New Jersey Increases Amount of “High-Cost Home Loan” to $513,782.50

The New Jersey Department of Banking and Insurance recently announced in a bulletin that it is adjusting the definition of “high-cost home loan” to provide that the maximum principal amount of a loan that may be considered a high cost home loan will be $513, 782.50.

The New Jersey Home Ownership Security Act of 2002 (Act) governs residential mortgage loans.  The Act defines a “high-cost home loan,” in part, to be a loan whose principal amount does not exceed a specific amount, which is adjusted annually to include the last published increase of the housing component of the national Consumer Price Index, New York-Northern New Jersey Region (Index).  

The Index represents a measure of the average change over time in housing prices. The November 12, 2020, published Index resulted in an adjustment in the definition of “high-cost home loan” from $506,059.40 to $513,782.50, and is effective for all completed loan applications subject to the Act received by a lender on or after January 1, 2021.