Sec. 8-265bbb. “Homes for CT” loan program.
Sec. 8-265eee. Additional loans to eligible borrowers by authority.
Sec. 8-265fff. Memorandum of understanding re “Homes for CT” loan program.
Sec. 8-244. Connecticut Housing Finance Authority deemed a public instrumentality and political subdivision. Board membership. Subsidiaries. (a) There is created a body politic and corporate to be known as the “Connecticut Housing Finance Authority”. Said authority is constituted a public instrumentality and political subdivision of this state and the exercise by the authority of the powers conferred by this chapter shall be deemed and held to be the performance of an essential public and governmental function. The Connecticut Housing Finance Authority shall not be construed to be a department, institution or agency of the state. The board of directors of the authority shall consist of sixteen members as follows: (1) The Commissioner of Economic and Community Development, the Commissioner of Housing, the Secretary of the Office of Policy and Management, the Banking Commissioner and the State Treasurer, ex officio, or their designees, with the right to vote, (2) seven members to be appointed by the Governor, and (3) four members appointed as follows: One by the president pro tempore of the Senate, one by the speaker of the House of Representatives, one by the minority leader of the Senate and one by the minority leader of the House of Representatives. The member initially appointed by the speaker of the House of Representatives shall serve a term of five years; the member initially appointed by the president pro tempore of the Senate shall serve a term of four years. The members initially appointed by the Senate minority leader shall serve a term of three years. The member initially appointed by the minority leader of the House of Representatives shall serve a term of two years. Thereafter, each member appointed by a member of the General Assembly shall serve a term of five years. The members appointed by the Governor and the members of the General Assembly shall be appointed in accordance with section 4-9b and among them be experienced in all aspects of housing, including housing design, development, finance, management and state and municipal finance, and at least one of whom shall be selected from among the officers or employees of the state. At least one shall have experience in the provision of housing to very low, low and moderate income families. On or before July first, annually, the Governor shall appoint a member for a term of five years from said July first to succeed the member whose term expires and until such member's successor has been appointed, except that in 1974 and 1995 and quinquennially thereafter, the Governor shall appoint two members. The chairperson of the board shall be appointed by the Governor. The board shall annually elect one of its appointed members as vice-chairperson of the board. Members shall receive no compensation for the performance of their duties hereunder but shall be reimbursed for necessary expenses incurred in the performance thereof. The Governor or appointing member of the General Assembly, as the case may be, shall fill any vacancy for the unexpired term. A member of the board shall be eligible for reappointment. Any member of the board may be removed by the Governor or appointing member of the General Assembly, as the case may be, for misfeasance, malfeasance or wilful neglect of duty. Each member of the board before entering upon such member's duties shall take and subscribe the oath of affirmation required by article XI, section 1, of the State Constitution. A record of each such oath shall be filed in the office of the Secretary of the State. Each ex-officio member may designate such member's deputy or any member of such member's staff to represent such member at meetings of the board with full power to act and vote on such member's behalf.
(b) Notwithstanding the provisions of any other law to the contrary, it shall not constitute a conflict of interest for a trustee, director, partner or officer of any person, firm or corporation, or any individual having a financial interest in a person, firm or corporation, to serve as a member of the authority, provided such trustee, director, partner, officer or individual shall abstain from deliberation, action or vote by the authority in specific respect to such person, firm or corporation.
