Chapter 9 Financing Your Purchase – Loan Types, CHFA vs. Conventional
Home • Chapter 1: Market • Chapter 2: Property Types • Chapter 3: Financial Ready • Chapter 4: CHFA Programs • Chapter 5: Dream Team • Chapter 6: Searching • Chapter 7: Offers • Chapter 8: Inspections • Chapter 9: Financing • Chapter 10: Closing • Chapter 11: Moving In • Chapter 12: Special Types • Chapter 13: Green Perks • Chapter 14: Post-Closing • Chapter 15: Wealth • Resources • Glossary
You’ve found the home, your offer is accepted, and inspections look good. Now it’s time to lock in the money.
In March 2026, mortgage rates are stable around 6.5–7.0% for 30-year fixed (depending on credit and program). The right loan can save you $200–$400 per month and tens of thousands over the life of the loan.
Main Loan Options in Connecticut
- Conventional Loans
- Best for strong credit (680+) and 5–20% down.
- Lowest long-term rates when you qualify.
- PMI required if under 20% down.
- FHA Loans (3.5% down)
- Easier credit and DTI requirements.
- Great for first-time buyers or lower credit scores.
- Upfront MIP + annual MIP.
- VA Loans (0% down)
- For veterans, active military, and eligible spouses.
- No PMI, competitive rates.
- USDA Loans (0% down in rural areas)
- For properties in eligible rural Connecticut towns.
- Income limits apply.
CHFA Loans – Often Your Best Choice in 2026
CHFA mortgages pair with their down-payment programs (Time To Own, DAP, SmartMove).
- Rates are competitive or better than conventional in many cases.
- More flexible credit and DTI rules.
- Must use a CHFA-approved lender.
Quick Comparison Table (March 2026)
| Feature | Conventional | FHA | VA | CHFA (with assistance) |
|---|---|---|---|---|
| Minimum Down Payment | 5% | 3.5% | 0% | As low as 1% or 0% |
| Credit Score Needed | 680+ | 620+ | 620+ | 620+ (more flexible) |
| Mortgage Insurance | PMI | MIP | None | Often covered by DAP |
| Best For | Strong credit | First-timers | Veterans | Most CT buyers |
| Pair with Assistance | Limited | Yes | Yes | Designed for it |
Closing Costs Breakdown (Typical $400K Home)
- Lender fees & origination: $3,000–$5,000
- Attorney fees: $1,200–$2,500
- Title insurance & search: $1,500–$2,000
- Transfer taxes & recording: ~$2,000–$3,000
- Prepaid taxes & insurance: $2,000–$4,000 Total: Usually 2–5% of purchase price ($8,000–$20,000)
Steve’s Tip: Always ask your lender for a Loan Estimate within 3 days of application and a Closing Disclosure 3 days before closing. Compare at least 3 lenders — even a 0.25% rate difference saves big money.
Printable Financing Checklist
□ Get pre-approved (CHFA lender recommended) □ Compare at least 3 Loan Estimates □ Lock your rate when it feels right □ Review Closing Disclosure 3 days before closing □ Budget for 2–5% closing costs + reserves
You now have every financing option clearly laid out for Connecticut in 2026.
Next Step: Turn to Chapter 10 for the attorney-led closing process — exactly what happens step-by-step from mortgage commitment to keys in hand.
