TRENTON – The Senate Community and Urban Affairs Committee approved legislation today sponsored by Senator Shirley K. Turner and Ronald L. Rice that would create a program in the Housing and Mortgage Finance Agency (HMFA) that would help those eligible under the Federal Section 8 housing program to purchase a home in New Jersey.
“New Jersey has made great strides in the fight to provide more affordable housing to low income families and seniors, even as the Federal government looks to cut programs,” said Senator Turner, D-Mercer. “Most of our efforts so far have focused on providing rent assistance and we’re looking to go even further, making home ownership an option to many who would not be able to do it without the help of their community.”
Bill S-742, would require HMFA to assist home buyers who are eligible under the federal Section 9 Home Ownership Program to purchase a home in New Jersey. This would be done through loans, loan guarantees, or other assistance. The loans would be made out only to pre-qualified home purchasers.
“For many New Jersey families, owning a home is just a far-off dream,” add Senator Rice, D-Essex and Chair of the Committee. “For those people who work hard and make an honest living, we want to be able to help them turn that dream into a reality. Everyone deserves the opportunity to own their own home.”
Under the bill, HMFA shall not use credit scores as the primary means to determine credit worthiness of an application and the determination of credit shall be made in a manner that favors the applicant and takes into account the enhanced affordability provided by the subsidy involved.
“For many families covered by the Section 8 rental program, bad credit can make it nearly impossible to secure a regular loan to purchase a home. It is critical that our program is more forgiving when it comes to past credit problems and provides the broadest opportunity possible to New Jersey families. We need to break the cycle of poverty, and home ownership is a powerful means by which to move people into the middle class,” explained Senator Turner.
The bill requires that the loans would have an interest rate consistent with the lowest rate offered by the agency for other comparable programs. The loan would also need to be repaid in full upon sale, lease or other transfer of the property resulting in the purchaser changing their primary residence.
“Our communities grow stronger when more people own the home they live in. Rather than moving from apartment to apartment, they become invested in their neighborhood in which their home is located and become an active participant in efforts to improve the safety and appearance of their local area,” said Senator Rice.