The Standard Mortgage Program

Princeton University’s mortgage services group oversees programs that assist faculty and staff with the purchase of a home in the Princeton area. Through the Standard Mortgage Program (SMP), the University offers favorable mortgage rates and terms to eligible faculty and staff.

In addition to being eligible for the program, the property itself must be eligible and loan requirements must be met.

These loans are administered by the University and mortgage payments are made through payroll deduction.

Eligibility for the standard mortgage program is determined by position or rank. Princeton University retirees are not eligible for a new mortgage through the program.

If you are in negotiations for a faculty or staff position eligible for the program, contact mortgage services.

Employees in term positions normally are not eligible for participation in the standard mortgage program. However, you may be eligible for a favorable mortgage through two external lenders with which the University has relationships.

For further clarification on eligibility, contact mortgage services.

Significant terms and conditions of the standard mortgage program include:

• The property must be a single-family home and your primary residence.
• Only first mortgages on newly acquired properties are allowed. The program does not provide mortgage loans for properties owned prior to employment by Princeton University, for a property owned before you became eligible to participate, or for refinancing.
• With the exception of the city of Trenton, purchased property must be located within a nine-mile radius of the central campus. Contact mortgage services to make sure the property is in an eligible location. Eligibility Map
• The loan limit is 90 percent of the appraised value of the property or the purchase price, whichever is lower. The current maximum loan limit allowed is $700,000.
• Buyers pay normal closing costs including, but not limited to, attorneys' fees, title insurance costs, survey fees, and recording fees.

The standard mortgage program targets an interest rate that is 1.5 percent below the prevailing local commercial rate for residential mortgage loans. The IRS long-term applicable federal rate (AFR) serves as a rate floor, so the actual University interest rate charged will not be lower than the AFR. The University interest rate is locked in for a 90-day period based on the market rate and AFR in effect on the date an application is accepted.

However, during this 90-day period, if the University rate is lower for the month in which the closing actually takes place, the lower rate will apply. If the closing occurs within the first five calendar days of the month, the University rate for the previous month will apply if it is lower.

Rates for May 2013 are:

These rates are based on market rates as of May 1, 2013.

Under the program, mortgages are issued for 30- or 40-year terms, with the same interest rate applying to either term.

• Loans are repaid through payroll deduction as level monthly payments consistent with the way you are paid; either 10- or 12-month installments.
• You may accelerate repayment of your loan by authorizing the mortgage department to increase your payroll deduction, or by submitting additional amounts by check.
• Mortgage loans are due and payable when you are no longer employed by the University (except for retirement), or no longer use the property as your primary residence. Normal standards require repayment of the mortgage balance within 90 days of the end of your University employment.
• Retirees may continue to participate in the standard mortgage program as long as the property is their primary residence and they continue to make required monthly mortgage payments. If you retire, you will receive a monthly billing statement; you may pay by check or online through your checking or savings account.
• If you die while employed or die as a retiree under University guidelines, and were participating in the standard mortgage program, your surviving spouse or registered domestic partner may continue in the program with some restrictions.
• A $25.00 fee will be assessed for any check or electronic payment request that is not honored by your bank.

If you have questions about mortgage loan repayment, balance or payoff information, of if you are having trouble logging in to your billing account contact Gerald T. Schreffler, Manager, Rents & Mortgages, Loans & Receivables.