Gov't aid available for first-time home buyers BY JENNIFER AMATO Staff Writer NORTH BRUNSWICK - First-time home buyers in Middlesex County can take advantage of a special program designed to aid them with their housing down payment and closing costs. The U.S. Department of Housing and Urban Development's (HUD) American Dream Down Payment Initiative (ADDI), which began in April, will offer a minimum amount of $8,000 to qualified applicants. "We felt it was very important to help first-time home buyers with information. When you buy a home for the first time, it is very scary. ... We think it is very valuable that our home buyers go through education and go through people who actually act as advocates for them," said Melissa Palfy, of the Middlesex County Department of Housing and Community Development, during a presentation at the municipal building on Sept. 26. For the program, household income must not exceed specified limitations, which begin at $53,600 for one person and range to $101,200 for eight people actually living in the house. The rate is based on what is currently earned now with salaries projected forward. The first requirement is attendance in a home-buyer training course within the past year with any HUD-certified agency. The Housing Coalition of Central Jersey offers a one-day, four- to six-hour free course in New Brunswick, and the Faith Fellowship Community Development Corp. in Sayreville offers a six-hour course with lunch for a fee of $40 for an individual and $50 for a family to complete a credit report. The second step is to obtain a mortgage pre-approval. "This shows us you really are able to compete in this program and go out and look for housing," Palfy said. Third, a housing unit must be purchased in any Middlesex County municipality except for New Brunswick and Perth Amboy, which currently receive direct assistance from HUD. The units must be single-family residences, including townhouses, condominiums, half-duplex or a co-op, and must pass the county's Housing Quality Standards inspection and be certified free of lead-based paint hazards. Items can be negotiated before closing on the house, but if the home buyer decides to get out of their contract, they can look for another household. "If you qualify and the first property doesn't work out, go back out there," Palfy advised. If the applicant does not find a suitable house in six months, they can continue to look and re-apply with a newly adjusted financial report. However, since the application is reviewed by the freeholder board, the leeway time may be six to eight weeks. "We know it's a tough market out there and we know it might be difficult to find something you can afford," Palfy said. Another stipulation is that the home owner must remain at the residence for 10 years. If so, there will be no payment of principal or interest by the home owner. If not, the approval, which will be granted in the form of a deferred repayment mortgage in an attorney trust account, must be paid back in the full amount of the ADDI assistance plus 4 percent simple interest. Yet, if at the time of a premature sale the market is not doing well, the county will only take the maximum amount the homeowner can return. For example, if the owner is granted $10,000 but can only return $6,000, the county will accept that. "You'll never be worse off than when you came into the program," Palfy assured the crowd. The minimum assistance payment is $8,000 but the funds are usually 4 or 5 percent of the purchase price. However, the county also wants to avoid over-enrichment and not give out more money than potentially needed. The homeowner can have no more than $20,000 in liquid assets after closing, which includes savings accounts, checking accounts, CDs and money market accounts but not retirement funds or pensions. As far as refinancing is concerned, permission from the county must be granted first. For more information about the program, contact Palfy at (732) 745-2922 or Melissa.Palfy@co.middlesex.nj.us. The Housing Coalition can be reached at (732) 249-9700. Faith Fellowship can be reached at (732) 727-9500.