Here's how I calculated the payment.  The following calculations are based on today's interest rate of 5.5% with a 1% loan origination fee and a sale price of $149,900.

The Connecticut Housing Finance Authority, or CHFA for short, is the agency that runs the program.  The details are at: http://www.chfa.org/FirstHome/firsthome.asp. 

Here's a brief summary based on the information on their website.  By the way, I'm not a loan officer or a CHFA employee, just someone who read their website.   I did however, make every effort to get my facts right.  But, none of this information I provide here is legally binding.  You have to talk with the CHFA, a bank, or a mortgage company to get all of the details.

What is the interest rate?

The interest rate as of 8/29/03 is 5.5% for the mortgage, and 5.5% for the down payment loan.  If you are a teacher, police officer, or in the military, the rates may be lower.  Bankrate.com says the average rate in Connecticut today is 6%, so the CHFA rate is 1/2% less. Today's CHFA rate has a 1% origination fee.  That means when you close the loan, you pay a one time fee of 1% of the sales price.  But again, they will finance that.  The rate varies, so click here for today's rate.

How do I qualify?

First, there are income limits.  If there are 1 or 2 people in your family, you can't make more than $72,500 a year.  If there are more than 3 in the family, then the limit is $83,375.

On the other hand, you have to make enough.  This depends on your income and debt (credit cards, car loans, or other loans).   The CHFA has a calculator that will give you an idea of what size mortgage you can handle.   Whatever the calculator says you can afford a month, add the $600 you'll get from the rent of the first floor apartment.  For example, let's say you and your spouse make $25,000 per year, pay $250 a month in loan payments, and have $5000 to put down.  The CHFA's calculator says you can afford a payment of $604.16.  Now, add to that the $600 rental income, and you can afford $1204.16 per month.  That's more than the $1080.58 per month that this house would cost you, which is good!

Second, you have to live in the building yourself.  You can't just rent out both apartments.

Third, the sale price can't be over $151,000 in Windham County.  (The limit varies by county.)  Well, you are set there.  The price of 40 Lebanon is only $149,900.

Fourth, I'm going to quote this one directly from the CHFA website's question and answer section:

Q. Is the CHFA program only for first time homebuyers?
A. No. If you have not owned a principal residence for the past three years you may be eligible to utilize the program. If you have owned a principal residence in the past three years, you still may be eligible to utilize the program if the home you purchase is in a federally targeted area of the State.

I think the house is in one of the federally targeted areas, but I'm not sure. So, if you need to know this, you can ask the bank when you talk to them.

Fifth, you have to stay in the house a while.  Basically, if you sell the house before 9 years, they may hit you with a Federal Recapture Tax.

Sixth, your credit has to be acceptable.  Here's how CHFA words it:

    Borrowers are qualified for a loan based on their income, assets,
    and credit history.  The applicant's income must be sufficient to
    cover monthly mortgage     payments, real estate estate taxes, 
    insurance, and all existing long-term debt.  Adequate funds must
    be available to pay the downpayment and closing costs unless a
    Downpayment Assistance Program loan will be used.  The borrower's
    credit history must show prudent use of credit and timely repayment
    of debts.
 

I'm interested, now what do I do? 

Contact a participating lender.  Don't worry the list of lenders is long, including the major banks in the area, so there should be one near you.