TRENTON — Want to live in the town where you work and get a sweet deal on a mortgage?

The New Jersey Housing and Mortgage Finance Agency (HMFA) has a program called Live Where You Work which offers home buyers who will live and work in a participating municipality a low-interest 30 or 40-year, fixed-rate, first mortgage.

“It affords the opportunity for borrowers/buyers, first time home buyers, to acquire homes with 100 percent financing,” said HMFA spokesman Ed Collins.

The only catch: you must live where you work. If you work in Wildwood, you would be required to purchase a home there, not in Rio Grande or Court House.
Participating municipalities in this county are Wildwood, West Wildwood and Woodbine. Those towns are deemed Urban Target Areas, which allows an applicant to purchase homes with maximum prices as high as the $500,000 to $800,000 price range depending on the size of your family.

Live Where You Work Allows for 100 percent financing consisting of closing costs and/or down payment assistance, he said Collins.
HMFA signs on participating lenders, which are extensively checked before entering the program. Collins said 72 participating lenders range from Wells Fargo to mortgage companies.
The choice of lender is up to the homebuyer. The lenders are listed on the HMFA Web site: www.nj-hmfa.com or call 1-800-NJ HOUSE.
An applicant would apply through the bank they select.

“When it’s all over and done, what we do then is purchase the mortgage from the bank that made the loan,” said Collins.

He said it is not difficult for HMFA to find lenders for the Live Where You Work program even into today’s economic slump.
Collins said an applicant needs a “reasonable credit record” but unlike the mortgage industry that is seeking at least a FICO score of 720, the Work Where You Live program looks at the entire breadth of the applicant’s credit report.

“We make sure the borrowers are good borrowers, we make sure the debt to income ratios are satisfactory, so it leads to a very small default rate,” said Collins.

Our parents may have lived and worked in the same town but that situation has changed over the years, said Collins. Living and working in the same town save commuting expenses and the program recognizes that savings by expanding debt to income ratios in the program.

Department of Community Affairs spokesman Chris Donnelly said the program may allow a participant to walk to work, be kinder to the environment and spend more time with their family.

For married couples, only one spouse is required to live in the town where they are employed.
Maximum income limits for this county’s three Urban Target Areas are $98,160 for a one or two person family and up to $114,520 for a family of three or more.

There are constraints on purchasing new condominiums. Collins said HMFA prefers 50 percent of units in a condo development be sold and financed before a participant in the program buys a unit in new construction.

Live Where You Work uses first and second mortgages with the first mortgage being “whatever you want it to be up to the limit,” with the second mortgage consisting of 5 percent of the first mortgage, said Collins.
On a $300,000 mortgage, the borrower would be eligible for a $15,000 second mortgage, which is dischargeable after a prescribed period of time. The second mortgage covers the down payment and closing costs.

Other than Atlantic City, the majority of participating municipalities are in north and central Jersey. A municipality needs to endorse the program by signing a memorandum of understanding outlining the responsibilities of the town and HMFA.