(c) (1) The authority may incorporate one or more subsidiaries and may transfer to any subsidiary any moneys, real or personal property, of any housing financed by a mortgage of the authority or by the Connecticut Housing Authority and acquired as a result of a foreclosure or otherwise. Each subsidiary shall have all the privileges, immunities, tax exemptions and other exemptions of the authority, except the privileges, immunities, tax exemptions and other exemptions provided under the general statutes for special capital reserve funds. Each subsidiary shall be subject to suit and liability solely from the assets, revenues and resources of the subsidiary and without recourse to the general funds, revenues, resources or any other assets of the authority. Each such subsidiary is authorized to assume or take title to housing subject to any existing mortgage and to mortgage, convey or dispose of its assets and pledge its revenues in order to secure any borrowing, for the purpose of refinancing, rehabilitating or improving its assets, provided each such borrowing or mortgage shall be a special obligation of the subsidiary, which obligation may be in the form of bonds, bond anticipation notes and other obligations to the extent permitted under this chapter, to fund and refund the same and provide for the rights of holders thereof, and to secure the same by pledge of revenues, notes and mortgages of others, and which shall be payable solely from the assets, revenues and other resources of the subsidiary and provided further no such mortgage, borrowing or pledge of security eliminates requirements relating to housing that preserve housing for persons and families of low and moderate income without the express written consent of the authority. Such borrowing shall be in accordance with subsections (b) to (m), inclusive, of section 8-252, provided no such subsidiary shall be entitled to borrow for any purpose except with respect to property transferred to such subsidiary by the authority specified in subsection (a) of said section 8-252.
(2) Each subsidiary shall have a board of directors and at least one-half of the board of directors of each subsidiary shall be members of the board of directors of the authority, or their designees or officers or employees of the authority. A resolution of the authority shall prescribe the purposes for which each subsidiary is to be formed.
(3) The provisions of subsection (b) of this section and sections 8-245, 8-247 and 1-125 shall apply to any officer, director, designee or employee appointed as a member, director or officer of any such subsidiary. Any such persons so appointed shall not be personally liable for the debts, obligations or liabilities of any such subsidiary provided in section 1-125. The subsidiary shall and the authority may provide the indemnification to protect, save harmless and indemnify such officer, director, designee or employee as provided by said section 1-125.
(4) The authority or subsidiary shall take such actions to comply with the provisions of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, to qualify and maintain any such subsidiary as a corporation exempt from taxation under said Internal Revenue Code.
(5) The authority is permitted to make housing mortgage loans to each such subsidiary, following standard authority procedures, from the proceeds of its bonds, notes and other obligations provided the source and security for the repayment of such mortgage loans is derived from the assets, revenues and resources of the subsidiary and without recourse to the general funds, revenues and resources pledged under its general housing mortgage finance program bond resolution.
(1969, P.A. 795, S. 4; 1971, P.A. 840, S. 1; 1972, P.A. 208, S. 3; P.A. 73-679, S. 36, 43; P.A. 74-104, S. 5, 12; P.A. 76-41, S. 1, 3; P.A. 77-614, S. 19, 161, 593(b), 610; P.A. 79-598, S. 22; P.A. 80-482, S. 3, 345, 348; P.A. 87-9, S. 2, 3; P.A. 88-225, S. 7, 14; 88-266, S. 4, 46; P.A. 94-148, S. 2, 3; P.A. 95-250, S. 1, 24, 42; 95-309, S. 11, 12; P.A. 96-211, S. 1, 5, 6; P.A. 03-84, S. 8; P.A. 11-140, S. 8; P.A. 13-234, S. 33; P.A. 19-192, S. 12; P.A. 25-174, S. 130.)
