Connecticut Administrative Code › Title 16a - Planning and Energy Policy › 40b - Energy Conservation Material Standards for Residential Buildings › Energy Conservation Loan Program › Section 16a-40b-8 - Loans for residential structures with not more than four dwelling units

Current through July 10, 2024
(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
(D) Condominium fees.
(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.