Policy Number: 4-105
Policy Name: NEIGHBORHOOD MORTGAGE ASSISTANCE PROGRAM
Date: March 12, 1998
The University of Delaware will make available funds for mortgage assistance to eligible employees who choose to purchase homes in specific targeted neighborhoods within the City of Newark. The programs primary purpose is to assist in stabilization of traditional family neighborhoods as described below.
All full-time employees are eligible to make application for mortgage assistance immediately upon employment.
The University will make a $5,000 cash loan at settlement to be forgiven at the rate of $1,000 for each full year the eligible employee maintains the house as his/her primary residence, with the stipulation that the purchaser must remain an eligible employee for two years from the date of settlement. Because the loan will be forgiven provided the employee retains his/her eligibility, employee will realize taxable income of $1,000 per year for five years and will be liable for income and wage taxes thereon.
Any first mortgage must be granted by a banking institution or other firm regularly in the business of lending for home purchases and performing credit reviews. The University's loan will be secured by a second mortgage on the house.
Except as provided for in Provision 3 below, the borrower must remain an employee of the University for two years from the date of the settlement or repay the remaining unforgiven loan balance even if continuing to reside in the house.
In the event of the retirement, total disability or involuntary separation from employment for other than just cause, the loan may continue until forgiven if the mortgaged property continues to be the primary residence of the former employee.
The property must be the primary residence of the eligible employee, except that:
In the event of a legal separation or divorce of an eligible employee holding a University loan, if his/her spouse and/or minor children continue to occupy the mortgaged property as their primary residence, the University loan may continue until forgiven.
In the event of the death of an eligible employee holding a University loan, and his/her spouse and/or minor children continue to occupy the mortgaged property as their primary residence, the University loan may continue until forgiven.
In the event of sabbatical leave, home may be rented for up to one year to single occupant or family.
Interest shall accrue at the rate of 8% per annum, beginning 30 days from the date an employee leaves the University's employ within two years or ceases to use the property as his or her primary residence (or the primary residence of his or her spouse) within five years.
No more than $5,000 shall be made available per home purchase, regardless of the number of eligible employees planning to reside in the home.
An employee may participate in the program one time only.
As a condition of the loan, home owner agrees to grant the University the first opportunity to purchase property.
Eligibility for this program does not affect eligibility for any other program the University may offer regarding primary residence purchases. See the Faculty and Professional Mortgage Loans policy.
The University of Delaware reserves the right to alter the terms and target neighborhoods as deemed appropriate to the goals of the program or to terminate the program at any time.
The $5,000 loan will be provided at settlement by check made out as instructed by lender (mortgage provider). Funds may be applied to down payment and/or settlement costs.
NOTE: Area banks may offer additional programs that may provide additional favorable terms to employees. Employees seeking a mortgage may wish to contact local banks for further information.
Properties included in the Neighborhood Mortgage Assistance Program:
East Park Place Area
Properties on the streets listed below bounded by the east side of Haines Street to west side of S. Chapel bordered on the north by E. Cleveland and the south by Chambers Street.
Cleveland Avenue Area
For additional information, contact the Treasurers Office (831-8964).
Submitted by: Office of the Treasurer