Friday, July 12, 2024
NJ News

Smart Commute Mortgages Make Housing Near Transit a Smart Choice

In late September 2004, NJ TRANSIT joined mortgage-industry powerhouse Fannie Mae in introducing the New Jersey Statewide Smart Commute Initiative. The program, designed to encourage state residents to consider homeownership options near public transportation, is supported by the New Jersey Association of Realtors and a range of local and national lending institutions.

Village Mews in South Orange, NJ Transit Village

The Smart Commute Initiative is based on the premise that living near transit and using it for work and non-work trips can reduce a household’s total spending on transportation, and that those potential savings can be redirected toward housing costs. The concept began in 2002 as a Fannie Mae pilot program in Pittsburgh and Minneapolis, and has since been extended to a handful of areas across the country. Lenders participating in the program will add a share of the borrower’s potential transportation savings—$200 per month for single-wage households and $250 per month for dual-wage households—to their qualifying income, thus increasing the applicant’s home-buying power.

To qualify for the program, homes must be within one-half mile of rail or light rail stations or within one-quarter mile of a bus stop. Buyers cannot own more than two cars and must agree to use transit for their trips to work. Additional features of Smart Commute include low down payments of 3 percent and up to two free one-month transit passes from NJ TRANSIT. This newest incentive for locating near transit complements transit-friendly financing products already offered by the New Jersey Housing and Mortgage Finance Agency. These include the HMFA’s “City Living” program for the development of market-rate rental housing in urban locations, and its “At Home Downtown” program for the rehabilitation or construction of one- to four-unit residential structures with storefront commercial components.