Sec. 8-283. Declaration of policy.
Sec. 8-285. Creation of “Housing Purchase and Rehabilitation Fund”.
Sec. 8-286a. State or authority to share in appreciation of dwelling.
Sec. 8-286b. Mortgagee participation.
Sec. 8-286c. Amount of guarantee. Record of payments to honor guarantees.
Sec. 8-286d. Termination of loan guarantee.
Sec. 8-286e. Affordability incentive zones.
Sec. 8-288. Issuance of bonds.
Sec. 8-289. Adoption of regulations or written procedures.
Sec. 8-283. Declaration of policy. It is hereby found and declared that many Connecticut residents lack sufficient financial resources to make down payments or regular mortgage payments on private housing; that it is in the public interest to provide state financial assistance to such residents to minimize the disruptive effect of condominium conversion and to encourage home ownership and the rehabilitation of deteriorating housing in order to stabilize communities, improve the tax base and assist home ownership by low and moderate income families; and that the provisions of this chapter will further such objectives.
(P.A. 77-612, S. 1; P.A. 80-396, S. 1, 5.)
History: P.A. 80-396 deleted phrase “especially young families and individuals” following “many Connecticut residents” and allowed financial aid “to minimize the disruptive effect of condominium conversion”.
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Sec. 8-284. Definitions. As used in this chapter:
(a) “Eligible family or person” means a family or person who lacks the amount of income necessary, to purchase safe and adequate housing without special financial assistance;
(b) “Commissioner” means the Commissioner of Housing;
(c) “Authority” means the Connecticut Housing Finance Authority; and
(d) “Department” means the Department of Housing.
(P.A. 77-612, S. 2; 77-614, S. 284, 610; P.A. 78-303, S. 81, 136; P.A. 79-598, S. 3, 4, 10; P.A. 95-250, S. 26, 42; 95-309, S. 5, 11, 12; P.A. 13-234, S. 2.)
History: P.A. 77-614 substituted department of economic development for commissioner of community affairs; P.A. 78-303 substituted commissioner for department; P.A. 79-598 substituted commissioner of housing for commissioner of economic development; P.A. 95-250 substituted Commissioner of Economic and Community Development for Commissioner of Housing and added definition of “authority” and “department”; P.A. 95-309 made a technical change in definition of “department” and changed effective date of P.A. 95-250 but did not affect this section; pursuant to P.A. 13-234, references to Commissioner of Economic and Community Development and Department of Economic and Community Development were changed editorially by the Revisors to references to Commissioner of Housing and Department of Housing, respectively, effective June 19, 2013.
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Sec. 8-285. Creation of “Housing Purchase and Rehabilitation Fund”. There is established a “Housing Purchase and Rehabilitation Fund”. Such fund shall be used to make loans authorized by this chapter.
(P.A. 77-612, S. 3; P.A. 95-250, S. 27, 42; 95-309, S. 11, 12.)
History: P.A. 95-250 deleted provision re eligibility of expenses of the commissioner in implementing program; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section.
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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 or deferred loan 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. In the case of a deferred loan, the contract shall require that payments on interest are due currently but that payments on principal may be made at a later time.
(b) Not later than October 1, 2021, the authority shall establish guidelines for issuing loans under the program. Such guidelines shall permit the authority to (1) 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 (2) consider (A) the application of a prospective borrower, regardless of the prospective borrower's credit score, and (B) nontraditional credit references submitted by the prospective borrower including, but not limited to, proof of employment or proof of rental and utility payments.
(c) A loan or deferred 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 or deferred 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 or deferred 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.)
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).
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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 the authority.
(P.A. 91-346, S. 4, 9; P.A. 95-250, S. 29, 42; 95-309, S. 11, 12.)
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.
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Sec. 8-286b. Mortgagee participation. (a) Mortgage loan guarantees issued by the commissioner under subsection (e) of section 8-286 shall be in the form of a guarantee from the commissioner to an approved mortgagee. Mortgagees may participate in the program by entering into a mortgage guarantee agreement with the commissioner. Mortgagees participating in the program shall process and underwrite loan guarantees in accordance with the provisions of said subsection (e), this section and sections 8-286c and 8-286d and any regulations adopted by the commissioner pursuant to section 8-289.
(b) Any mortgagee seeking a loan guarantee and any mortgagor seeking to have a loan guaranteed shall provide such information to the commissioner as the commissioner deems necessary. The information shall be provided on a form prescribed by the commissioner. Any information required by the commissioner in connection with an application for a mortgage loan guarantee shall be provided subject to the penalty for false statement under section 53a-157b. No guarantee shall be valid until approved by the commissioner.
(c) No loan shall be eligible for a guarantee under the program established pursuant to section 8-286 unless the commissioner determines that the terms and conditions of the loan are acceptable to the commissioner.
(P.A. 95-202, S. 2; P.A. 00-196, S. 1; P.A. 21-101, S. 3.)
History: P.A. 00-196 made a technical change in Subsec. (b); P.A. 21-101 amended Subsec. (a) by replacing references to Sec. 8-286(d) with references to Sec. 8-286(e), effective June 30, 2021.
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Sec. 8-286c. Amount of guarantee. Record of payments to honor guarantees. (a) The maximum amount of any guarantee issued by the commissioner under the provisions of subsection (e) of section 8-286, section 8-289 and sections 8-286b to 8-286d, inclusive, shall be in an amount equal to twenty per cent of the mortgage on the real property.