History: 1971 act deleted provisions for first appointments and allowed treasurer to designate deputy or staff member to represent him at authority meetings; 1972 act substituted Housing Finance Authority for Mortgage Authority, made designated state officers ex-officio members and replaced specific membership requirements re housing finance expertise and state and municipal finance expertise with general provision that members be experienced in “all aspects of housing design, development, finance” etc., (but not applicable to “membership as it exists on May 18, 1972”), required that chairman and vice chairman be selected from appointed members and replaced specific provisions allowing treasurer and commissioner of finance and control to designate stand-ins with provision allowing all ex-officio members to do so; P.A. 73-679 removed director of budget as member of authority; P.A. 74-104 changed number of appointed members from five to six, added provisions concerning members selected from officers or employees of state and deleted reference to membership in existence on May 18, 1972; P.A. 76-41 included bank commissioner as ex-officio member; P.A. 77-614 substituted secretary of the office of policy and management for commissioner of finance and control and, effective January 1, 1979, substituted banking commissioner for bank commissioner and made banking department a division within the department of business regulation and substituted commissioner of economic development for commissioner of community affairs; P.A. 79-598 substituted commissioner of housing for commissioner of economic development; P.A. 80-482 restored banking division as an independent department, retaining commissioner as its head; (Revisor's note: Pursuant to P.A. 87-9, “banking commissioner” was changed by the Revisors to “commissioner of banking”); P.A. 88-225 added Subsec. (b) re when a financial interest and membership on the authority do not constitute a conflict of interest; P.A. 88-266 inserted reference to governmental function, specified that authority is not a department, institution or agency of the state, repealed requirements that governor's appointments be made with advice and consent of senate and that one of governor's appointees be a state officer or employee, required chairperson to be appointed by governor with advice and consent of general assembly, instead of by authority members, and established board of directors as governing body of the authority; P.A. 94-148 added Subsec. (c) regarding establishment of subsidiaries, effective May 24, 1994; P.A. 95-250 amended Subsec. (a) to increase the size of the board from 10 to 15 members, adding one gubernatorial appointee and four by General Assembly, requiring that one of the members appointed by the Governor have experience in providing housing for very low, low and moderate income families and, with P.A. 96-211, replacing the Housing Commissioner with the Commissioner of Economic and Community Development and amended Subsec. (c)(1) to transfer to subsidiaries housing financed by the Connecticut Housing Authority and provide that subsidiaries have the privileges, immunities and exemptions of the authority except those provided for special capital reserve funds, effective July 1, 1995; P.A. 95-309 changed effective date of P.A. 95-250 but did not affect this section; P.A. 03-84 amended Subsec. (a) by changing “Commissioner of Banking” to “Banking Commissioner” and making technical changes for the purposes of gender neutrality, effective June 3, 2003; P.A. 11-140 amended Subsec. (a) to designate Commissioner of Economic and Community Development as chairperson of the board and delete provision re chairperson to be appointed by Governor with advice and consent of General Assembly, effective July 8, 2011; P.A. 13-234 amended Subsec. (a) by changing number of members of board of directors from 15 to 16, adding Commissioner of Housing to board as ex-officio member, adding “or their designees” and changing designation of chairperson from Commissioner of Economic and Community Development to appointed by Governor, effective June 19, 2013; P.A. 19-192 amended Subsec. (a) to add reference to Secs. 8-265tt to 8-265xx, effective July 8, 2019; P.A. 25-174 amended Subsec. (a) to add reference to Secs. 8-265aaa to 8-265fff, effective June 30, 2025.
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Sec. 8-265aaa. Definitions. As used in this section and sections 8-265bbb to 8-265fff, inclusive:
(1) “Authority” means the Connecticut Housing Finance Authority created under section 8-244;
(2) “Bank” means a bank or an out-of-state bank, each as defined in section 36a-2;
(3) “Credit union” means a Connecticut credit union or a federal credit union, each as defined in section 36a-2;
(4) “Department” means the Department of Banking;
(5) “Eligible borrower” means the owner or developer of a new construction residential building;
(6) “Eligible financial institution” means a bank or credit union that has a physical presence in this state; and
(7) “Residential building” has the same meaning as provided in section 8-440.
(P.A. 25-174, S. 124.)
History: P.A. 25-174 effective June 30, 2025.
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Sec. 8-265bbb. “Homes for CT” loan program. (a) The authority shall administer a “Homes for CT” loan program to assist eligible borrowers to obtain funding necessary for the construction of residential buildings by guaranteeing the repayment of loans made by eligible financial institutions to eligible borrowers, which loans (1) may have loan-to-value ratios in excess of typical underwriting standards, and (2) shall be subject to any conditions or limitations established by the authority, in consultation with representatives from the banking industry, and published on the authority's Internet web site. Under the program, the authority may also provide to eligible borrowers additional loans that shall be subordinate to the loans made to such eligible borrowers by eligible financial institutions. In accordance with the provisions of subsection (a) of section 8-265ddd, the authority shall process claims for the recovery of the outstanding principal amount of the loans made by eligible financial institutions and submit such claims to the Comptroller for payment. Subject to the cessation of the processing of such claims under subsection (d) of section 8-265ddd, the Comptroller shall pay from the General Fund all such claims that are submitted by the authority.
