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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (24576)	10/16/2004 8:05:11 PM
From: nextrade!	Read Replies (1) \| Respond to of 306849

NJ Transit offers mortgage deal to home buyers A partnership with Fannie Mae promotes living near a rail or bus stop by increasing loan amounts and reducing down payments. By Angela Delli Santi philly.com Associated Press Prospective homeowners who do not mind hearing an occasional train whistle or living near a bus stop may reap a financial benefit if they settle near public transportation. Mortgage giant Fannie Mae has teamed with NJ Transit to promote homeownership near mass transit. Under Smart Commute, anyone buying a home within a half-mile of an NJ Transit train station or within a quarter-mile of a bus stop may be eligible for mortgage assistance and other benefits from the two agencies. "This seems to appeal to those folks who are tired of sitting in their cars or perhaps want to move from an apartment into a home," said Michael E. Dutton, a spokesman for Fannie Mae, which will buy loans originated by 11 participating lenders. The program makes qualifying for a mortgage easier because lenders will count as income some of the money saved by commuting via mass transit. The lenders will add as much as $200 a month in income for single-income applicants and as much as $250 a month for dual wage earners, increasing buying power by about $10,000. Required down payments are typically about 3 percent of the cost of the home, with some buyers able to put down only $500. Buyers borrow at the prevailing interest rate, Dutton said. NJ Transit will offer two rail, light-rail or bus passes for a month to participating households, NJ Transit spokeswoman Janet Hines said. Although one target market is renters who could not otherwise afford a home, Fannie Mae's Merilyn Rovira said the company was not worried about the possibility of foreclosures. "We have dipped our toe into this water carefully," she said. "The test results have been good, especially in high-cost markets like New Jersey," where some tenants can afford their rent but do not have enough left over to save for a down payment, she added. Fannie Mae has launched Smart Commute in 25 cities since 2001. New Jersey is the second state, after Delaware, to offer the program. Results have varied depending on the city, its housing market, and the commitment of the lending partners, said Jim Taylor, director of product innovation for Fannie Mae. He said the program had generated about $10 million in loans nationwide. Taylor did not provide projections for New Jersey. The program's name is a nod to "smart growth," the regional planning concept that encourages development in selected hubs while discouraging growth in environmentally fragile areas. One of the program's benefits is said to be a reduction in vehicle emissions and traffic. "That's what smart growth is all about - encouraging homeowners to buy near transit systems and encouraging them to take full advantage of the transit system," NJ Transit executive director George D. Warrington said. Department of Community Affairs Commissioner Susan Bass Levin was enthusiastic about the program. "We have an opportunity to make sure that people can buy homes at less cost because their mortgages will be cheaper and be able to commute to work on the River Line or any train or bus," she said. "What that means is fewer cars on the road and a better quality of life for everyone."