|Vol. 17, No. 19||Feb. 12, 1998|
The University's new Home Purchase Assistance (HPA) Program, approved in December by the Board of Trustees, will replace the current mortgage program for new full-time faculty and professional staff hired after June 30.
For current employees, the new HPA Program is an alternative option for mortgage assistance, since they continue to be eligible for the UD mortgage program that has been in place since 1950.
According to University Treasurer Steve Grimble, "This new program demonstrates the University's continuing commitment to provide recruitment and retention incentives for new full-time faculty, professional staff members and administrators, and it expands the options available to current employees who have not yet used the mortgage assistance program."
Under the new program, the University will make a one-time $5,000 payment at the time of settlement on the purchase of a primary residence located within a reasonable commuting distance to work. This cash payment will be taxable income for the employee in the year paid
The HPA Program will make available only one such payment per primary home purchase, regardless of the number of eligible UD employees owning and residing in the home.
Grimble said full-time faculty and professional staff who use the HPA Program also may take advantage of the Neighborhood Mortgage Assistance Program, if they meet that program's qualification criteria.
"If a full-time University employee decides to apply for the HPA Program and also is eligible under the Neighborhood Mortgage Program, then that employee could receive a one-time payment of $10,000 toward purchase of a home at time of settlement," Grimble said.
The Neighborhood Mortgage Assistance Program assists full-time employees who want to live near the Newark campus. Under this program, the University makes a $5,000 cash loan at settlement, to be forgiven at the rate of $1,000 for each year an employee maintains the house as a primary residence. The $1,000 per year is considered taxable income.
Designed to help maintain the family residential nature of selected neighborhoods in the city, the Neighborhood Program grew out of suggestions from the Town and Gown Committee, which is composed of city and University representatives.
For the HPA Program, federal and state taxes will be withheld at 28 percent and 5 percent, respectively, as required by law. FICA/FICM tax of 7.65 percent also must be withheld unless the FICA threshold has been reached. Therefore, a participant would, after taxes, receive a net cash payment of $2,967.50 at settlement, Grimble said.
If an employee itemizes deductions on his or her income tax return, mortgage points paid generally are deductible, he explained, and the employee can adjust withholding tax from regular salary to reflect estimated tax liability.
Detailed information and application forms for HPA and the Neighborhood Mortgage Assistance Program are available from the Treasurer's Office, 112 Hullihen Hall, telephone 831-2707.