A state agency that helps first-time homebuyers acquire their homes has expanded a new program to the region.
Hamilton Township became the first municipality in Atlantic, Cape May and Cumberland counties to enter into the New Jersey Housing and Mortgage Finance Agency’s Live Where You Work program.
Edward Collins, lender, outreach and marketing coordinator for the agency, met with local real estate agents to discuss the details and promote the program to help first-time homebuyers, which the agency defines as someone who has not owned a home for three years.
Live Where You Work is available to qualified applicants who seek to purchase a home in a town where at least one member of the household works. Collins said the program is subtly different from the First Time Homeowners Program already available, but the intent of this campaign is to build sustainable communities.
People are more likely to participate and volunteer in community functions if they have a short commute to their home, Collins said. He suggested real estate agents go to schools, police departments and businesses to promote the benefits.
The program can provide as much as 5 percent of the price of the home for a down payment and closing costs. That equates to $10,000 for the buyer of a $200,000 home, who would not have to pay the money back.
Collins said that through various lenders, such as the Federal Housing Administration — which require the buyers to put forward 3.5 percent for a down payment, and sometimes get real estate agents to agree to lower their commission — a buyer can purchase a home with no money or just a nominal amount down. Collins routinely referenced a case in Barnegat Township in which a couple bought a home by putting down $148.67.
The agency made about $75 million last year, but its goal is to promote homeownership, not necessarily turn a profit, which is why it can afford to offer the incentives and low interest rates, he said.
The agency purchases loans approved by other lenders, and their involvement helps some loans get approved because it reduces the risk for the lending companies, Collins said. The agency can offer interest rates as low as 3.5 percent to those who meet the income limit, which is $89,400 for the township for a one- or two-person household.
Hamilton Township is the 42nd municipality in the state to enter the program, and Collins said he has also had discussions with Hammonton.
Mayor Roger Silva said Committeewoman Amy Gatto worked with the agency for the past two years to draw the program.
Kate Gatto, broker and owner of RE/MAX Community, said she would work to market the program to potential buyers and place signs on listings informing potential buyers that the financing is available.
Her daughter Kelly Gatto, a sales agent with the firm, said first-time homebuyers are a key demographic since many people who recently lost homes are not in a position to buy again.
Kate and Kelly Gatto are Amy Gatto’s aunt and cousin, respectively. Amy Gatto said that when she first heard about the program, she consulted her relatives to determine whether it would help local real estate agents. She also said she thinks it would benefit township employers to have their employees live close by.
“A lot of them say, ‘Wow, can I really do this?’” Kelly Gatto said. “I tell a lot of people who call looking to rent if you can afford these prices you could buy a home and your payment can be less than the rent. It’s not a reality to them.”
For more information visit www.njhousing.gov
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