(b) The guarantee shall secure the mortgagee up to the amount of the guarantee for any loss incurred by the mortgagee because of default of the mortgagor, including losses in principal balance, interest and fees and expenses due to foreclosure.
(c) The commissioner shall maintain a record of payments made to honor loan guarantees issued under the provisions of sections 8-286, 8-289 and 8-286b to 8-286d, inclusive.
(P.A. 95-202, S. 3; P.A. 21-101, S. 4.)
History: P.A. 21-101 amended Subsec. (a) by replacing reference to Sec. 8-286(d) with reference to Sec. 8-286(e), effective June 30, 2021.
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Sec. 8-286d. Termination of loan guarantee. The commissioner may terminate any loan guarantee if the mortgagee misrepresents any information pertaining to the guarantee or fails to comply with any term of the mortgage guarantee agreement in connection with the guarantee of the underlying loan.
(P.A. 95-202, S. 4.)
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Sec. 8-286e. Affordability incentive zones. The Connecticut Housing Finance Authority may establish affordability incentive zones under the homeownership loan program established pursuant to sections 8-283 to 8-289, inclusive, to incentivize the purchase of dwellings situated in municipalities not exempt from the affordable housing appeals procedure under subsection (k) of section 8-30g. The authority may expand access to the program in such zones by utilizing lending guidelines that are different from the guidelines for the purchase of a dwelling not situated in such zones, which may include increasing eligibility limits with respect to the purchase price of the dwelling or the maximum loan amount, or by reducing the rate of interest of the loan. If the authority establishes an affordability incentive zone under this section, any municipality that is not (1) exempt from the affordable housing appeals procedure under subsection (k) of section 8-30g, and (2) designated as an affordability incentive zone may make a request to the authority, in writing, to be considered an affordability incentive zone. The authority may, in its discretion, grant such requests after considering available funding for the program.
(P.A. 21-101, S. 2.)
History: P.A. 21-101 effective June 30, 2021.
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Sec. 8-287. Loan repayment. (a) Any loan or deferred loan contracted for pursuant to this chapter shall be secured by a second mortgage on the dwelling purchased by the recipient of such loan or deferred loan. If the recipient of such loan or deferred loan assigns, transfers or otherwise conveys his interest in such dwelling or ceases to occupy such dwelling, the unpaid principal balance of said second mortgage, together with interest thereon, shall become due and payable. If the recipient of any loan or deferred loan is unable to repay the loan or deferred loan, the authority or the commissioner, for loans or deferred loans made under this chapter prior to October 1, 1995, and the authority for loans or deferred loans made after October 1, 1995, at his or its discretion, as the case may be, may adjust the interest rate, terms and conditions of the loan or deferred loan to facilitate repayment.
(b) Repayment of any loan or deferred 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. The authority, in its discretion, (1) may approve repayment of a loan for a term that is concurrent with the first mortgage 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 paid by the authority to the State Treasurer and deposited in the General Fund, except that with the approval of the Secretary of the Office of Policy and Management and the State Treasurer payments received by the authority may be used by the authority to make additional loans pursuant to this chapter.
(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.)
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.
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Sec. 8-288. Issuance of bonds. The State Bond Commission shall authorize the issuance of bonds of the state in one or more series in accordance with section 3-20 and in a principal amount necessary to carry out the purposes of this chapter, but not in excess of an aggregate amount of thirteen million dollars. All of said bonds shall be payable at such place or places as may be determined by the Treasurer pursuant to section 3-19 and shall bear such date or dates, mature at such time or times, not exceeding five years from their respective dates, bear interest at such rate or different or varying rates and be payable at such time or times, be in such denominations, with or without interest coupons attached, carry such registration and transfer privileges, be payable in such medium of payment and be subject to such terms of redemption, with or without premium as, irrespective of the provisions of said section 3-20, may be provided by the authorization of the State Bond Commission or fixed in accordance therewith. The proceeds of the sale of such bonds, together with the premium and interest on sale, if any, shall be deposited in the Housing Purchase and Rehabilitation Fund created under section 8-285. Such bonds shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal and interest of such bonds as the same become due. Accordingly, and as part of the contract of the state with the holders of such bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due. Net earnings on investment or reinvestment of proceeds, accrued interest and premiums on the issuance of such bonds, after payment therefrom of expenses incurred by the Treasurer or State Bond Commission in connection with their issuance, shall be deposited in the General Fund of the state.
(P.A. 77-612, S. 6; P.A. 79-573; P.A. 81-370, S. 3, 13; P.A. 82-1, S. 1, 2; P.A. 85-558, S. 8, 17; P.A. 86-396, S. 13, 25; P.A. 87-405, S. 9, 26.)
History: P.A. 79-573 increased bond limit from $4,000,000 to $6,000,000 and made June 30, 1982, the last date for authorization of bonds; P.A. 81-370 increased the aggregate of bonds the bond commission may authorize for purposes of chapter 136 from to $6,500,000 and extended deadline to authorization by bond commission from June 30, 1982, to June 30, 1984; P.A. 82-1 increased aggregate amount of bonds that bond commission may authorize for the Housing Purchase and Rehabilitation Fund to $10,500,000 and extended the date by which such bonds may be authorized to June 30, 1985; P.A. 85-558 removed deadline for issuance of bonds under this section of June 30, 1985; P.A. 86-396 increased bond authorization to $11,000,000; P.A. 87-405 increased the bond authorization to $13,000,000.
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Sec. 8-289. Adoption of regulations or written procedures. The commissioner shall 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 he deems necessary to carry out the purposes of this chapter for loans or deferred 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 or deferred 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.)
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.
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