From the rich history of Hartford to the beautiful coastal town of New Haven, there are plenty of reasons to buy a home in Connecticut. There are many mortgage options on the market, so buyers need to be careful not to think of the home loan process as a sinking ship. For those looking to purchase their home without a huge down payment or inflated credit score, an FHA loan in Connecticut may be a lifesaver.
A Connecticut FHA loan is an option many Connecticut residents find appealing when deciding how to finance their home. Generally, down payments and credit score requirements are lower than conventional loans, so borrowers can save money with buyer-friendly interest rates.
Why consider an FHA Loan in Connecticut
Connecticut offers a wide variety of geography ranging from beaches to scenic mountain views and vineyards, which makes it a great place to settle down. Connecticut has many beautiful homes to offer, and an FHA loan is a reliable way to finance it. This is reflected in the total value of nearly $128 million in FHA loans granted as of April 2019.
Benefits of FHA Loans in CT
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Connecticut
There are maximum FHA loan amounts homebuyers can borrow in Connecticut, so you'll want to have some idea of how much you can borrow before you start shopping. The maximum is adjusted every year and depends on where in Connecticut you decide to buy a house. For most of Connecticut the loan limit is $331,760, but some counties differ. For example, if you are looking in Fairfield County the maximum loan limit raises to $601,450. See the table below for a full list of Connecticut FHA loan limits in 2021.
Connecticut FHA Loan Limits by County
|County||FHA Loan Limit|
|All other areas||$331,760|
Are You Eligible for an FHA Loan in CT?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
Learn More About FHA Loan Requirements
What Do You Need to Apply for an FHA Loan in CT?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.