100% Mortgage Loans

Many of the options that were available to finance 100% of the purchase price of your home in the mid 2000’s have disappeared.  Today, there are two ways in which home buyers can obtain 100% financing on the purchase of their home; CHFA and USDA.  Both of these programs are government backed and allow people who might not have the money to cover the down payment and closing costs to purchase a home.

CHFA Financing

The Connecticut Housing Finance Authority (CHFA) has a program that is designed to help first time homebuyers purchase homes in Connecticut.  The program is designed to expand the opportunity for homeownership for first time homebuyers who would not qualify under conventional mortgage guidelines.  CHFA offers a number of benefits to first time homebuyers including the down payment assistance program (DAP) with terms that make homeownership more affordable.

• Single and 2-4 multifamily units are eligible.
• 30 Year fixed rate terms.
• Special program discounts for military, teachers and policemen.
• First time homebuyers include people who have previously owned a home but have not had ownership in the past 3 years.
• Eligible candidates may have had a prior Bankruptcy as long as it has been discharged for at least two years.
• Down Payment Assistance Program (DAP) provides financing for the down payment on the home.
• Credit scores of 660 or higher are eligible for DAP.
• Debt to Income ratios of 33%/43%

USDA Financing

USDA loans are a great alternative source of financing particularly for first time homebuyers.  They provide terms that allow buyers to get into homeownership with a very affordable option.

• Much of Connecticut is eligible for USDA go to USDA.org and enter the address to determine if your property is eligible.
• Geared toward low and moderate income families.  Moderate income is defined at 115% of the area median income which the USDA lists at $99,200 for much of Connecticut.
• USDA provides 100% financing on the purchase.
• Single family and 2-4 multifamily units are eligible.
• Fixed rate, 30 year terms.
• Credit Scores of 620 or higher. (which opens this up to a wide selection of the population.)
• Debt to Income ratios of 29%/41% but can flex as high as 36%/48%.

The 100% financing allows potential buyers to conserve their cash for closing costs and other expenses related to buying a home.  Contact me at 860-918-0251 with any questions or if you would like to sit down and discuss your options.