Submitted by: Fannie Mae
Categories: Community Development
Posted: Mar 07, 2001 – 11:00 PM EST
Mar. 07 /CSRwire/ - Dover Mayor Richard Newman today joined representatives from Valley National Bank (VLY/NYSE) and Fannie Mae (FNM/NYSE), the nation’s largest source of financing for home mortgages, to unveil a new housing initiative that will increase homeownership opportunities for low- and moderate-income families in Dover, New Jersey. Through this innovative partnership, second mortgages that are forgivable after five years will be available to eligible homeowners for down payment and closing cost assistance. Fannie Mae will purchase the first mortgages originated by Valley National Bank under this initiative.
"Valley Neighbors" is intended for first-time home buyers of single-family properties in Dover. Valley National Bank will provide a loan to eligible borrowers of as much as 4 percent of the home purchase price for down payment and closing costs. The loan will be secured by a lien on the home and will not require any payment of principal or interest, provided the homeowner remains current on their primary mortgage obligation. At the end of the fifth year, the lien will be forgiven, provided there has been satisfactory payment, confirmed owner-occupancy, and no sale or refinance of the property. A Valley Neighbors mortgage requires 3 percent from the borrower to be used to cover down payment, closing costs, escrow fees, or other transaction expenses as the borrower chooses. Up to 2 percent of the borrower contribution can be a gift or loan.
"Valley National is excited to have developed this unique mortgage product and to have Fannie Mae as a partner to assist in making the "Valley Neighbors" program a reality," said Albert L. Engel, first senior vice president of Valley National Bank. "This product will help many hard-working local families overcome one of the major obstacles to homeownership – lack of savings for a down payment and closing cost."
Valley also will require that first-time home buyers obtain homeownership counseling through the Housing Partnership for Morris County, a United Way agency located in Dover, to help them through the home buying process. "The Housing Partnership is pleased to be working with Fannie Mae and Valley National Bank to provide free homeownership education to families who want to plan for homeownership," said Susan Zellman, executive director of the Partnership. "We feel that our four-hour Jump Start Program, presented every month, is a key ingredient for successful homeowners."
Fannie Mae’s partnership with Valley National Bank to create the new Valley Neighbors mortgage product is the result of Fannie Mae’s recently announced MyCommunityMortgage pilot initiative. MyCommunityMortgage is a suite of flexible, high loan-to-value mortgage options for one- to four-unit properties, with customizable features that help lenders like Valley National meet the needs of low- and moderate-income borrowers in the communities they serves.
"Fannie Mae and Valley National Bank share a mutual commitment to making homeownership more affordable to Dover’s diverse population," said Timothy J. Touhey, director of Fannie Mae’s New Jersey Partnership Office. "By working together, we will expand opportunities to many families who may have thought that homeownership was beyond their reach."
For more information about Valley Neighbors, consumers may call Valley National Bank at 1-888-235-4980, ext. 4250.
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