Regulations of Connecticut State Agencies
(a) Each CHFA mortgage shall be insured by a mortgagee's title insurance policy which insures that CHFA has a good and valid mortgage on the mortgaged property. Such policy shall be issued in a form and by a title insurer licensed to do business in the State of Connecticut and must show recording data for the mortgage and the assignment thereof. The policy must be in an amount not less than the original principal balance of such loan. The named insured shall be named in the following form:
"(Participating lender) and/or Connecticut Housing Finance Authority, its successors and assigns, as their interests may appear."
(b) Title insurance policy exceptions for agreements or restrictive covenants relating to cost, use, building lines, minimum size, building materials, architectural, aesthetic or similar matters (other than single-family use restrictions on two to four family properties) are acceptable to CHFA if:
(1) there is no possibility of reversion or forfeiture of title in the event of violation thereof, and the title policy insuring a CHFA mortgage affirmatively insures that a breach or violation of covenants, restrictions, agreements, and other encumbrances will not result in a forfeiture or reversion of title; and
(2) no violation of any such agreements or restrictive covenants exists as of the date of closing.
(c) The following title insurance policy exceptions shall be acceptable to CHFA:
(1) any mutual easement agreement recorded in the land records of the town within which the property is situated that establishes a joint driveway or a party wall, whether constructed partly or wholly on the mortgaged property or the adjoining property, but only if the easement agreement allows all present and future owners, their heirs and assigns, unlimited use of the driveway or party wall without any restriction other than any restrictions stating the mutual easement owners' rights in common and duties as to joint maintenance;
(2) Encroachments on the mortgaged property by improvements on adjoining property, provided such encroachments do not extend more than one foot over the property line at any point, do not cover or enclose an area of greater than fifty (50) square feet on the mortgaged property, do not touch any building or any other improvement, and do not interfere with the use of the mortgaged property as a residence. An encroachment not meeting these standards will be acceptable to CHFA only if it is made the subject of an easement agreement; and
(3) liens for real estate or other taxes and assessments, including sewer or street-improvement caveats, no payments under which are due at the time of closing.
(Effective January 27, 1986)