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Princeton University
Standard Mortgage Program Guide

Eligibility

University permanent personnel of the following ranks are immediately eligible to apply for a mortgage loan through the Standard Program:

• Faculty (three year appointments or longer)
• CAMPUS Research and Technical Staff:
  • Research Scholar
  • Sr. Research Scholar
  • Professional Specialist
  • Sr. Professional Specialist
• CAMPUS Human Resources Staff:
  • Administrator (Ranks 5 and above)
  • Academic Manager (Ranks 2A & above)
  • Coach (Rank 015) & Head Coach
  • Health Care Professional (Rank 5)
  • IT Professional Staff (Ranks 020 and above)
  • Public Safety Shift Supervisor
  • Senior Tech Support Staff III
• LIBRARIAN:
  • (Prior to 1/1/04) - Librarian III & IV
  • (After 1/1/04) - Librarian & Sr. Librarian
• PPL Administrative, Research and Technical Staff:
  • Administrator (Ranks 5 and above)
  • Research Physicist
  • Principal Research Physicist
  • Managing Principle Research Physicist
  • Sr. Manager - Principle Research Physicist
  • Engineering and Scientific Staff (Ranks 7-10)

Personnel listed are eligible after 1 year at rank with letter of recommendation from their department supervisor:

• CAMPUS Research and Technical Staff:
  • Associate Professional Specialist
  • Associate Research Scholar
• CAMPUS Human Resources Staff:
  • Administrator (Ranks 3 & 4)
  • Academic Manager (Ranks 1A, 1B & 1C)
  • Coach (Rank 0.5) & Assistant Coach
  • Health Care Professional (Ranks 1-4)
  • IT Professional Staff (Rank 010)
  • Public Safety Shift Assistant Supervisor
  • Senior Tech Support Staff I & II
• LIBRARIAN:
  • Associate Librarian
• PPL Administrative, Research and Technical Staff:
  • Administrator (Ranks 3 & 4)
  • Staff Research Physicist
• Engineering and Scientific Staff (Ranks 3-6)
• Engineering Associate I, II & III

Mortgage Amount

Application will be considered for mortgage loans in an amount not to exceed ninety percent (90%) of the appraised value of the property or the purchase price, whichever is lower, up to the maximum loan allowable at the time application is made.

The size of a mortgage loan granted is also limited by the applicant's ability to assume reasonably the burdens of shelter costs for a specific property within the confines of his or her University income as determined by University guidelines. It is recommended that interested parties (both current employees and applicants for employment) contact the Office of Real Estate Finance of the University (8-3123) as soon as possible to determine the maximum mortgage loan which may be provided to them under the current guidelines.

Length of Mortgage Term

Mortgages are granted for terms of up to forty (40) years.

Interest Rate

The interest rate for mortgage loans is 1 1/2% below the prevailing local commercial interest rate for residential mortgage loans. The interest rate of a loan is determined on the date the written application is submitted and is frozen (not increased) for a ninety (90) day period. This is referred to as the Stated Interest Rate ("SIR").

If the effective interest rate in the month of closing is lower than the SIR, then the lower rate will prevail, provided, however, that for administrative convenience the prior month's rate will apply to any transaction which closes on or before the fifth of each month.

Payment Schedule

A constant payment schedule is established to provide for level payments of principal and interest combined in an amount sufficient to retire the loan at the end of the term. Monthly payments on these loans are deducted from an employee's salary, either on a ten(10) or twelve (12) month basis.

Restrictions

The Standard Mortgage Loan Program was established to make it easier for faculty and senior level staff to purchase housing in the Princeton vicinity. The program provides only first mortgage loans for the purpose of purchase of homes to be occupied as a single family principal residence by an eligible person and his/her family. It does not provide for issuance of mortgage loans on properties owned by eligible employees prior to their employment by Princeton University or prior to their becoming eligible for the mortgage program. It does not provide for second mortgage loans or home improvement loans of any kind. The program provides favorable interest rates and terms for first mortgage loans.

The property purchased must be located within a nine (9) mile radius of the University's central campus.  This nine (9) mile limit serves an important goal of the Program by insuring that Princeton remains a residential University.  However, the Program has recently been enhanced to include properties located within the official city limits of our State Capital, the City of Trenton. 

Mandatory Prepayment of Mortgage

Mortgage loans granted under the Standard Program fall due and payable when the participating borrower is no longer employed by Princeton University (except in cases of retirement) or no longer uses the mortgaged property as his or her principal residence. In such case, the mortgage loan must then be paid off within ninety (90) days per established procedures. In the event of the death of a participant holding a mortgage loan not subject to cancellation for the reasons cited in this paragraph, the University mortgage loan will continue in effect for the benefit of the surviving spouse so long as he or she remains unmarried, but if the surviving spouse remarries, the University mortgage loan must be fully paid.

Procedures for Obtaining a University Mortgage Loan Under the Program

The first step in obtaining a mortgage loan under the Program is to contact the University's Office of Real Estate Finance to complete and file an application. The Office of Real Estate Finance administers the Program and should be able to answer any questions concerning it as well as provide additional advice and information concerning the purchase of a home and the prevailing conditions in the local real estate market.

The application form used by the Office of Real Estate Finance is generally similar to those used by home mortgage lending institutions. It contains questions relating to personal financial information in order to confirm that those who apply for mortgage loans under the Program will be able to meet the costs of home ownership. This information is treated as confidential.

The applicant is required to pay an application fee at the time he/she submits a completed application to the Office of Real Estate Finance. This application fee covers processing costs to the University in connection with the subject application.

Assistance in Purchasing a Home

The Office of Real Estate Finance will be happy to answer any questions concerning the Princeton University Standard Mortgage Loan Program, including loan eligibility, current interest rates, and the maximum mortgage loan that may be obtained for a particular employee. The Office of Real Estate Finance will be pleased to consult with prospective participants, whether they are current employees or are applicants for a position at the University, in order to provide them with some information concerning the processes involved in determining whether or not a mortgage can be prudently granted in a given situation. In addition, the Office of Real Estate Finance recognizes that many interested persons are looking to purchase a home for the first time and find themselves experiencing unanticipated difficulties in negotiating a transaction. The Department generally is in a better position to assist employees and prospective employees in avoiding such problems when it is consulted before or at the outset of the search process.

All of the foregoing reflect the terms and conditions of credit under the Program which the University usually and customarily extends, arranges or will accept. However, the University reserves the right at any time without notice to terminate altogether or modify in any respect the Princeton University Standard Mortgage Loan Program. Of course, no such termination or modification will affect mortgage loans previously made under the Program.

This Guide is abbreviated for convenience and does not include all terms and conditions which may be incorporated in the loan documents.

For additional information, please call the Princeton University Office of Real Estate Finance Department (258-3123).