Aug. 25, 2009 - Have you heard of the Prefund Program?

New Jersey's Tax Credit Loan Program

Just like the First Time Home Buyer Tax Credit of up to $8,000, New Jersey's Prefund Tax Credit Loan Program (NJTCLP) will end midnight, December 1, 2009.  Exactly, what is New Jersey's Prefund Tax Credit Loan Program?  The Prefund program lets first time home buyers borrow at 0% interest up to $5,000 of their anticipated federal first time home buyer tax refund to cover downpayment and closing costs. 

Income eligible homebuyers can receive a Tax Credit Loan Program Prefund loan, which is essentially a zero percent interest bridge loan that homebuyers will pay back once they receive their federal tax refund check. The Prefund loan must be paid back by June 30, 2010 and must be used for down payment and/or closing costs in conjunction with a qualifying mortgage or loan. Homebuyers may also combine the Prefund loan with the HMFA's Smart Start program, which can offer people further assistance with their down payment and closing costs. 

A sense of urgency is begining to grow for first time home buyers to start the application process of obtaining a qualifying mortgage for the tax credit.  There is anticipation there will be an increase of "eleventh-hour" applicants that will slow processing times as the deadline gets closer. Home buyers still sitting on the fence might consider securing that first home sooner, rather than later.