Section 16a-40b-8 - Loans for residential structures with not more than four dwelling units(a)Income Limit. All eligible persons shall submit evidence, satisfactory to the Commissioner, that their adjusted gross income is not in excess of the amount established as the income limit in Section 16a-40b(b) of the General Statutes.(b)Loan Limits. The loan shall not be less than four hundred dollars ($400) and not more than six thousand dollars ($6000) per structure.(c)Term. The term of the loan shall not exceed ten years.(d)Interest Rates. The State Bond Commission shall establish a range of rates of interest payable on all loans for residential structures containing not more than four dwelling units. The range shall be applied to applicants in accordance with a formula which reflects their income.(e)Underwriting. All eligible persons must meet the following underwriting criteria: (1) Income Ratio. Not more than thirty-nine percent (39%) of gross income shall be applied to payments of the first mortgage, taxes, homeowners insurance and all countable obligations, including the Energy Conservation Loan.(2) Saving/Payment Ratio. Eligible persons whose adjusted gross income is (115%) of median area income adjusted for family size, as determined from time to time by the U.S. Department of Housing and Urban Development, and who do not qualify for a loan under subdivision (1) above may qualify if the energy conservation improvements financed by this loan result in net savings, as projected by a technical energy audit performed according to standards set by the Office of Policy and Management, at least ten percent (10%) greater than the energy loan monthly payment. In the case of multiple improvements, the net savings is the sum of the normalized savings from individual measures as projected by a technical energy audit performed according to standards set by the Office of Policy and Management. In the case of inoperable heating systems, the Energy Conservation improvnts shall be considered cost effective in order to determine the net savings.(3) Income. (A) Eligible person(s) shall identify the amount and source of all income. All income other than that from primary employment that is necessary to meet the income ratio shall be verified.(B) Primary Employment (i) The commissioner shall require the eligible person(s) to provide copies of federal income tax returns as filed with the Commissioner of Internal Revenue.(ii) Overtime shall be verified as likely to continue by the following: year to date earnings; previous history of overtime in this company and Department; and last year's overtime income.(iii) Self-employed eligible person(s) shall submit a profit and loss statement prepared by a qualified accountant or CPA showing a minimum of one year in the business. Only net business income will be counted.(iv) Bonuses or commissions must have been received for the past two years in present employment or present and past employment. An average of the last two years shall generally be used.(C) Income from second jobs may be counted if verified as permanent and likely to continue. The Commissioner may accept new second job income if verified as permanent and if the eligible person has had a verifiable second job in the recent past.(D) Income shall also include alimony, child support or maintenance receipts only to the extent that they are likely to be consistently received. Factors to be considered in determining the likelihood of consistent payments include, but are not limited to: whether payments are received pursuant to a written agreement or court decree; the length of time payments have been received; regularity of receipt; availability of procedures to compel payment; whether full or partial payments have been made; the age of any child for whom child support is to be paid; and the credit worthiness of the obligee, including the credit history of the obligee where available.(E) Social Security and pensions shall be verified.(F) Income from Rents. (i) One hundred percent (100%) of rental income shall be added to the eligible person's gross income where the residential dwelling is owner-occupied.(ii) Net rental income shall be used for investment properties. Such properties must have been owned for a minimum of one year with at least six months reflected on the investment rental analysis.(G) Interest and dividends may be counted if verified.(4) Countable Obligations. Countable obligations shall include, but are not limited to:
(A) All installment debts and credit union loans with ten or more months remaining from date of closing and all monthly interest charged on demand notes;(B) Five percent (5%) of the balance of all revolving credit per month;(C) Court-ordered alimony, child support or maintenance payments; and(5) Credit. (A) All applications for loans shall be accompanied by a written credit report obtained not more than six months prior to the date of application.(B) Written explanations for previous poor credit and/or bankruptcies shall be included with the loan application.(C) Grounds for rejection of any application shall include, but are not limited to, situations where an eligible person has a history of continuing delinquencies in the year prior to the date of application, has an account in collections, or has had an account written off to profit and loss.(f)Loan Security. Pursuant to Section 16a-40b of the Connecticut General Statutes, the state shall have a lien on each property for which a loan has been made to ensure compliance with the terms and conditions of such loan.Conn. Agencies Regs. § 16a-40b-8