100% Financed Mortgages – CHFA Helping To Stabilize the Local Real Estate Marketplace

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The Connecticut Housing Finance Authority (CHFA) has a program in place designed to assist homeowners or potential homeowners with the purchase of distressed properties.  The program, called the Homeowners Equity Recovery Opportunity Program (or HERO) provides for several concessions that would allow the buyer to purchase a short sale or bank-owned property with reasonable ease.

Very Little Money Down

Like most FHA loans, buyers would only have to pay 3.5% down on a CHFA HERO financed purchase – an amount that is very doable for most prospective buyers these days, especially in light of the current economic downturn.

Down Payment Assistance

An added benefit of the program is that buyers that qualify for down payment assistance may be able to finance that portion of the purchase as well, effectively making the home purchase 100% financed.

More Distressed Properties Sold Equals Marketplace Stabilization

As the CHFA website states, the program is “designed to support neighborhood stabilization by providing first mortgage financing to encourage first-time homebuyers and existing homeowners to purchase and/or purchase and rehabilitate foreclosed or abandoned properties including properties conveyed by deed in lieu of foreclosure or short sale.” Buyers can qualify for this loan only for the potential purchase of distressed properties.

Newly Expanded Rules Makes for Broader Range of Buyers

The HERO program was conventionally available only for first time homebuyers but the rules have since expanded, allowing existing homeowners to also fall under the umbrella of qualified applicants of this financing program.  This opens up the realm of possibility to a much wider range of homebuyers.

Own and Rent at the Same Time and Still Qualify for HERO

If you are looking for either a short sale or a bank-owned property, and you want to be an owner-occupant and move into that home,  CHFA will allow you to keep your existing home and while using up to 85% of your net rental income from your existing home to qualify on your next loan to purchase the second home and move into it.  In other words, you can own two properties at the same time, using your existing/current home to qualify your second purchase.  By tapping into the rental income potential of the first property, you will have then strengthened your investment portfolio significantly.

Lower Than Average Interest Rates

Though as a nation we are already used to seeing the all-time low interest rates that have made international headlines across the board, the benefit of the CHFA HERO loan program is that rates are even lower than many other markets.  Since the rates do fluctuate, the most accurate rate quote will come from a loan officer, but the fact is that when you combine all other factors of the HERO program along with the low, low rates – the opportunity is an amazing one!
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To learn more about CHFA, check out their website here or if you want to read  specifically about the HERO financing program visit this link.

The Home Warranty Advantage; Providing Assurance to the Buyer and Peace of Mind to the Seller

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Homeowners Insurance is great – it covers a lot of things like fire, theft and vandalism – and in case there is a storm that causes significant damage, the policy’s right there to protect the owner.  But what about a policy that looks after the interests of the property while it listed on the market and one that works to the advantage of both sides of the buying and selling fence?  A home warranty is a perfect supplement to a homeowner’s insurance policy and it broadens the overall coverage in a variety of ways.  Here is a rundown of the variances between the two and how a seller getting a warranty policy on their home for sale is a great tool!

The Benefits of a Home Warranty Policy

While home insurance largely covers catastrophic incidences and damage, a home warranty policy goes far beyond in that it address the home including wear and tear items.  Also, maintenance and repair is typically includes in a home warranty policy.  As a selling tool, this is fantastic, because during the process – or even after the home is sold – for up to 13 months, the areas of the home covered under the policy are warranted.  Oftentimes, a buyer will come across an issue with something in the home that could become a deal breaker but with the added peace of mind of a warranty, the seller can sit back and relax knowing that most things will likely be covered.  Examples of things that fall into range of coverage on a home warranty are flooring, plumbing systems, electrical systems, and wear and tear of these areas plus also the furnace and in come cases, the roofing or other major components of the home.

Home Insurance Policy Advantages

The single biggest difference between a home warranty versus a home owners insurance policy is that the latter covers the basic replacement value in general if there is a major catastrophe such as a storm that cause damage, fire, theft or vandalism or personal liability.  There is not personal liability coverage under the home warranty policy, rather it focuses on the “used” contents of the home.


How a Home Warranty Policy Helps in a Real Estate Transaction

Home Warranty of America is a company that provides very good coverage under their policy (for a list of their benefits, click here) including 13-months of free seller coverage, with coverage beginning on the first of their home being listed for sale.  The free coverage period for the seller lasts for up to 180 days and the policy is only paid for upon sale of the home at closing.  The best part of a home warranty policy is that even after the buyer has taken possession of the property, the coverage continues.  That means that as a seller, you will not have to contend with any last minutes issues that can and do come up. When applying for the warranty, be sure to choose coverage that address all potential concerns you may have for the home so that if there were a need for repairs or coverage, you would have it provided as a benefit.

An industry association held a study in which it was determined that not only do homes sell up to 50% faster when there is a home warranty policy in place, but also the selling price typically comes within three percent of the list price.  In today’s real estate market – this is an advantage that any seller would want to avail!