On May 6, the Connecticut Post pointed out a change coming to the Connecticut Housing Finance Authority. A bill approved that day in the legislative Finance Committee extends the maximum amount the CHFA allots toward uninsured mortgages from $1.5 billion to $2.25 billion.
CHFA has roughly $3.8 billion for loans, with 26 percent going toward uninsured mortgages. With this new bill, homebuyers who put down 20 percent of the total purchasing price would not be required to have mortgage insurance – a common requirement for state- and Federal Government-backed loans. As the Connecticut Post points out, the change would allow 2,000 homebuyers to take out uninsured mortgages.
Nevertheless, while the bill, recently approved 36-14 and headed to the state Senate, is part of a recovery effort, not everyone is on board. State Representatives, in their statements to the press, indicate the measure isn’t appropriate for Connecticut’s economy, even going as far to say it could result in another mortgage bubble. Those in favor, on the other hand, consider it a boost to the economy and state housing market, which has been middling and partially affected by foreclosures. To the press, Rep. Patricia Widlitz, D-Guilford, co-chairman of the committee, stated: “I think especially given the difficulty people are having in this economy, I think it’s a good way to expand affordability of housing and they do have the reserve funds to back this up.”
An effort to expand homeownership in the state, CHFA loans, along with HERO and UR Home programs, feature low down payments and interest. As a program specifically geared toward first-time homebuyers, CHFA loans additionally offer options for teachers, policemen, and military professionals and for Section 8. Interested Connecticut homebuyers must keep price and property restrictions in mind and, if unwilling or unable to make a large down payment, need mortgage insurance through the Federal Housing Administration, Veterans Administration, or USDA Rural Development, or, with a 15-percent or larger down payment, private mortgage insurance.