The New Jersey Department of Banking and Insurance has released Bulletin 25-02 regarding the annual review of the definition of a “high-cost home loan” under the New Jersey Home Ownership Act of 2002 (the “Act”). High-cost home loans in New Jersey are subject to additional lender requirements under the Act unless the principal loan amount exceeds the maximum threshold amount.
The Act requires an annual review and, if necessary, an adjustment to the maximum principal loan amount that may be considered a “high-cost home loan.” The adjustment is “based on the last published increase in the housing component of the national Consumer Price Index, New York – New Jersey Region.” (N.J.S.A. 45:10B-22 to -35). The Index is compiled by the U.S. Department of Labor, Bureau of Labor Statistics and measures the average change over time in housing prices.
The maximum principal loan amount that may be considered a “high-cost home loan” increased from $581,206.50 for 2024 to $617,603 for 2025. The increased amount is effective for all loans subject to the Act with completed applications dated on or after January 1, 2025, retroactively.
DocMagic has updated the New Jersey High-Cost Test and applicable audits to consider the increased amount.
If you have any questions, please contact DocMagic’s Compliance Department.
