Conn. Gen. Stat. § 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.