EATONTOWN — The Borough Council will move forward with a state home mortgage incentive program to encourage homebuyers to purchase homes in the towns where they are employed.
The council approved a resolution to authorize the borough’s participation in the state Live Where You Work program at the Oct. 12 meeting.
At the Oct. 5 workshop meeting, the council heard a presentation on the program by Edward Collins, lender outreach and marketing coordinator for the New Jersey Housing and Mortgage Finance Agency.
According to Collins, the Live Where You Work program provides low-interest mortgage loans to first-time homebuyers who work in Eatontown and would like to purchase a home in the borough.
The program allows the first-time homebuyer tobuyahomewitha5percentforgiveable, dischargeable second mortgage, he said.
“Basically, the average mortgage amount right here for a first-time home buyer in Monmouth County was somewhere around $200,000,” Collins said. “They would be eligible to receive up to $10,000 in down payment and/or closing cost assistance.”
He said the payments or closing cost assistance would depend on 80 percent of the median income.
If the borrower’s income is under 80 percent of the median income, the mortgage would be discharged in seven years. If the borrower earns more than the median income, that mortgage would be discharged within four years, he said.
“You turn a debt into an equity position in four years and seven years, respectively,” Collins said.
“We create a situation through the Realtors where we ask the Realtor to get the buyer/seller concession of 3 percent. In other words, the seller concedes 3 percent of the purchase price of the house,” he said.
The buyer does not have to live in Eatontown at the time of the purchase, he said, just at the time of closing.
Currently, there are 38 municipalities in New Jersey involved in the program, including Middletown, Red Bank, Keyport, Asbury Park, Neptune and Freehold, he said.
“We are moving forward in the towns that we are in right now … we have doubled the income, and we have doubled the revenue in the last year,” Collins said.
Members of the council supported the program.
“The reason we were first talking about this was because of Fort Monmouth,” Councilman Dennis Connelly said. “There is a pretty good possibility that there is going to be creation of jobs, and then we can get people to move into our community.”
To qualify for the program, Mayor Gerald Tarantolo would have to sign a Memorandum of Understanding, Collins said.
Councilman Anthony Talerico Jr., council president, and Gene Anthony, borough attorney, wanted to know why the borough has to be involved.
“The reason why I raised the question is because a program like this would seem to be able to go into a town without the consent of the council, and if the council approves it, it would be endorsing it,” Anthony said.
According to Collins, the program would have to be sanctioned by the Borough Council to be successful.
“If we don’t receive sanction from the municipality, then we don’t proceed,” Collins said.
Tarantolo agreed that sanctioning the program is important but said he is concerned that the program is similar to affordable housing.
“I see a lot of parallels to affordable housing. The whole premise of affordable housing is for individuals to live in the communities where they work,” Tarantolo said. “The fact that you are also addressing income levels is another criteria of affordable housing, so I see a lot of parallels here.”
However, Collins said that the program is a separate state entity.
“We are under the legal guidance of [the Department of Community Affairs] but we work independently. Our building is independent,” Collins said.
While Tarantolo and the council agreed to move forward with the program, the mayor asked for additional information.
“I would make a suggestion that this ought to be brought up as a discussion item at the [borough’s] Economic Development Advisory Committee. We have members of the realty community that serve on that board,” Tarantolo said.