying for a RAP Certificate
When the waiting list is open, a family that wishes to apply for RAP would contact JDA to be considered for placement on the waiting list. To notify people of a list opening, DSS would place a notice and pre-application form in local newspapers as well as on the DSS website (again, when the list is about to be reopened). Information on contacting JDA can be found at the state's information website for various services, http://www.211ct.org/, and the corresponding phone number, 211. The website currently states that one must write to JDA for waiting list information. For general information from JDA, the phone number is (866) 923-6347 ext. 140. The email listed is: email@example.com. The following link is to the 211 page on JDA: http://www.211ct.org/referweb/Detail.aspx?n;;0;;;175200;365302;20917.
Finding an Apartment upon Receipt of Section 8 Voucher or RAP Certificate
It is the family's responsibility to find an appropriate unit once they have a Section 8 voucher. The unit must meet the housing quality standards and program requirements set by HUD and the rent must be reasonable, according to HUD's website. A family may move without losing its voucher. HUD notes that a family may choose a unit anywhere in the U.S. where a PHA administers a Section 8 voucher program. But the family may only use the voucher to lease a unit in an area where the family is income eligible.
Similar to the Section 8 voucher, families with a RAP certificate must find the rental unit, which must meet quality and safety standards (DSS uses the same standards set by HUD). RAP allows families to move without the loss of the housing assistance. But the family must (1) notify the PHA before the move, (2) terminate its existing lease within the lease provisions, and (3) find acceptable alternate housing.
Two other state administered programs provide rent subsidies to certain groups: (1) Elderly RAP, for people in state-assisted elderly housing, and (2) T-RAP (or Transitory Rental Assistance Program) for those transitioning off welfare.
DSS also administers the Security Deposit Guarantee Program, which helps financially eligible people in certain situations to secure private rental housing by guaranteeing up to two months' rent (which most landlords require as a security deposit). By law, a landlord can ask a tenant to pay up to two months rent as a security deposit - only one month if the tenant is age 62 or older (CGS § 47a-21(b)). New Section 8 voucher and RAP certificate holders and families in emergency shelter or housing may be eligible. Applications are available at DSS offices or in emergency shelters.
CHFA's Homebuyer Mortgage program (http://www.chfa.org/FirstHome/Homebuyer%20Programs.htm) provides 30-year, fixed-rate loans, with an interest rate below comparable market rates for those who qualify and the ability to purchase with little or no money down (down payment assistance is available). These mortgages are available year-round on a continuous basis primarily to first-time homebuyers, but also to low- and moderate-income people who have not had an ownership interest in a home for the previous three years. Prior homeowners may also qualify for a mortgage if the home they purchase is within a targeted area in Ansonia, Bridgeport, Danbury, Enfield, Groton, Hartford, Meriden, Middletown, New Britain, New Haven, New London, Norwalk, Norwich, Rocky Hill, Stamford, Torrington, Waterbury, or Windham.
Buyers must purchase homes within CHFA sales price limits (e.g., no more than $596,000 for an existing or new property in Fairfield) and meet income limits, which vary by municipality. The income limit in Fairfield, for example, for one or two people is $93,990 and $108,090 for
three or more (notably, these limits are currently set at 2006 levels). For targeted areas, however, over-income households may still apply for CHFA financing regardless of income limits.
Over 100 participating lenders (banks and mortgage companies statewide) originate and service the mortgages, according to CHFA's website. Click the following link for a list of lenders: http://www.chfa.org/FirstHome/firsthome_ParticipatingLenderList.asp.
Down Payment Assistance Program. 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.
The DAP loan 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 and CHFA's other first-time buyer programs: Homeownership Program (for public housing residents), Teachers Mortgage Assistance Program, Police Homeownership Program, Military Homeownership Program and the Home of Your Own Program for people with disabilities. (Click here for the Current Interest Rates.)
DAP loans are available at an interest rate of 1% (APR approximately 1.1%) to some income-eligible borrowers under the Homeownership Program (for residents of public and subsidized housing).
According to FHA's website, to be eligible for an FHA loan, a home buyer must have a valid social security number, be a lawful U.S. resident, and of a legal age to sign on a mortgage (click or visit the following link for FHA frequently asked questions: http://www.hud.gov/offices/hsg/fhahistory.cfm). FHA insures mortgages that approved lenders make to individuals and non-profit and government agencies that are approved to participate in HUD's programs; HUD does not loan money to homebuyers. Lenders verify income, assets, liabilities, and credit history for all parties on the loan, as people cannot take ownership interest in a property without qualifying for the loan.
FHA's mortgage programs do not typically have maximum income limits for qualifying, although the prospective buyer must have sufficient income to qualify for the mortgage payment. Income limits may apply if the buyer attempts to qualify for down payment assistance (such as CHFA's program) or other secondary financing programs that may be used in conjunction with an FHA loan.
Those interested to determine if they qualify and how much they can borrow based on income and debt should contact a HUD-approved lender. Click on the following link for approved lenders in Connecticut: http://www.hud.gov/ll/code/getllst.cfm?startseq=-1&called_by=llslcrit&ldrtp=05&lndrnme=&lndrcity=&lndstate=CT&lndrcounty=&lndrcountyCode=none&lndrzip=&ldrad=1&aafb=all_areas&groupsize=20&pbox1=on&pbox2=on&sobox1=on.
State law establishes a housing authority in every municipality where there is a need. A municipality must find that there is a specific need for a housing authority and authorize its existence, which allows the housing authority to operate. The law provides the housing authority with various powers, including the power to enter into contracts; make and repeal bylaws, rules, and regulations; and investigate housing conditions and the ways to improve those conditions in its area of operation. The housing authority's powers are vested in a locally appointed board of commissioners. Click on the following link to OLR Report 2006-R-0555 for more information: http://search.cga.state.ct.us/dl2006/rpt/doc/2006-R-0555.doc.