Live Where You Work Mortgage Finance

1. PROGRAM DESCRIPTION
The program offers home buyers who will live and work in a Live Where You Work participating municipality a low-interest 30 or 40 -year fixed-rate first mortgage from the New Jersey Housing and Mortgage Finance Agency together with Live Where You Work down payment assistance and/or closing costs in an amount equal to 5% of the first mortgage loan. Municipalities must be approved by the Agency to participate in the program. In consideration of the anticipated commuting costs savings, the underwriting guidelines for borrowers’ housing and overall debt ratios (the portion of a borrower’s gross income permitted to be paid toward monthly mortgage payment and other debts) will be expanded by 3% over the usual Agency underwriting limits giving borrowers significantly more buying power. Property location requirements apply (See “Eligible Properties” below).

2. DOWNPAYMENT/CLOSING COST ASSISTANCE
Live Where You Work borrowers are eligible to receive Live Where You Work down payment and/or Closing Cost assistance in an amount equal to 5% of the Agency’s first mortgage amount.

3. LWYW FIRST AND SECOND MORTGAGE LOANS
(TWO INCOME CATEGORIES):

a. For borrowers with household incomes under 80% of the county maximum income limit for the county of purchase (refer to the Income Limit and Purchase Price sheets attached) the first mortgage rate is the prevailing Agency Home Buyer program rate at the time of loan registration.* such borrowers will sign a LWYW second note and mortgage that will be secured by a 7-year (84 month) non-amortizing mortgage bearing the same interest rate as the first mortgage. However, at the end of the 48th month and each 12 months thereafter 25% of the principal on the note will be deemed satisfied and the remaining balance will be re-amortized until at the end of the 84th month the mortgage obligation will be fully discharged.

b. For borrowers with household incomes at or above 80% of the county maximum income limit for the county of purchase the First Mortgage rate is the prevailing Agency Home Buyer program rate at the time of loan registration plus 5/8% of a percent.* Such borrowers will sign a LWYW second mortgage and note secured by a 4-year (48 month) non-amortizing mortgage bearing the same interest rate as the first mortgage. However, at the end of the 12th month and each 12 months thereafter 25% of the principal on the note will be deemed satisfied and the remaining balance will be re-amortized until at the end of the 48th month the mortgage obligation will be fully discharged.
*The 40-year mortgage note rate is 1/8% higher than the 30-year rate

4. FEES
Borrower must pay 1% of the loan amount at time of application plus a reasonable application fee (see #8 Charges to Borrower). The lender will reimburse the 1% to the borrower at the time of closing. This is a 0 point loan.

5. ELIGIBLE PROPERTIES
Properties must be located in a participating Live Where You Work municipality. Eligible properties include one-family units, including condominiums, (new and existing), and existing 2- to 4-family unit properties that are more than 5 years old. Some Live Where You Work municipalities include Urban Target Areas. In Urban Target Areas, eligible properties can also include new two-unit residential dwellings. Properties must be located in State designated Smart Growth locations. To determine if your proposed house is located in a Smart Growth area, visit www.njlocator.gov and choose “HMFA Program Eligibility”. Urban Target Areas are located within the 42 municipalities listed on the attached Income Limit/Purchase Price Sheet. Only properties located in approved Live Where You Work municipalities are eligible for the LWYW program benefits.

6. BORROWER ELIGIBILITY
Individuals only. Corporations and partnerships are not permitted to act as borrowers. At least one of the borrowers must verify that their place of employment is located in the participating municipality. Borrowers purchasing properties located in “Statewide Areas” must be first-time home buyers. Borrowers purchasing properties located in Urban Target Areas do not have to be first-time home buyers, however, at the time of loan closing, no other residential properties may be owned. To determine if the proposed house is located in a Statewide Area or an Urban Target Area please see the attached Income Limit/Purchase Price Sheet.

7. OCCUPANCY
Property must be occupied as the borrower’s primary residence within 60 days of closing. Borrower must maintain occupancy for the life of the Agency’s first mortgage loan.

8. INCOME GUIDELINES
Borrower’s household income may not exceed the income limit set for the county in which the property is located. Maximum permitted income is determined by family size, as well as area of purchase, as listed on the attached Income Limit/Purchase Price Sheet.

9. CHARGES TO THE BORROWER
Borrowers will be charged an application fee when the application is taken. This fee will cover the cost of the credit report(s), appraisal, flood certification or other customary third-party expenses and administrative costs incurred during processing.

10. PURCHASE PRICE LIMITS: Maximum purchase price limits exist for both Statewide and Urban Targeted Areas (Please see attached Income Limit/Purchase Price sheet).

11. MORTGAGE INSURANCE
The following coverage is required on all conventional loans when the loan-to-value exceeds 80% and is determined by the size of the down payment. 100% to 97.01 LTV 40% coverage regardless of loan term. (Applies to one family units only.) 97% to 95.01% LTV 35% Coverage for a 30 year term 95% to 90.01% LTV 30% coverage regardless of loan term 90% to 85.01% LTV 25% coverage regardless of loan term 85% to 80.01% LTV 12% coverage regardless of term Loans processed under the FHA, VA and/or RECD guidelines must have the appropriate insurance or guarantee.

12. APPLICATIONS and PARTICIPATING MUNICIPALITIES Applications for Live Where You Work loans can be made through any of the Agency’s participating Home Buyer Program lenders. The current list of lenders and Live Where You Work Participating Municipalities is available on www.livewhereyouwork.nj.gov or by calling 1 (800) NJ-HOUSE.