Down Payment/Closing Cost Assistance

Down Payment/Closing Cost Assistance is a forgivable loan for homebuyers in New Haven, Connecticut. The City of New Haven Down Payment / Closing Cost Assistance program provides first-time homebuyers with a zero-interest forgivable second mortgage of up to the greater of 6% of the purchase price or $20,000 for the purchase of a 1-4 unit owner-occupied home in New Haven. The loan is forgiven at 20% per year, fully forgiven at the end of year 5. The program is funded with HUD HOME / CDBG pass-through dollars and administered by the City's Housing Administration and Development division (within the Economic Development Administration / Livable Cities Initiative). Applications are submitted to the City through participating mortgage lenders. Zero-interest forgivable second-mortgage loan of up to the greater of 6% of the purchase price or $20,000, used for down payment, closing costs, or a combination of both. Loan is forgiven at the rate of 20% per year, fully forgiven at the end of year 5. No monthly payments. The applicant may sell or transfer the property at any time during the 5-year monitoring period provided the unforgiven balance is repaid to the City of New Haven, or the property is sold/transferred to a buyer willing to assume the balance and the loan's terms. Funding comes from HOME, CDBG, Federal, and Local Government.

Down Payment/Closing Cost Assistance provides assistance worth 6% of the purchase price, as set by the program. Homebuyer contribution: Minimum borrower contribution per first-mortgage program. The program can be combined with other assistance, subject to the rules of each. Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Down Payment/Closing Cost Assistance is forgiven after 5 years, so a homebuyer who stays that long does not repay it. Repayment is triggered by Loan is forgiven at 20% per year over 5 years (fully forgiven at year 5). If the home is sold, refinanced with cash-out, transferred, or no longer owner-occupied during the 5-year monitoring period, the unforgiven balance is due and payable to the City of New Haven (or the loan may be assumed by an income-eligible buyer accepting the same terms). The assistance is recorded in 2 position. Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Down Payment/Closing Cost Assistance is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time" has exceptions here: First-time homebuyer (no ownership of residential real estate in prior 3 years). On credit, the program states: No published minimum FICO; underwriting follows the buyer's first-mortgage product. A homebuyer education course is required, through HUD-approved housing counseling agencies serving New Haven (e.g., NHS of New Haven, HDF Connects, Connex Credit Union counseling network); 8-hour homebuyer education required. Residency requirement: Property must be located within the City of New Haven, CT, and be the buyer's primary residence for the 5-year monitoring period. Citizenship or immigration status: U.S. citizen or eligible non-citizen permitted by HUD HOME / CDBG rules and the buyer's first-mortgage product. Property must be a 1-4 unit owner-occupied dwelling located within the City of New Haven. Buyer must be a first-time homebuyer (no ownership of residential real estate in the prior 3 years). Buyer must occupy the property as their primary residence for the 5-year monitoring period. Maximum assistance is the greater of 6% of the purchase price or $20,000. The City provides a zero-interest forgivable loan, forgiven at 20% per year over 5 years. If the home is sold or transferred during the monitoring period, the unforgiven balance must be repaid (or the loan assumed by an income-eligible buyer accepting the same terms). Buyer must complete an 8-hour HUD-approved homebuyer education class. Income limits follow HUD HOME / CDBG 80% AMI for the New Haven-Milford MSA, adjusted by household size.

Down Payment/Closing Cost Assistance limits household income to 80% of the area median income, which varies by county and household size. Household income at or below 80% of the New Haven-Milford MSA Area Median Income, adjusted by household size: approximately $65,050 (1-person) up to $122,650 (8-person). Limits are updated annually by HUD. The limit applies to total household income, not only the borrower’s. The program lists a maximum household size of 8. Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

Down Payment/Closing Cost Assistance caps the purchase price as follows: No fixed dollar maximum published; subject to HUD HOME 95% maximum-purchase-price rule for the New Haven area. Eligible property types include Single-family detached, 2-unit, 3-unit, 4-unit, and Condominium. New construction is eligible. Manufactured homes are not eligible.

Down Payment/Closing Cost Assistance serves homebuyers purchasing in New Haven, Connecticut.

Applications for Down Payment/Closing Cost Assistance go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through Submitted by participating lender to the City; first-come, first-served subject to annual HUD HOME / CDBG funding allocation. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.