New Jersey bill lets homeowners carry their mortgage rate to a new home

Here is how it would work. A homeowner sells their current home and buys a new one. Instead of taking out a fresh mortgage at today’s rate, they carry the old loan’s rate and term to the new property. The catch: the new home must be worth at least as much as the outstanding balance on the old mortgage, and it must remain owner-occupied as a primary residence. 

Lenders would opt in. The bill defines a “participating lender” as any bank, credit union, mortgage company, or other financial institution that agrees to offer and administer mortgages under the program. The agency would enter into agreements with those lenders to run it. 

Underwriting stays in place. Applicants must provide proof of income, a credit report and history, a current mortgage statement, and any additional documentation the agency requires. The agency or participating lender must approve each transfer. 

When the new property costs more than the outstanding balance, homeowners can seek supplemental financing “at a competitive rate” through the agency, a participating lender, or other approved sources. That layered structure – the ported mortgage plus a top-up loan – is something lenders and servicers would need to build processes around. 

The bill also tackles the securitization question. It requires annual reports to the governor and legislature covering application volume, program expenditures, the impact on housing inventory, and “the feasibility of expanding the pilot program and integrating qualifying loans into the federal secondary mortgage market.”