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Builders urge committee to approve Homes for Connecticut loan guarantee to spur starter homes
Summary
Home builders testified in support of a loan‑guarantee program that would back construction loans to spur starter home production; they said the tool targets lower price points and requires local density and regulatory reforms to succeed.
The Home Builders and Remodelers Association of Connecticut told the Banking Committee that the Homes for Connecticut Loan Program (House Bill 6992) would unlock financing for starter homes by guaranteeing construction loans and making subordinate financing available to builders.
Jim Paris, CEO of the Home Builders and Remodelers Association, said Connecticut faces a severe housing shortage and low housing production rates; the association recommends a $10 million state loan guarantee fund to encourage lenders to make higher loan‑to‑value loans for new for‑sale housing targeted at first‑time buyers and workforce households.
Why it matters: Testifiers said increasing supply of starter homes would expand homeownership, help younger families build generational wealth, and relieve rental pressures. Builders emphasized the program is intended for for‑sale starter and attached housing — townhomes, small detached units and planned unit developments — rather than large single‑family lots.
Key details from testimony: The program would back private lending and aim to reduce financing barriers. Builders said typical construction loan LTVs now are around 70% and noted current construction financing rates are high (witnesses cited base rates of 8–10% and out‑the‑door borrowing costs approaching 12% once fees are included). Speakers said the program should not replace private risk‑sharing; lenders and builders must still have “skin in the game.” Paris cited a Partnership for Strong Communities estimate that Connecticut needs roughly 37,000 additional housing units to meet demand.
Questions and cautions: Committee members pressed builders on where the program will be practical. Testifiers said success depends on density, municipal willingness to allow attached product, and local capacity for projects; they urged program simplicity to avoid bureaucratic hurdles that would deter small, for‑profit builders. One senator asked whether lending conditions here differ materially from other states; witnesses said higher local regulatory costs and land‑use constraints — not financing alone — explain Connecticut’s lag in housing production.
Quotes: “By removing financial barriers for home builders, this program will accelerate the production of new homes, especially in areas that currently lack workforce housing,” said Jim Paris, CEO of the Home Builders and Remodelers Association of Connecticut.
Ending: Builders asked lawmakers to move the measure forward while continuing to coordinate with bankers, local officials and housing partners to target density, keep application processes simple, and ensure the program complements other financing tools. No committee vote was taken during the Feb. 27 hearing.
