This state of New Jersey mortgage and foreclosure assistance program, the Housing Assistance and Recovery Program (HARP), is yet another option to aid families and individuals who face imminent foreclosure. The goal of this assistance is to allow the family to reside in their home while paying affordable rent, and the goal is to eventually allow the homeowner the ability to buy back the property.
The New Jersey Housing and Mortgage Finance Agency (HMFA) (phone 609-278-7400) will provide grants and other financial support through the Housing Assistance and Recovery Program Support Fund. The money will go directly to certain nonprofit organizations as well as public entities, and the funds will be used to allow them to execute lease-purchase agreements with those existing homeowners who currently meet program requirements. There will be a total of $15 million disbursed, and the funds are being provided by the Long Term Obligation and Capital Expenditure Fund. Many of the program criteria are the same as the Mortgage Stabilization Program, such as income limits and more.
The are a number of guidelines that need to be met by homeowners. The applicant needs to be facing imminent foreclosure due to reasons including unemployment, a medical emergency, or some other financial crisis such as the loss of government benefits. The homeowner needs to also have owned the residence for at least one year. All of this must of course by proven by the applicant, as a formal application process is in place.
Only certain types of homes are eligible as well. For example, the New Jersey residence needs to be owner occupied, and be a single-family, one-unit home or a two- or three-family unit. The residence needs to be in fairly decent condition and habitable, as homes that are in poor condition or that are unconsidered unlivable will not qualify for the Housing Assistance and Recovery Program. Another key condition is that the price of the home when sold back to the lease-purchaser can’t exceed the sales price paid by the sponsor.
What the program does in effect is it allows non-profits and other groups across New Jersey the ability to borrow money from the state fund. They can then have the ability to take any number of steps to prevent a foreclosure and the resulting eviction from the home. For example, some non-profit organizations have completed the purchase of a foreclosed home and then are renting the home back to the person or family who lived there. The family would then need to pay rent for an agreed upon timeframe until it can buy back the home from the non-profit or until they can move on to a more affordable apartment or home. The house cannot be sold to them for a profit.
With the state of New Jersey hit hard by the housing crisis, this innovative program can help hundreds of homeowners keep their home, and provide them time to get back on track financially. It will also help keep towns and neighborhoods from having an excessive amount of vacant and/or foreclosure homes, so it reduces blight.
Since families are allowed to live in the home (if they pay rent) the NJ Housing Assistance and Recovery Program can help them reestablish their credit, and provide them time to save some money. All of this is done while they have a place to live.
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