COMMISSIONER DORIA PROMOTES NEW HMFA “PREFUND” PROGRAM FOR FIRST-TIME HOMEBUYERS
Program Lets Eligible Homebuyers Take Immediate Advantage of Federal Tax Credit
TRENTON – New Jersey Department of Community Affairs’ (DCA) Commissioner Joseph Doria today addressed a group of home mortgage lenders about a new Housing and Mortgage Finance Agency (HMFA) Program designed to allow its first-time homebuyers to take immediate advantage of a federal tax credit for people buying their first home. Eligible households can get a loan of up to $5,000 in anticipation of receiving a federal tax credit after filing their tax returns. New Jersey is the third state in the nation to offer such a program.
“This program is an extension of the efforts put into place by President Obama and Governor Corzine to stimulate the economy,” said Commissioner Doria. “It will allow New Jersey residents a greater opportunity to achieve a piece of the American Dream.”
Qualified persons who purchase a home for the first time by December 1, 2009, are eligible for up to an $8,000 federal refundable tax credit under the economic stimulus plan President Obama signed into law earlier this year. But homebuyers do not get the tax refund until after filing their tax returns. The HMFA, a DCA affiliate, will give people participating in its Homebuyer Mortgage Program the opportunity to get an advance on their credit in the form of a “Prefund” loan.
Income eligible homebuyers can receive a Tax Credit Loan Program Prefund loan, which is essentially a zero percent interest bridge loan that homebuyers will pay back once they receive their federal tax refund check. The Prefund loan must be paid back by June 30, 2010, and must be used for down payment and/or closing costs in conjunction with an HMFA mortgage or loan. Homebuyers may also combine the Prefund loan with the HMFA’s Smart Start program, which can offer people further assistance with their down payment and closing costs.
“This program will make homeownership affordable to many New Jerseyans,” said HMFA Executive Director Marge DellaVecchia. “By taking advantage of this unique opportunity to receive the federal tax credit immediately and use it, together with an HMFA mortgage and other down payment and closing cost assistance, homebuyers can bring the cash needed to the table to purchase their homes. There continues to be a strong demand for housing and this program helps make it a reality for many New Jersey residents.”
Since its inception in 1967, the HMFA has been committed to making quality housing available at costs affordable to New Jersey residents. Aside from first-time homebuyers, the HMFA works with senior citizens in senior and assisted living facilities, the disabled in special needs communities, and the state’s most needy families in traditional affordable housing developments.