GUEST COLUMN

(March 26, 2009) — Reduce commute times, save money on gas and help the environment. A simple but smart program at the New Jersey Housing and Mortgage Finance Agency (HMFA) is helping more and more homeowners across the state achieve these sensible goals.

“Live Where You Work” is a housing initiative that provides low-interest, fixed-rate mortgage loans to homebuyers who purchase homes in towns where they are employed. In some cases, the program offers other incentives such as down payment and closing cost assistance and flexible underwriting criteria for the loan qualification process. In a state with as high a cost of living as New Jersey, those benefits alone make the program worthwhile. But “Live Where You Work” aspires to something more.

The goal of the year-old program is to build stronger, more connected communities by promoting homeownership and encouraging people to live closer to their jobs. This reduces the need for cars and increases the use of alternative transportation such as walking, biking and public transit, all of which leads to a greener environment. The program also complements Gov. Jon S. Corzine’s efforts at revitalizing communities because it creates a citizenry that’s personally and professionally invested in the future success of the places where they live and work.

In order for homebuyers and communities to take advantage of the program’s benefits, a municipality must become a “Live Where You Work” partner with HMFA, an affiliate of the Department of Community Affairs. So far, 11 municipalities have signed up, including Atlantic City, Bayonne, Carteret, Evesham, Elizabeth, Jersey City, Morristown, Neptune Township, Rahway, Trenton and Woodbridge. We’re constantly asking municipalities to join the effort and we invite residents to encourage communities to get involved if they haven’t already. Mayors in participating municipalities have lauded “Live Where You Work” as an innovative way to foster a sense of community, increase affordable housing and ease vehicular congestion.

Less use of cars is central to how “Live Where You Work” operates. By taking into account the anticipated cost savings of a shortened commute, the program’s flexible underwriting provides an opportunity for homebuyers to receive larger loans than they would otherwise be eligible for because the money they would have been spending on tolls and gas can now be invested in their mortgage.

Not only do “Live Where You Work” homebuyers qualify for low-interest 30 or 40-year fixed rate mortgages from the HMFA, but borrowers purchasing homes within designated Smart Growth Areas are also eligible to receive down payment and closing cost assistance in an amount equal to 5 percent of the first mortgage loan. Also, if a homeowner stays in the house for seven years, the down payment and closing cost assistance loan is completely forgiven.

The “Live Where You Work” program has adopted income limits in an effort to reach those homebuyers who can benefit from the incentives the most. The maximum allowable income for the average family of four, for example, ranges from $94,070 to $111,205 depending on where the property is located. These income limits increase considerably for homebuyers who purchase homes in the state’s Urban Target Areas. The program also sets limits on how much homebuyers can spend on a house. The maximum purchase price for a single-family home ranges from $320,625 to $429,619 depending on which county the property is located. Again, the limits expand significantly for homes purchased in Urban Target Areas.

People who can explain the ins and outs of the program can be reached at 1-800-NJ-HOUSE. Further information can also be found at www.livewhereyouwork.nj.gov.

There are no downsides to “Live Where You Work” as municipalities that have already entered the program can attest. These communities are embracing the program in creative ways, including offering discounts at local bicycle shops and appliance stores to participating homebuyers who may be looking to buy a new bike or big-ticket items such as washers, dryers, and refrigerators. At least one municipality has partnered with several local lenders to offer closing cost rebates to “Live Where You Work” homebuyers. Partnership opportunities with local businesses also exist in terms of marketing the program to their employees. This program will benefit employers of all sizes from the corner grocery store to the Fortune 500 company by making it easier for their workers to find good affordable housing close to the job.

Join the program now to begin helping New Jersey build strong neighborhoods with citizens and businesses that are invested in the future of their communities.