A2651

An Act establishing the Student Loan Assistance and Home Purchase program and supplementing Title 55 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “New Jersey Student Loan Assistance and Home Purchase Act.”

2. a. The Executive Director of the New Jersey Housing and Mortgage Finance Agency shall establish a Student Loan Assistance and Home Purchase program to be administered by the agency, which shall implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The Student Loan Assistance and Home Purchase program shall provide financing opportunities pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. The executive director shall appoint a program manager to oversee the implementation of the Student Loan Assistance and Home Purchase program. Once appointed, the manager shall, as soon as practicable, establish a list of near eligible properties that are available for purchase through the program.

d. For the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), “eligible property” means foreclosed residential single family homes in near move-in condition, which shall be determined based on the following factors: (1) cleanliness, (2) structural integrity, (3) expected maintenance costs, (4) property location, and (5) general habitability.

3. a. The program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall assist those individuals with education-related debt to purchase a first home by incorporating all or a portion of student debt held by the borrower into the home loan. The program shall comply with applicable federal regulations. There shall be no limit to the amount of education related debt that may be incorporated into a home loan, if all other federal and State requirements are satisfied.

b. Participants in the Student Loan Assistance and Home Purchase program shall maintain the purchased home as their primary residence for at least five years from the date of closing. The Executive Director of the New Jersey Housing and Mortgage Finance Agency shall establish penalties and fees applicable if this provision is not satisfied.

4. Not later than the first day of the seventh month next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Executive Director of the New Jersey Housing and Mortgage Finance Agency shall, pursuant to "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), establish rules and regulations to effectuate the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill). In addition to any regulations necessary to implement and administer the Student Loan Assistance and Home Purchase program, the regulations promulgated pursuant to this section shall include (1) eligibility requirements for individuals with education related debt to participate in the program and (2) interest rates and other penalties, charges, and fees in an amount necessary to implement the provisions of the Student Loan Assistance and Home Purchase program.

5. This act shall take effect immediately.

STATEMENT

This bill is entitled the “New Jersey Student Loan Assistance and Home Purchase Act.” The purpose of the New Jersey Student Loan Assistance and Home Purchase program is to facilitate the purchase of first homes for individuals who are burdened by excessive student debt at extremely high interest rates.

Under the bill, the Executive Director of the New Jersey Housing and Mortgage Finance Agency (NJHMFA) would establish a Student Loan Assistance and Home Purchase program to be administered by the agency. The executive director would appoint a program manager to oversee the implementation of the Student Loan Assistance and Home Purchase program. Once appointed, the manager would be required to establish a list of near eligible properties that for purchase through the program.

For the purposes of the bill, “eligible property” means foreclosed residential single family homes in near move-in condition, which shall be determined based on the following factors: (1) cleanliness, (2) structural integrity, (3) expected maintenance costs, (4) property location, and (5) general habitability.

Participants in the Student Loan Assistance and Home Purchase program would be required to maintain the purchased home as their primary residence for at least five years from the date of closing. Penalties and fees would be imposed if this provision is not satisfied.

In addition to any regulations necessary to implement and administer the Student Loan Assistance and Home Purchase program, the regulations promulgated by the Executive Director of NJHMFA would include (1) eligibility requirements for individuals with education-related debt to participate in the program and (2)
interest rates and other penalties, charges, and fees in an amount necessary to implement the provisions of the Student Loan Assistance and Home Purchase program.