Special Programs

Smart Start Program Fact Sheet

1. PROGRAM DESCRIPTION: Accumulating the funds for downpayment and closing costs is a common barrier to potential homeowners. The Smart Start Program is available to participants in the Agency's first mortgage homebuyers program who are purchasing homes in Smart Growth areas and who earn less than 80% of HMFA's Home Buyer county income limits. The program helps these families by offering a second mortgage for downpayment and/or closing costs up to 4% of the first mortgage.
2. AVAILABLE FUNDS: As allocated by HMFA.
3. ELIGIBLE BORROWERS: Eligible households are those who qualify under the Home Buyer Program and whose income is less than 80% of the maximum income permitted under the Home Buyer Program based on small or large family status, county of purchase and whether the purchased property is in a Smart Growth area. Borrowers with sufficient personal assets to close a loan at less than 80% LTV are ineligible. Corporations and Investors are not permitted to act as borrowers.
4. OCCUPANCY: Property must be occupied as the borrower's primary residence within 60 days of closing. Borrower must maintain occupancy for the life of the loan.
5. LOAN TERMS:The Agency will make Smart Start downpayment and/closing costs loans in the amount of 4% of the first mortgage to qualified Home Buyer Program borrowers purchasing in Smart Growth areas as determined by the Agency's Smart Growth locator. Interest on the second mortgage will be at the same rate as the first mortgage and will be calculated as simple interest. All assistance secured under the Smart Start Program will be partially forgiven in four equal increments starting on the fourth anniversary of the closing of the loan and on each anniversary thereafter until the debt is satisfied. If the borrower lives in the property for seven (7) years the principal plus accrued interest will be fully forgiven.If the borrower sells, refinances or ceases to occupy the property as his/her primary residence full repayment will be due as follows: months one (1) through 48 principal and accrued interest is due. After the 48th month, 25% of the 2nd mortgage will be forgiven. Thereafter, the 2nd mortgage will be re-amortized and be forgiven every 12 months (without apportionment for part of a year), in 25% increments, until fully forgiven after the 84th month.
6. INCOME LIMITS: Income limits for the Smart Start mortgage program are 80% of the areas median income determined by the area of purchase as well as family size.
7. PURCHASE PRICE LIMITS: Purchase price limits exist for both the statewide and target areas. Loans submitted using FHA, VA and/or RECD guidelines must adhere to FHA or HMFA guidelines (whichever is lower) regarding purchase price limits or mortgage loan limits.
8. Municipalities that are covered by this program are:  Berkeley Township, Toms River Township (aka Dover Township), Lakewood, Manchester Township, Asbury Park, Long Branch, Neptune Township, Atlantic City, Burlington City, North Hanover, Pemberton, Camden, Gloucester City, Gloucester Township, Lindenwold, West Wildwood Bridgeton, Vineland, East Orange, Orange, Irvington, Newark, Glassboro, Guttenberg, Hoboken, Jersey City, North Bergen, Union City, West New York, Trenton, New Brunswick, Perth Amboy, Clifton, Passaic, Paterson, Penns Grove, Salem, Elizabeth, Plainfield.  Many other municipalities are also covered in whole or in part, you can see a list of more eligable properties by searching this website for Smart Start using our special feature search.

9. For more information on this program, contact Home Capital Network.