The pilot program would let borrowers keep their rate when they move
New Jersey wants to let homeowners pack up their mortgage rate and take it with them when they buy a new home.
Senate Bill 4768, introduced on October 5, would create the New Jersey Portable Mortgage Pilot Program - a state-backed mechanism that lets homeowners transfer an existing mortgage, including the original interest rate and remaining loan term, from one primary residence to another.
The bill, sponsored by Senator Troy Singleton of Burlington County, would house the program inside the New Jersey Housing and Mortgage Finance Agency and back it with $30 million from the General Fund.
Here is how it would work. A homeowner sells their current home and buys a new one. Instead of taking out a fresh mortgage at today's rate, they carry the old loan's rate and term to the new property. The catch: the new home must be worth at least as much as the outstanding balance on the old mortgage, and it must remain owner-occupied as a primary residence.
Lenders would opt in. The bill defines a "participating lender" as any bank, credit union, mortgage company, or other financial institution that agrees to offer and administer mortgages under the program. The agency would enter into agreements with those lenders to run it.
Underwriting stays in place. Applicants must provide proof of income, a credit report and history, a current mortgage statement, and any additional documentation the agency requires. The agency or participating lender must approve each transfer.
When the new property costs more than the outstanding balance, homeowners can seek supplemental financing "at a competitive rate" through the agency, a participating lender, or other approved sources. That layered structure - the ported mortgage plus a top-up loan - is something lenders and servicers would need to build processes around.
The bill also tackles the securitization question. It requires annual reports to the governor and legislature covering application volume, program expenditures, the impact on housing inventory, and "the feasibility of expanding the pilot program and integrating qualifying loans into the federal secondary mortgage market."
Rulemaking would fall to the agency's executive director, working with the New Jersey Department of Banking and Insurance, to set uniform eligibility criteria and application processes.
S4768 is in its introduced form and has not been assigned to a committee.
For mortgage professionals in New Jersey, the bill opens a practical question worth watching: if rate portability gains traction, how do loan officers, servicers, and secondary-market teams adapt?
