Glossary of Connecticut Real Estate Terms Pages 180–189 (expanded 10-page section for the complete book)
This glossary contains 108 key terms specific to buying a home in Connecticut in 2026. Every definition is written for first-time and repeat buyers, with emphasis on state laws, CHFA programs, mandatory disclosures, and local risks.
Accessory Dwelling Unit (ADU) A smaller secondary living space on the same lot as a single-family home. 2026 state laws make ADUs “as of right” in many towns with fewer restrictions.
Appraisal Professional valuation of the home ordered by your lender. Must meet or exceed your purchase price; low appraisals trigger gap coverage negotiations.
Appraisal Gap Coverage Contract clause where you agree to pay the difference (up to a set amount) if the appraisal comes in below the agreed purchase price.
Appraised Value The value assigned by the lender’s independent appraiser. Used to determine your loan amount and LTV ratio.
Attorney Review Period Mandatory 3–5 business day window after offer acceptance during which your Connecticut-licensed attorney reviews and can modify the contract. Unique to Connecticut.
Board of Assessment Appeals Local board that hears formal property tax appeals after the assessor denies an informal request.
Buyer’s Agent Real estate agent who represents only you (the buyer). Works to find homes, negotiate offers, and protect your interests.
Capital Gains Tax Federal tax on profit when you sell. Primary residence exclusion: up to $250K single / $500K married if you lived there 2 of last 5 years.
CHFA (Connecticut Housing Finance Authority) State agency offering below-market mortgages and down-payment assistance for income-eligible buyers.
Closing Final step where ownership transfers. In Connecticut, conducted only by a licensed real estate attorney.
Closing Costs Fees paid at closing (typically 2–5% of purchase price). Includes attorney fees, title insurance, transfer taxes, and lender fees.
Closing Disclosure Final document showing every cost. You must receive it at least 3 business days before signing (federal TRID rule).
Contingency Contract clause allowing you to back out without losing earnest money (inspection, financing, appraisal, title, etc.).
Conventional Loan Loan not backed by government. Usually requires 5–20% down and 680+ credit score.
Cooperative (Co-op) Ownership of shares in a corporation that owns the building. Limited inventory in Connecticut, mostly in Fairfield County.
CT Green Bank State agency offering Smart-E Loans and rebates for solar, batteries, heat pumps, and energy upgrades.
DAP Loan (Down Payment Assistance Program) CHFA second mortgage at 1% interest to help with down payment and closing costs.
Deed Legal document transferring ownership. Recorded at the town clerk’s office on closing day.
Dual Agency When one agent represents both buyer and seller. Must be disclosed in writing in Connecticut.
Earnest Money Deposit Deposit (usually 1–3%) showing buyer commitment. Held in escrow until closing.
Effective Tax Rate Connecticut’s statewide average is ~1.81% — third highest in the U.S.
Escrow Account holding earnest money and closing funds until all conditions are met.
FHA Loan Government-backed loan with 3.5% down. More lenient credit requirements than conventional.
First-Time Home Buyer CT/HUD definition: anyone who has not owned a home in the last 3 years (exceptions for veterans/disabled).
First-Time Home Buyer Savings Account New 2026 program allowing up to $2,500 (single) or $5,000 (joint) state tax deduction for down payment/closing costs.
Flood Insurance Separate policy required in Special Flood Hazard Areas. Check FEMA maps and the new Connecticut Climate Risk Mapping Tool.
Foundation Condition Report Mandatory seller disclosure in pyrrhotite-risk towns detailing foundation condition.
Historic Homes Rehabilitation Tax Credit 2026 program offering up to 30% credit (max $30,000) for qualified rehabilitation work on historic properties.
Homeowners Insurance Required policy covering dwelling, liability, and personal property. Must be active at closing.
Homestead Exemption Some Connecticut towns offer reduced assessment for owner-occupied primary residences.
HOA (Homeowners Association) Governing body for condos/townhouses. Requires review of bylaws, budget, and reserves before purchase.
Inspection Contingency Contract clause allowing you to inspect and request repairs or cancel.
Lender Bank or mortgage company providing the loan. CHFA-approved lenders are recommended for state programs.
Loan Estimate Document lenders must provide within 3 days of application showing expected costs and rates.
Loan-to-Value Ratio (LTV) Percentage of the home’s value that is financed. Lower LTV = better rates.
Manufactured Home Factory-built home placed on permanent foundation. 2026 law treats them the same as site-built homes in many towns.
Mill Rate Tax rate used to calculate property taxes (1 mill = $1 tax per $1,000 of assessed value).
Mortgage Loan secured by the home. You make monthly payments of principal and interest.
Mortgage Commitment Letter Lender’s written approval of your loan (usually issued 30–45 days after application).
Net Metering System allowing solar owners to receive credits for excess electricity sent to the grid.
Opportunity Area CHFA-designated neighborhood qualifying for higher forgivable down-payment assistance (up to $50,000).
PMI (Private Mortgage Insurance) Required on conventional loans with less than 20% down.
Pre-Approval Lender’s conditional commitment based on your income, credit, and assets. Stronger than pre-qualification.
Property Condition Report (RPC Report) Mandatory seller disclosure form. If not provided, buyer receives $500 credit at closing.
Pyrrhotite Mineral in concrete that causes foundation crumbling. Common in homes built 1980s–early 2000s in certain towns.
Radon Naturally occurring radioactive gas. Connecticut has high levels; testing is strongly recommended.
Rate Lock Agreement to lock your interest rate for 30–60 days while closing.
Real Estate Agent Licensed professional who helps buy or sell. Buyer’s agent works only for you.
Recording Official filing of the deed at the town clerk’s office. Ownership becomes legal upon recording.
Refinance Replacing your existing mortgage with a new one (usually for lower rate or cash-out).
Residential Property Condition Report See “Property Condition Report.”
Septic System On-site wastewater treatment. Requires inspection and pumping schedule in rural areas.
Smart-E Loan Connecticut Green Bank financing for solar, batteries, heat pumps, and energy upgrades.
SmartMove Down-payment assistance program allowing as little as 1% out-of-pocket.
Structural Engineer Professional who evaluates foundation issues (especially pyrrhotite).
Time To Own CHFA’s flagship forgivable assistance program. Up to $50,000 with 10% forgiven each year you stay.
Title Insurance Policy protecting against title defects or claims. Owner’s and lender’s policies required.
Title Search Attorney’s review of public records to confirm clear ownership.
Transfer Taxes State and local taxes paid when recording the deed.
USDA Loan 0% down loan for rural properties meeting income and location requirements.
VA Loan 0% down loan for veterans and eligible service members with no mortgage insurance.
Well & Septic Inspection Required for properties not on public water/sewer. Includes water quality testing.
Zoning Local rules governing property use. Critical for ADUs and manufactured homes.
