The State Bond Commission on Tuesday approved $40 million in bonding that will allow Connecticut to reopen a program that offers down payment and closing cost assistance to first-time homebuyers.
Through the Time To Own program, first-time homebuyers get an average of about $30,000 toward a down payment, according to data released last year. The loan is forgivable, and the program has helped more than 4,800 people buy their first homes.
The program has opened and closed a handful of times since its launch in June 2022. It’s been reopened with state bonding dollars and bridge funding from the Connecticut Housing Finance Authority.
The latest round of bonding was authorized by the legislature in the 2023 session when lawmakers approved nearly a billion dollars in the bond package for housing-related expenditures. Before that money can actually be spent, the bond commission, which the governor chairs, has to vote to allocate the bonds.
“This down payment and closing cost assistance helps them a little bit,” said Department of Housing Commissioner Seila Mosquera-Bruno, during Tuesday’s meeting of homebuyers. “With a high increase in rents, really, families that are working with middle income, they’re not able to save that down payment.”
The Time to Own program is part of a larger effort by state officials to address Connecticut’s housing crisis. The state lacks tens of thousands of units of housing that are affordable for its lowest income renters, and the stock of homes available for sale has been historically low in recent years.
While experts say much of the problem comes down to a lack of supply, Connecticut has pushed forward this program to increase homeownership rates.
The program has had a particular focus on helping people of color, who were historically and systemically shut out of the home buying market for decades, purchase houses. More than half of the people who participated in the program so far are people of color, according to a press release from Gov. Ned Lamont’s office.
“Owning a home is a cornerstone of the American Dream, and programs like Time To Own are making it possible for more Connecticut residents to turn that dream into reality,” Lamont said in the release.
Homeownership is one of the major methods of wealth-building for people in the United States.
Sen. Henri Martin, R-Bristol, was the only commission member to vote against the measure, saying he thinks the assistance will add to demand in an already tight housing market. He also said that he thinks the program doesn’t have a “sweat equity component.”
“I’m not really a big advocate of giving people or individuals this type of funding to buy a home,” Martin said. “I would like everyone to have a home. But the problem is, when you give people money, it’s a little bit different than earning money and spending your own money.”
Mosquera-Bruno said that individuals do have to meet eligibility guidelines including credit requirements and have to take classes on homeownership. The loan is forgivable, with 10% of the principal balance forgiven each year.
State Comptroller Sean Scanlon told the commission about an email he received from a first-time homebuyer in Windsor who participated in the program. The email said that the loan “made homeownership financially feasible,” Scanlon said.
“This young man will get the ability to buy his first home with his young family,” Scanlon said. “And I know there’s others that are waiting for this money too.”
Lamont said that the state is also working to increase housing supply, but the assistance program would help Connecticut residents.
“I think what that means in terms of ownership is not just about building wealth, but it’s also about having a commitment to your local community,” Lamont said.
Connecticut residents who are first-time homebuyers and have lived in the state for the last three years and qualify for and receive a first mortgage from the Connecticut Housing Finance Authority are eligible for the program.
Further information about applications and eligibility are available on the Connecticut Housing Finance Authority’s website.