Summary — S 4152 (2025)
Title: Prohibits certain financial institutions from requiring certain disabled veterans to include anticipated property tax obligations as part of mortgage applications
Status & Timeline
- Introduced: February 3, 2025
- Senate actions: Advanced, amended (print 4152A), and PASSED SENATE on May 27, 2025
- Current: Delivered to the Assembly (referred to Assembly Governmental Operations).
- Statutory references: Supplements Title 17 of the Revised Statutes and amends P.L.1948, c.259 (C.54:4-3.30 et seq.; C.54:4-3.31).
Purpose / Intent
- To remove a common underwriting barrier for veterans with 100% service‑connected disabilities (and their surviving spouses) by preventing state‑chartered lenders from requiring disclosure of anticipated annual property tax obligations when those veterans are eligible for the State’s disabled veterans’ property tax exemption.
Key definitions
- “Qualified veteran”: a veteran the U.S. Dept. of Veterans’ Affairs has declared to have a 100% service‑connected disability.
- “Disabled veterans’ property tax exemption”: exemption under P.L.1948, c.259 (and P.L.2021, c.75).
- “Surviving spouse”: surviving spouse of a qualified veteran.
Key provisions
- Underwriting requirement restriction:
- State‑chartered banks, mortgage companies, and credit unions may not require a qualified veteran or surviving spouse to indicate or disclose the annual property tax obligation for a principal-residence mortgage application, if the municipal assessor certifies eligibility for the disabled veterans’ exemption on a form promulgated by the Commissioner of Banking and Insurance.
- For purchase mortgages: assessor certifies eligibility except for ownership (i.e., the veteran may not yet own the property).
- For refinance mortgages: assessor certifies eligibility including ownership (veteran must currently own and occupy the property).
- Dual-residence safeguard:
- If the applicant currently owns and occupies another principal residence in the State, the new mortgage cannot be approved until the applicant either (1) provides evidence the prior residence has been sold/transferred or is under contract, or (2) notifies that municipality’s assessor that they will no longer occupy the prior residence as their legal residence.
- Preliminary application and assessor process (amendment to C.54:4-3.31):
- Applicants seeking the exemption concurrently with a mortgage must submit a preliminary exemption application (form to be developed by the Commissioner) listing the lenders from whom they seek financing and providing the documentation required for the exemption.
- The assessor must certify eligibility (per rules above) and transmit that certification to each lender named on the preliminary application.
- The applicant must still submit a formal exemption application after acquiring the property; the preliminary determination is not binding on the final exemption decision.
- Administrative actions:
- The Commissioner of Banking and Insurance must promulgate the certification and preliminary application forms and publish on the department website a list of State‑chartered banks, mortgage companies, and credit unions doing business in the State to assist veterans.
Who is affected
- Directly affected: veterans with a VA-certified 100% service‑connected disability and their surviving spouses seeking to purchase or refinance a principal residence in New Jersey.
- Obligated parties: state‑chartered banks, mortgage companies, credit unions, and municipal assessors.
- Indirect effects: mortgage underwriting processes and systems of state‑chartered lenders; municipal assessor workload for preliminary certifications.
Potential impacts and considerations
- Reduces a paperwork/qualification obstacle for qualifying veterans by allowing lenders to rely on assessor certification rather than requiring applicants to list anticipated property taxes that could otherwise affect debt-to-income calculations.
- Preserves assessor review and later formal exemption application — preliminary certifications do not guarantee the final exemption.
- The bill applies only to state‑chartered financial institutions (not explicitly to federally chartered banks or all mortgage originators).
- Implementation depends on forms and lists to be issued by the Commissioner of Banking and Insurance; municipal assessors will have a new role in providing certifications to lenders.
