SENATE URBAN POLICY AND PLANNING COMMITTEE

STATEMENT TO

SENATE, No. 406

STATE OF NEW JERSEY

DATED: FEBRUARY 22, 1996

      The Senate Urban Policy and Planning Committee reports favorably Senate Bill No. 406.

      Senate Bill No. 406 establishes a special mortgage assistance program, the Secure Neighborhood Mortgage Assistance Program, to encourage local law enforcement officers and fulltime paid firefighters to purchase homes in specially designated neighborhoods of their employer municipality.

      Concerns about rising crime rates and personal safety are responsible for many families' and longtime residents' abandoning their neighborhood homes in some of New Jersey's more urban municipalities. Since the vitality of our urban municipalities depends upon the stability and viability of their local communities and neighborhoods, it is essential that these concerns about crime and for personal safety be addressed. One way to accomplish that objective is to establish a program that encourages and assists municipal law enforcement officers and firefighters to purchase homes in local neighborhoods.

      Under the provisions of this bill, low interest mortgages, low or no down payment offerings, and other such incentives would be available to law enforcement officers and firefighters who wish to purchase a home in a specially designated neighborhood. The program would be administered by the State Treasurer through the New Jersey Housing and Mortgage Finance Agency. To participate in the program, the governing body of the municipality must adopt an ordinance, designate the neighborhoods where the purchases must be made, and identify a local official to assist interested law enforcement officers and firefighters in applying for the assistance.

      The program would only be available to law enforcement officers and firefighters employed by municipalities which qualify for the State's "urban aid" program.

      The bill requires that a qualified applicant agree to maintain a home purchased with program assistance as the applicant's primary residence for at least five years as a condition to the receipt of program assistance. This is intended to discourage the use of program assistance by qualified applicants to purchase investment or rental properties. The bill clarifies that funds for the program would be available from the Police and Firemen's Retirement System, which currently makes mortgage loans administered by the New Jersey Housing and Mortgage Finance Agency.