(b) (1) Except as provided in subsection (e) of this section, any eligible financial institution may participate in the program after providing the department and the authority with advance written notice of the eligible financial institution's intention to participate in the program. Such notice shall be in the form and manner prescribed by the department and the authority, and shall include contact information for the eligible financial institution. Nothing in this section shall be construed to preclude an eligible financial institution that has elected to participate in the program from issuing loans to eligible borrowers outside of the program.
(2) An eligible financial institution may suspend its participation in, or withdraw from, the program after giving advance written notice to the department and the authority that specifies the date when such suspension or withdrawal will become effective, provided such date shall be at least five business days after the date when such notice is given. Such withdrawal or suspension shall not affect the eligible financial institution's ability to submit a guarantee claim on any loan for which the eligible financial institution provided notice to the authority pursuant to subdivision (1) of subsection (d) of this section prior to the effective date of the withdrawal or suspension.
(3) Not later than October 1, 2025, the department and the authority shall each publish on their Internet web sites a summary of the program and a list of the eligible financial institutions that have elected to participate in the program. The list shall be updated from time to time and shall include the contact information of each participating eligible financial institution. The department shall also provide information concerning the program to mortgage servicers licensed pursuant to section 36a-718.
(c) (1) The authority may develop, in consultation with representatives from the banking industry, one or more standard promissory note and mortgage deed forms that may be used by eligible financial institutions making loans pursuant to section 8-265ccc.
(2) Not later than October 1, 2025, the authority shall develop, in consultation with representatives from the banking industry, (A) reasonable standards that an eligible financial institution may rely upon to demonstrate that such eligible financial institution made good faith collection efforts in accordance with the provisions of subsection (a) of section 8-265ddd, and (B) a readily accessible communication portal by which participating eligible financial institutions may verify the most recently available total dollar amount of (i) loans of which the authority has been notified pursuant to subdivision (1) of subsection (d) of this section, and (ii) claims submitted to the Comptroller pursuant to subsection (a) of section 8-265ddd.
(3) The forms and standards developed pursuant to this subsection shall, to the extent feasible, be closely aligned with industry standards, but shall not require post-delinquency collection efforts extending beyond ninety days.
(d) Each eligible financial institution that agrees to make a loan to an eligible borrower pursuant to section 8-265ccc shall:
(1) Not later than one business day after agreeing to make the loan, provide to the authority written notice that specifies the amount of the loan and any other information about the eligible borrower and the loan that the authority may request;
(2) Not later than seven business days after agreeing to make the loan, provide to the authority a copy of the promissory note for such loan and the mortgage deed that secures such promissory note; and
(3) On a monthly basis, provide to the authority a written report disclosing the status of the loan, including, but not limited to, the principal amount, the outstanding balance and the amount of any funds that the eligible financial institution has agreed to lend to the eligible borrower but has not yet disbursed.
(e) When the total amount of loans reported to the authority, including outstanding loans and loans that eligible financial institutions have agreed to make, reaches one hundred million dollars, the authority shall immediately close participation in the program and notify each eligible financial institution participating in the program. A participating eligible financial institution may condition the availability of any loan agreement on the availability of the program.
(P.A. 25-174, S. 125.)
History: P.A. 25-174 effective June 30, 2025.
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Sec. 8-265ccc. Loans by eligible financial institution to eligible borrower under “Homes for CT” loan program. Each eligible financial institution that participates in the program administered by the authority pursuant to subsection (a) of section 8-265bbb may make loans to an eligible borrower under the program, provided:
(1) The eligible borrower (A) demonstrates to the satisfaction of the eligible financial institution that the proposed development of residential buildings meets the standards for such a development, which standards shall be established by the authority, and (B) shall provide to the authority a covenant that each dwelling unit, as defined in section 47a-1, in such residential buildings, when offered for sale to the public, shall be sold only to individuals participating in a homebuyer loan program administered by the authority.
