Loans for residential structures with not more than four dwelling units (Repealed)

(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 32-317-2 (e) (3) and (4) of these regulations. (b) Loan Limits. The loan shall not be less than four hundred dollars ($400) and not more than six thousand dollars ($6,000) 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 as established by section 32-317(b) of the General Statutes. The range shall be applied to applicants in accordance with a formula which reflects their income. (e) Underwriting. All eligible persons shall meet the following underwriting criteria: (1) Income/Debt 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 (debt), including the Energy Conservation Loan. (2) Saving/Payment Ratio. Eligible persons whose adjusted gross income is no more than 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 in regulations adopted by the secretary of policy and management under section 16a-14 of the General Statutes, is at least ten (10%) greater than the energy loan monthly payment. In 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 in regulations adopted by the secretary of policy and management under section 16a-14 of the General Statutes. In the case of an inoperable heating system, the Energy Conservation improvement shall be considered cost effective when determining the net savings. (3) Income. (A) Eligible person(s) shall identify and verify the amount and source of all income, including that from primary and/or other employment, that is necessary to meet the debt-to-income ratio. (B) Primary Employment. (i) The commissioner shall require the eligible person(s) to provide verification of current employment and copies of federal income tax returns as filed with the Internal Revenue Service. (ii) Overtime income shall be verified as likely to continue by using: year to date earnings; proof of continuous history of overtime working for the same 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 CPA or a qualified accountant showing a minimum of one year in business as indicated on the federal income tax return; a copy of the tax return is to be provided with the loan application. Only net business income will be counted. (iv) Bonuses or commissions shall have been received for the past two years and from the applicants present employer. An average of the last two years generally shall 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 the eligible person has had a verifiable second job in the recent past. (D) Income shall include alimony, child support or child maintenance payment, (receipts) only to the extent that they are likely to be received consistently. 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 payment; 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 obligor, including the credit history of the obligee where available. (E) Social Security payments 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. Proof of rental income will be in the form of federal income tax returns and/or copies of canceled checks for a minimum of six months and a copy of the tenant's lease (ii) Net rental income shall be used for investment properties. Such properties shall have been owned for a minimum of one year with at least six months reflected on the investment rental analysis of the federal income tax return (Schedule E). (G) Interest and dividends may be counted and verified from the applicant's tax return from the last two years and is likely to continue at a similar amount. (4) Countable Obligation. 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; (D) Condominium fees and other association assessments. (5) Credit requirement and grounds for rejection: (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 explanation for previous poor credit, bankruptcies, delinquencies, collections, and/or creditor write-offs 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 applicant: (i) has a history of continued payment delinquencies in the year prior to the date of application; (ii) had an account in collections in the year prior to application; (iii) had an account written off to profit and loss, bankruptcy or creditor write-off within the past four (4) years; (iv) and has not reestablished good credit and/or a good credit report within the past two (2) years; or (v) has property taxes and/or assessments which are not current with city, town or state government. (f) Loan Security. Pursuant to sections 32-315 to 32-318, inclusive, of the General Statutes, the State shall have a lien on each property for which a loan has been made in order to ensure compliance with the terms and conditions of such loan. (g) Condominium and/or Co-op - type home ownership shall require the approval and permission from its association/governing board to make any exterior and/or interior improvements; a copy of the governing board's resolution and authorization shall be included with each application.