If you build or rehab small houses around Hartford, this one is worth reading. The Housing Development Fund, a Stamford-based housing lender, is starting a program to help local developers build homes for sale on vacant lots and blighted properties in the city. On top of that, it just got more money to help the buyers who'll move into them.
Patch reported this month that the Greater Hartford Gives Foundation awarded HDF a $500,000 grant to help up to 24 lower-income households in the Hartford area buy their first homes.
The building side
For contractors, the bigger news is HDF's new Homeownership Construction Program. It's backed by a $6 million grant from the state Department of Housing, including $2 million set aside for Hartford, and a separate $2 million grant from the City of Hartford. HDF says the money will support up to 25 new owner-occupied homes in Hartford and help close the gap between what it costs to build a house and what a working family can afford to pay for it.
That gap is the whole ballgame for small builders in the city. If a new house costs more to build than it will sell for in the neighborhood, it doesn't get built. This program is designed to cover the difference.
HDF is teaming up with the City of Hartford and the Hartford Land Bank to offer low-cost, flexible construction financing and grants, mainly to local developers building single-family and multifamily owner-occupied homes. On its page for developers, HDF says the program offers grants of up to $150,000 per unit to cover that gap. It's available for new construction or rehab projects of up to 10 units that are seeking financing through HDF, and Hartford gets additional funds. HDF will also help set affordable sale prices and find income-qualified buyers who have down payment and closing cost help lined up.
That last piece matters. A builder taking on a few infill houses doesn't want to finish them and then go hunting for buyers who can qualify. Having the lender find buyers takes a big risk off the table.
HDF also said it is supporting, or in talks to support, larger affordable homeownership projects in West Hartford, Simsbury and Hartford's Clay Arsenal and Northeast neighborhoods.
The buyer side
The $500,000 grant goes to HDF's Homeownership Equity Fund, which gives zero-interest loans for down payments and closing costs. HDF's announcement put the help at $20,000 per household. To qualify, households must earn 70% or less of the area median income. The average buyer HDF helps in Greater Hartford earns about 58% of the area median.
Since HDF launched the program in July 2022, 133 households have gotten help, including 54 in Greater Hartford. Buyers also get free one-on-one pre-purchase counseling and a six-hour homebuyer course, since HDF is a HUD-certified counseling agency.
"HDF is fortunate to have the Greater Hartford Gives Foundation as a strategic partner in our efforts to help more low-income folks in the Hartford area build wealth through homeownership," said HDF President and CEO Kiley Gosselin.
HDF said its Hartford-area lending has more than doubled over the past three years. On the developer side, the group says it has provided more than $56.8 million in financing to developers who have built over 2,000 housing units.
The need is easy to see. Only 26% of households in Hartford own their homes, according to the foundation's 2026 Equity Report. Across the region, 77% of white households own their homes, compared with 44% of Black households and 35% of Latino households.
"Homeownership is one of the most effective means to build generational wealth, create more stability for families, and promote improved community connections and investments," said Damion Baker, community impact officer at Greater Hartford Gives.
Why it matters for Contractors
This is the kind of program that can keep a small builder or remodeler busy for years. Vacant lots and blighted houses in Hartford need contractors who can build or rehab at a price working families can afford, and HDF is offering both construction financing and gap grants to make the numbers work. The money is aimed mainly at local developers, so Hartford-area contractors who want to take on a few houses as builder-developers should reach out to HDF and the Hartford Land Bank now. And with zero-interest down payment help on the buyer side, there should be people ready to buy the homes once they're done.