House Bill No. 5314 proposes amendments to the "Homes for CT" loan program, which is administered by the Connecticut Housing Finance Authority (CHFA) to assist owners and developers in securing funding for residential construction. The bill modifies the interest rate cap for loans under this program, changing it from the Federal Home Loan Bank of Boston's New England Fund rate to the prime rate published by The Wall Street Journal on the date the borrower locks in the rate. Additionally, it allows CHFA to provide loans that may be amortizing, deferred, or forgivable regarding principal and interest, and introduces the option for CHFA to issue grants to eligible borrowers, contingent on terms set by the authority.

Furthermore, the bill stipulates that CHFA's ability to make these loans and grants is limited to the resources allocated by the State Bond Commission. It repeals and replaces existing legal language in sections 8-265ccc and 8-265eee of the general statutes, effectively removing outdated references and ensuring that the program aligns with current financial practices. The changes are set to take effect on July 1, 2026, and aim to enhance the program's flexibility and accessibility for borrowers involved in residential development.