Who this fits in Connecticut
- Fairfield County independents. Advisers who went RIA, former fund analysts consulting on their own, executive coaches and boutique firms in Greenwich, Stamford, Westport and Darien. Income is high and irregular — a few large quarterly or annual payments — and the S-corp return is written to minimize it.
- Defense and aerospace subcontractors. Machine shops, engineering firms and 1099 specialists around Electric Boat in Groton, Sikorsky in Stratford and Pratt & Whitney in East Hartford. Lumpy contract payments, heavy equipment depreciation.
- Practices and professionals. Physicians and dentists in private practice along the shoreline and around New Haven and Hartford; attorneys and architects in small partnerships.
- The trades. Contractors, restoration specialists and landscapers who work on housing stock that predates the Revolution and never stops needing work.
What is specific to a Connecticut file
- Property taxes are a large carrying cost. Connecticut's mill rates are among the highest in the country, and the monthly tax figure is counted alongside the mortgage when the deposits are checked against obligations. High-tax towns do not disqualify anyone; the deposits simply need to cover them.
- No state tax on recording the lien. Connecticut's conveyance tax applies to the sale of property, not to a mortgage. A home equity line involves town recording fees only.
- Older housing gets a property review, not an income review. A 1790 colonial in Litchfield County is eligible; the review looks at condition and insurance, and the deposits are unaffected. In the northeastern towns affected by pyrrhotite foundations, expect a question about the foundation.
- Shoreline homes. Flood coverage is confirmed on coastal property from Greenwich to Stonington. In-force coverage is what is needed.
- Second homes in the northwest corner qualify with lower maximums than a primary residence. Which home is primary follows where you spend the majority of the year.
The RIA problem, specifically
An adviser who left a wirehouse and now runs a registered investment adviser earns advisory fees deposited monthly or quarterly, pays a modest salary through the S-corp, and takes the rest as distributions after a defined-benefit plan contribution designed to shelter as much as possible. The personal return can show a third of what the firm deposits. A bank underwriter uses the return. This program uses the firm's deposits, and the plan contribution that made the return look thin is irrelevant to it.
Common questions
My town's property taxes are very high. Does that reduce what I can borrow?
The monthly tax is counted as an obligation alongside the mortgage; the deposits need to cover it. It does not change the equity calculation.
I'm an RIA and most of my income is distributions. What counts?
The 12 months of advisory-fee deposits into the firm's account. Not the salary, not the K-1.
Is there a Connecticut conveyance tax on a HELOC?
No. The conveyance tax applies to sales. Recording a home equity line involves town recording fees only.
Our house is a 1780s colonial. Is that a problem?
No. Age is a property-review question — condition and insurance — not an income question. Most Connecticut housing stock is older and most of it is eligible.