Attention Lenders:
This bulletin serves as a reminder that NJHMFA offers a Renegotiation and Extension (R&E) Policy for the First-Time Homebuyer and Homeward Bound programs.
Please see the Renegotiation and Extension Process outlined below:
The Renegotiation and Extension Rules of Engagement:
- R&E must be requested by the borrower and may not be solicited by the Lender.
- R&E may only be requested no more than 40 days and no less than five days prior to closing.
The Renegotiation and Extension Request Form:
Renegotiation and Extension Terms:
- R&E will be applied at the current market interest rate for the applicable product, plus 0.125%. For example, if the loan locked at 4% and market is 3.5%, the R&E will bring the rate to 3.625%.
- R&E application will result in a decrease of 0.25 to the Lender’s loan price. For example, if the loan price had been 102.75, the new loan price will be 102.50.
- R&E application will result in an extension of the lock expiration date by three business days to allow time for proper redisclosure documents to be completed.
- Any applied adjustments to the rate sheet price remain applicable to the loan, including extensions applied prior to the R&E or after the R&E.
- Eligible products are limited to these specific programs: Homeward Bound and First-Time Homebuyer programs. All other programs are ineligible for the R&E process.
- R&E fees must not be passed on to the borrower.
Participating Lenders that wish to restrict R&E submissions to certain authorized users may submit the approved roster of signers to
sflenders@njhmfa.gov
