NJ Extends Program That Provides An Advance On First-Time Homebuyer Tax Credit

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TRENTON– For first-time homebuyers thinking of buying their first home in New Jersey, the combined incentive and mortgage programs from the New Jersey Housing and Mortgage Finance Agency (NJHMFA) and the federal government have never been better.

New Jersey residents who plan to buy their first home in 2010 are encouraged to act quickly to take advantage of a program that grants interest-free loans to assist first-time buyers with closing costs or down payments.

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The popular Prefund program, extended to compliment the federal tax credit extension, provides eligible households with a loan of up to $5,000 in anticipation of receiving a federal tax credit after filing their 2010 tax returns. Prefund is now also extended to households who are not first-time buyers, but who are buying a new principal residence in one of 42 Urban Target Areas located throughout the state.

The NJHMFA is offering first-time homebuyers using an HMFA mortgage the opportunity to receive an advance on the federal funds on homes that must be under contract for purchase on or before April 30, 2010 and closing on the home on or before June 30, 2010.

The agency, an affiliate of the New Jersey Department of Community Affairs, created the program, dubbed ‘Prefund’, to supplement the federal tax credit being offered to first-time homebuyers as a result of the economic stimulus plan.  Homebuyers participating in HMFA’s  first-time homebuyer mortgage program can get an advance on their credit in the form of a zero percent interest bridge loan that must be paid back once they receive their federal tax refund check.

“More than 500 families took advantage of the Prefund program when it was initially offered, and we are trying to make sure that New Jersey residents know that the program is still available to help them plant roots here and raise their families in the state,” said HMFA Executive Director Marge DellaVecchia. “Since closings typically take six weeks from the time an offer is accepted, it is imperative that families in the market for a new home take advantage of this exclusive opportunity before it’s too late.”

The Prefund loan is available to individuals who meet the requirements of the first-time homebuyer mortgage program and who also qualify for the home buyers tax credit.  The loan will not exceed $5,000 and amounts vary depending on martial and tax filing status.  Homeowners have until June 30, 2011 to repay the loan.

“We work closely with New Jersey residents to help navigate the road to affordable homeownership through innovative loan and mortgage programs,” said DellaVecchia. “The Prefund helps put homeownership within reach for many of New Jersey’s first-time buyers by assisting with expenses that are often prohibitive for first time buyers, including down payments and closing costs.”

In addition to the Prefund loan program, HMFA offers a wide variety of assistance programs to aid first-time and urban home buyers and existing homeowners, such as low down payment first mortgages, Live Where You Work, Smart Start Down payment and Closing Cost Assistance Program and the Mortgage Assistance Pilot (MAP) Program.

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.

For further information on the Prefund Program or other assistance options, call 1-800-NJHOUSE or go to www.nj-hmfa.com.


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