Zero-interest loans are back for some homebuyers in Connecticut
The state’s program providing money to Connecticut residents looking to become first-time homeowners reopened Monday.
Time to Own is operated through the quasi-public organization the Connecticut Housing Finance Authority (CHFA).
Since the program began in June, more than 1,100 residents finalized the purchase of their homes, according to program director Lisa Hensley.
“We realized that saving enough money for the down payment and closing cost is one of the main barriers to homeownership for many first time home buyers,” Hensley said. “This program can be used to help pay for both and may be combined with other types of assistance such as our down payment assistance program.”
Time to Own provides a loan up to $50,000, with zero percent interest. The loan effectively functions as a lien on the property. However, each year, 10% is forgiven, until the loan is fully forgiven on the loan’s 10th anniversary.
“That will help increase buying power or reduce mortgage payments to a more affordable level,” Hensley said.
In early April, the program received an additional $20 million in funding from the state’s Bond Commission, which CHFA hopes will provide between 500 and 600 more loans.
The average assistance given during the program’s first year was $32,000, according to Hensley. The average age of program recipients was 35 and recipient median income was $64,060, according to program data.
Time to Own was designed to address a history of minorities disproportionately being excluded from building generational wealth, Department of Housing Deputy Commissioner Brandon McGee said at the Bond Commission meeting earlier this month.
“Particularly those in communities represented by the most disenfranchised and those looking to be a part of Connecticut history," McGee said. "When I think of housing I think of opportunities for generational wealth, addressing the lack of affordable housing in the state of Connecticut.”
While almost 50% of Time to Own borrowers were white, nearly 30% were Hispanic or Latino and 17% were Black. The program’s borrowers represent a more diverse swath of the state, as the racial composition of Connecticut is nearly 80% white.