NEW BRITAIN — The City of New Britain is accepting applications for a program that grants loans to individuals and families who earn under a threshold income and want to purchase a home.
The funding, which comes from the U.S. Department of Housing and Urban Development, acts as a second mortgage for people who already have taken out loans under Fannie Mae, the Connecticut Housing Finance Authority, the Federal Housing Authority and other programs.
New Britain Mayor Erin Stewart said that in light of the housing boom in Connecticut, she felt it was time to revive the program, which had gone underutilized for a number of years. Stewart said there is currently about $350,000 available to fund the program.
“[We] wanted to advertise this, and advertise the city as a place where we really want people to buy their first home,” said Stewart.
Applicants have to be first-time home buyers with an income below 80 percent of the median income in New Britain – $54,950 for a single person. The loan amounts range from a minimum of $1,000 per dwelling unit to 20 percent of the purchase price of the house.
A young community
Stewart said that the program was ideal for New Britain, a young community where the average age is around 34 or 35, and where most people don’t earn more than $55,000 a year. She said that many of the homebuyers who apply are young families or single moms with two or three children.
Kati Mercier, a civil engineer in New Britain, participated in the program in 2005, when she was a year out of college. She had been living with her parents at the time, and was trying to find a place to live within a half-hour of her job. She said that she felt renting was a waste of money, and she wanted to buy a home.
Mercier said her realtor found the house — a 3-bedroom on Sexton Street. The city had remodeled the interior, and she said she was impressed with how nice it looked.
After marrying and starting a family, she eventually decided to move out of the house in search of a bigger place. However, she stayed in New Britain.
“I don’t know if I would have looked in New Britain if I hadn’t fallen in love with that particular house,” she said.
The application process
Applicants are required to take an eight-hour class on homeownership and to submit documentation from their first mortgage lender, along with W-2 forms from the previous two years.
The loan has a fixed interest rate of three percent and lasts for five years. The minimum payment is $30 per month. The applications are being accepted on a rolling basis.
Mercier said she would recommend the program to other young people. She said she found the application process simple, and that the loan rates were manageable.
Eligible buyers can apply the funding to any 1 to 4 family property in New Britain.
However, the city has also partnered with the Neighborhood Preservation Program to offer specific properties already refurbished by the city to potential homeowners who meet the income thresholds..
In September of this year, New Britain invited potential homeowners to apply for a lottery to purchase 63 or 66 Cottage Place, two homes selling for $155,000 and $150,000, respectively. The department received nine applications for the houses.
Stewart said that the city was looking into more properties that they could rehabilitate beginning in the spring of 2021.
“This is giving people opportunities to buy homes that they wouldn’t be able to afford otherwise,” said Stewart. “It really has the opportunity to transform neighborhoods.”