(2) The loan shall (A) be secured by a mortgage deed on the eligible borrower's residential buildings and all related improvements under development by the eligible borrower, (B) be made in accordance with the eligible financial institution's underwriting policy and standards, except that the loan may have a loan-to-value ratio in excess of typical underwriting standards, and (C) bear interest at a rate that does not exceed the applicable rate of the Federal Home Loan Bank of Boston for short-term or long-term advances through the New England Fund program. For the purposes of this subdivision, “applicable rate” means the New England Fund rate that (i) is published on the Internet web site of the Federal Home Loan Bank of Boston as of the date the interest rate is locked in by the eligible borrower and eligible financial institution, and (ii) has an advance term that most closely corresponds to the term of the loan being made by the participating eligible financial institution.
(3) The loan proceeds shall be used by the eligible borrower only for eligible construction expenses. For the purposes of this subdivision, “eligible construction expenses” means (A) expenses that are necessary to (i) complete the construction of a residential building, or (ii) construct any improvements related to a residential building, and (B) any other expenses the authority determines to be necessary.
(P.A. 25-174, S. 126.)
History: P.A. 25-174 effective June 30, 2025.
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Sec. 8-265ddd. Claims by eligible financial institution to authority for recovery of outstanding principal for loan. Maintenance of records. Termination of loan guarantee, when. (a) An eligible financial institution that has made a good faith effort to collect the outstanding principal from a loan made pursuant to section 8-265ccc may make a claim to the authority for recovery of an amount equal to the outstanding principal for such loan. Except as provided in subsection (d) of this section, if the eligible financial institution demonstrates to the satisfaction of the authority that the eligible financial institution made a good faith effort in accordance with the eligible financial institution's loan servicing and collection policies to collect the outstanding principal from the eligible borrower and any person other than the authority who issued a guarantee of the loan and the loan has been delinquent for four consecutive months, the authority shall submit the claim to the Comptroller for payment. Upon payment of a claim by the Comptroller, and as a condition of such payment, (1) the loan, including, but not limited to, any guarantee of the loan issued by a person other than the authority, shall be assigned to the state, and (2) the authority, as agent for the state, shall have the right to continue collection efforts on the loan. Any amount necessary for payment by the Comptroller to honor loan guarantees under this section shall be deemed appropriated from the General Fund, and any funds collected by the authority in accordance with this subsection shall be deposited to the General Fund.
(b) The authority shall maintain records in the regular course of administration of the program, including, but not limited to, a record of loans issued and of payments made to honor loan guarantees issued under this section.
(c) The authority may terminate any loan guarantee if the eligible financial institution misrepresents any information pertaining to the guarantee or fails to comply with any requirement of this section in connection with the guarantee of the underlying loan.
(d) The total amount of claims processed by the authority and paid by the Comptroller to honor loan guarantees under this section shall not exceed ten million dollars. When the total amount of claims processed by the authority and paid by the Comptroller reaches ten million dollars, the authority shall immediately cease to process claims and shall notify the Comptroller and each eligible financial institution participating in the program that the authority has ceased honoring loan guarantees under the program.
(P.A. 25-174, S. 127.)
History: P.A. 25-174 effective June 30, 2025.
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Sec. 8-265eee. Additional loans to eligible borrowers by authority. Under the program administered by the authority pursuant to subsection (a) of section 8-265bbb, the authority may, within available resources, make loans to eligible borrowers that are in addition to the loans made to such eligible borrowers by eligible financial institutions pursuant to section 8-265ccc. The loans made by the authority shall be (1) subordinate to the loans made by eligible financial institutions, and (2) subject to such terms as the authority may establish, including, but not limited to, loan amounts, interest rates and terms to maturity.
(P.A. 25-174, S. 128.)
History: P.A. 25-174 effective June 30, 2025.
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Sec. 8-265fff. Memorandum of understanding re “Homes for CT” loan program. The Comptroller, the authority and the department may enter into a memorandum of understanding to carry out the provisions of sections 8-265aaa to 8-265eee, inclusive.
(P.A. 25-174, S. 129.)
History: P.A. 25-174 effective June 30, 2025.
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