NJ First-Time Home Buyers

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Are First Time Home Buyer Mortgage Programs Ending Soon?

Are First Time Home Buyer Mortgage Programs Ending Soon?

Tortoise HomeFor first time home buyers in New Jersey and many other states, the first time home buyer tax credit not only gave some incentive to purchase a home, but it also gave them the availability to purchase homes they otherwise could not have qualified for. Let me explain.

Most states, if not all, have first time home buyer mortgage financing programs. In New Jersey, we have the New Jersey Housing and Mortgage Finance Agency (NJHMFA) that offers first time buyer grants, first time buyer mortgages, and a handful of other great options. In Pennsylvania, there is PHFA.

Many of these finance agencies made available a way to utilize the federal first time home buyer tax credit to buy a home. I'm not talking about settling on a home and getting the tax credit sooner through a revision of 2009 tax returns. I'm talking truly using the federal tax credit money for a down payment and/or closing costs. In New Jersey this is known as the Tax Credit Loan Program, or The "Prefund" Program.

There are several benefits to this program that make it a great option.

  1. The interest rate on this program is lower than a first time home buyer program that has a grant program tied to it (Such as the Smart Start program offered by the same agency).
  2. The Tax Prefund Program is not restricted to certain geographical areas like some other first time home buyer programs are.
  3. Because the interest rate is lower, it allows borrowers to qualify in situations were approval is marginal. The difference in rate from one program versus the other could be as high as .75%. This changes a buyer's debt ratio and can allow for an approval when a buyer's profile is not perfect.

For some first time buyers who's price range is near the lower end of the market, these seemingly small differences make a huge difference to their buying power and loan approval. In 3 of the 4 transactions I personally have originated using this program, these differences were enough to allow for approval. That's three extra buyers this market may otherwise have not seen! That is GREAT news for them!!

Some first time home buyers who wait will be losing a lot more than just $8,000 when the tax credit expires; They will be losing their current oppurtunity to purchase a home.

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Steve Kappre is a Mortgage Planner with Treasury Mortgage. Steve specializes in;

• All areas concerning NJ First-Time Home Buyer Mortgages, grants, down payment assistance, tax credits, and more.

Reverse Mortgages

• Equity Management strategies for high-end homes and high net worth individuals.

Contact Steve Kappre directly at 856-419-3561 or at www.stevekappre.com

Comment balloon 10 commentsStephen Kappre • September 16 2009 12:46PM
Are First Time Home Buyer Mortgage Programs Ending Soon?
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Are First Time Home Buyer Mortgage Programs Ending Soon? For first time home buyers in New Jersey and many other states, the first time home buyer tax credit not only gave some incentive to purchase a home, but it also gave them the… more