Financial and Business

Faculty and Professional Mortgage Loans

Section: Financial and Business Policies
Policy Name: Faculty and Professional Mortgage Loans
Policy Owner: Executive Vice President
Responsible University Office: Office of the Vice President for Finance and Deputy Treasurer
Origination Date: April 4, 2000
Revisions: February 21, 2001
Legacy Policy Number: 4-104
  1. POLICY
    The Trustees of the University have made available a sum of money for the financing of residential mortgages to assist in recruiting and relocating highly qualified faculty and professional members by obtaining appropriate housing within the vicinity of the University. This program has been replaced by the Home Purchase Assistance Program for those qualified faculty and professional members whose hiring date is after June 30, 1998. All full-time faculty and professionals required to relocate, by reason of their employment with the University, are eligible to make application for mortgage loans immediately upon employment. All other full-time faculty and professionals are eligible after two years of employment. Some of the provisions of the program are as follows:

    1. The mortgage rate of interest will be contingent upon the market and University policy at the time a mortgage is approved.
    2. The term of the mortgage will not exceed 30 years.
    3. The mortgage may be up to 90% of the appraised value of the property or 90% of the purchase price, whichever is less and may not exceed 3.25 the applicant’s contract salary for a residence purchased in Delaware and 3.0 times the applicant’s contract salary for a residence purchased outside of the State.
    4. Eligible faculty and professionals may receive only one University mortgage during their employment with the University. The program is not designed to provide funds for renovation or for refinancing property currently owned by an eligible member.
    5. The property on which a University mortgage is secured is to be the primary residence of the eligible employee, except that:
      1. In the event of a legal separation or divorce of an eligible employee holding a University mortgage, and his/her minor children continue to occupy the mortgage property as their primary residence, if payments are made in a timely manner, the University mortgage may continue until maturity or until the faculty/professional ceases to be an employee. When the faculty/professional ceases to be an employee or when minor children no longer occupy the mortgaged property as their primary residence or when the last minor child of the eligible employee reaches eighteen years of age, the mortgage is to be repaid within 180 days.
      2. In the event of the total disability of an eligible member holding a University mortgage and he/she has been employed by the University for ten or more years, the University mortgage may continue until maturity if payments are made in a timely manner and if the mortgaged property continues to be the primary residence of the employee. When the mortgaged property no longer is the primary residence of the eligible employee, the mortgage is to be repaid within 180 days.
      3. In the event of the death of an eligible employee holding a University mortgage and his/her spouse and/or minor children continue to occupy the mortgaged property as their primary residence, the University mortgage may continue until maturity if payments are made in a timely manner. When the spouse and/or minor children of the eligible employee no longer occupy the mortgaged property as their primary residence or the spouse remarries, the mortgage is to be repaid within 180 days.
    6. In the event of the retirement of an eligible employee holding a University mortgage and he/she meets the age and service requirements for University retirement benefits, the University mortgage may continue until maturity if payments are made in a timely manner and if the mortgaged property continues to be the primary residence of the eligible employee. When the mortgaged property no longer is the primary residence of the eligible employee, the mortgage is to be repaid within 180 days.
    7. Except as described under No. 5 and No. 6 above, if a mortgage holder ceases to be a full-time employee of the University or no longer occupies the mortgaged property as a primary residence, the options on settlement of the mortgage are as follows:
      1. If less than five years service, the mortgage must be satisfied within 90 days from date of change in employment status or date eligible employee no longer occupies property as primary residence
      2. If more than five years of service and
        1. termination is involuntary, the mortgage must be satisfied within 90 days from date of separation or within one year of notice of termination or change in employment status whichever is greater;
        2. termination or change in employment status is voluntary, the mortgage must be satisfied within 180 days from date of separation or change in employment status;
        3. eligible employee no longer occupies property as a primary residence, the mortgage must be satisfied within 180 days from date eligible employee no longer occupies property as primary residence.
    8. If a mortgagor ceases to be eligible for a mortgage and does not satisfy the mortgage under the options stated under No. 7 above, the interest rate on the University mortgage may be increased to the maximum rate of interest then lawful in the State of Delaware or other appropriate action may be taken by the University including and without being limited to foreclosure and transfer of deed.
    9. Mortgages considered jumbo mortgages by the bank community, currently defined as $275,000 and above and adjustable periodically, will be charged an interest rate of 0.4% above the normal rate.

See the Neighborhood Mortgage Assistance Program for information on local home purchases.