Regulations of Connecticut State Agencies
(a) This program provides financial assistance in the form of second mortgage loans to homebuyers who lack sufficient financial resources to make downpayments on private housing. It is also intended to serve as a mechanism for rehabilitating housing and preventing displacement due to condominium conversions. The Commissioner may enter into a contract with a homebuyer to provide a loan to assist in the purchase of a dwelling or in the purchase and rehabilitation of a dwelling containing not more than four residential units, provided such homebuyer shall reside in at least one of the units.
(b) The loan shall not exceed twenty-five percent (25%) of the cost of acquiring such dwelling inclusive of any homebuyer equity or twenty-five percent (25%) of the value of such dwelling after rehabilitation, if greater, inclusive of any home-buyer equity.
(c) Condominium units are eligible provided that at least fifty percent (50%) of the units in the development are owner occupied. The commissioner may exempt those developments purchased, constructed, and/or financed with government funding.
(d) Where a condominium conversion is taking place, there shall be no limit on the loan for a downpayment that may be made to a tenant who is able to obtain a mortgage for the purchase of his or her condominium unit. The tenant shall have been renting the unit for at least six months prior to receiving the statutory notice of intent to convert to a condominium, and shall not have had a contract to purchase at that time.
(e) The Commissioner shall establish the terms and conditions of any loan provided in accordance with this program. In no case shall the term of the loan exceed the term of the first mortgage loan obtained for the purpose of purchasing such dwelling. If the homebuyer under the program assigns, transfers or otherwise conveys his or her interest in such dwelling or ceases to occupy such dwelling, the unpaid principal balance of said loan together with interest thereon shall become due and payable. The Commissioner, at his discretion, may adjust the interest rate, terms and conditions of any loan if he determines that the homebuyer is unable to repay the loan and the adjustment will facilitate repayment.
(f) The commissioner may, in exchange for providing any downpayment assistance loan, share in the appreciation of any dwelling, or any interest therein, upon its sale. Such share in appreciation shall be determined according to the percentage of the downpayment assistance loan and shall be based on the current sale price less the original price paid by the homebuyer. However, the department's share in appreciation shall not exceed twenty-five percent (25%) of the total appreciation, except in the case of a condominium conversion.
(g) If a governmentally sponsored program, or some other program, approved by the commissioner, includes a provision that limits the homebuyer's appreciation then subsection (f) of this section shall not apply.
(Effective February 28, 1994)