Connecticut Governor Jodi Rell announced November 8th a new subsidized Mortgage Refinance Program called CHFA CONNECTICUT FAMILIES PROGRAM. This new refinance program will be administered through CHFA who up to now has only done purchase loans.
The purpose of this new refinance program is to enable low to moderate homebuyers that purchased their first home using a 2/28 subprime ARM that is delinquent or face steep payment increases due to the reset of the ARM. “Under the new program, borrowers with a subprime mortgage who cannot make their mortgage payment and currently reside in their home may apply to CHFA for refinancing. The new CT FAMLIES program will assist low and moderate income borrowers who took out a subprime loan to purchase their first home by refinancing them into 30-year, fixed rate amortizing loans.”
Some of the highlights on this program are:
- There is $50 Million available for first mortgages– approximately 300-400 loans
- There will be $4 Million available for Closing Costs Assistance under the DAP program.
- The current mortgage must be a Non FHA Arm that has reset
- The current mortgage must have been used to purchase their 1st Home
- Borrowers must meet CHFA income limits
- FHA loan limits apply
- FHA Secure guidelines will apply
- Participating Lenders have not yet been announced
- Program will commence on December 10
- The interest rate will be .25% above the standard CHFA rate, which is at 6% this week.
- A dedicated call center will be set up to screen incoming calls to determine initial eligibility
- DAP is limited to $10,000 per eligible borrower to assist in required FHA investment, closing costs & arrearages. Borrowers must have no more than $5000 in liquid assets. In addition, the maximum CLTV will be limited to 102%
Other States may also be establishing similar local programs to help Subprime Borrowers in their State. I would suggest that those in areas outside of Connecticut check with their local Government to see if similar programs are in the process of being developed.
More details of this program will be issued as we approach the December 10th commencement date, and I will Post them as they become known.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
