Prohibits certain financial institutions from requiring certain disabled veterans to include anticipated property tax obligations as part of mortgage applications.

S3371

SENATE, No. 3371

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 5, 2026

Sponsored by:

Senator� JAMES W. HOLZAPFEL

District 10 (Monmouth and Ocean)

SYNOPSIS

���� Prohibits certain financial institutions from
requiring certain disabled veterans to include anticipated property tax
obligations as part of mortgage applications.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning residential mortgage application
requirements, supplementing Title 17 of the Revised Statutes, and amending
P.L.1948, c.259.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� (New section)� a.� As used
in this section:

���� �Disabled veterans� property
tax exemption� means the exemption authorized pursuant to P.L.1948, c.259
(C.54:4-3.30 et seq.) or section 2 of P.L.2021, c.75 (C.54:4-3.30a).

���� �Qualified veteran� means a
veteran who has been declared by the United States Department of Veterans'
Affairs, or its successor, to have a 100 percent service-connected disability.

���� �Surviving spouse� means the
surviving spouse of a qualified veteran.

���� b.� (1)� A qualified veteran
or surviving spouse who seeks a mortgage loan from a State-chartered bank,
mortgage company, or credit union for a dwelling house that is to be occupied
as the person�s principal residence shall not be required by that bank, mortgage
company, or credit union, as part of the underwriting requirements for that
mortgage, to indicate or disclose the annual property tax obligation on that
dwelling house, provided that the assessor of the municipality in which the
property is located certifies to the State-chartered bank, mortgage company, or
credit union on a form promulgated for this purpose by the Commissioner of
Banking and Insurance that the qualified veteran or surviving spouse currently
satisfies all eligibility requirements for the disabled veterans� property tax
exemption, other than ownership of the property.

���� (2)� A qualified veteran or
surviving spouse who seeks a mortgage to refinance an existing mortgage on a
dwelling house that is the person�s current principal residence shall not be
required by that bank, mortgage company, or credit union as part of the underwriting
requirements for that mortgage, to indicate or disclose the annual property tax
obligations on that dwelling house, provided that the assessor of the
municipality in which the dwelling house is located certifies to the
State-chartered bank, mortgage company, or credit union on a form promulgated
for this purpose by the Commissioner of Banking and Insurance that the
qualified veteran or surviving spouse currently satisfies all eligibility
requirements for the disabled veterans� property tax exemption, including
ownership of the property.

���� c.� If, on the date that the
qualified veteran or surviving spouse applies for a mortgage on a dwelling
house, the qualified veteran or surviving spouse owns and occupies another
dwelling house in the State as their principal residence, the mortgage shall
not be approved until the qualified veteran or surviving spouse has:

���� (1) provided evidence to the
State-chartered bank, mortgage company or credit union that the current
dwelling house has been sold or transferred or is under contract for sale or
transfer; or

���� (2) notified the assessor of
the municipality in which the current dwelling house is located that the
qualified veteran or surviving spouse will no longer be occupying the dwelling
house as their legal residence.

���� 2.� Section 2 of P.L.1948,
c.259 (C.54:4-3.31) is amended to read as follows:

���� 2.�
a.
� All exemptions
from taxation under P.L.1948, c.259 (C.54:4-3.30 et seq.) shall be allowed by
the assessor upon the filing with him of a claim in writing under oath, made by
or on behalf of the person claiming the same, showing the right to the exemption,
briefly describing the property for which exemption is claimed and having
annexed thereto a certificate of the claimant's honorable discharge or release
under honorable circumstances, from active service in any branch of the Armed
Forces of the United States and a certificate from the United States Department
of Veterans' Affairs or its successor, certifying to a service-connected
disability of such claimant of the character described in section 1 of
P.L.1948, c.259 (C.54:4-3.30).� In the case of a claim by a surviving spouse of
such veteran, the claimant shall establish in writing under oath that the
claimant is the owner of the legal title to the premises on which exemption is
claimed; that the claimant occupies the dwelling house on said premises as the claimant's
legal residence in this State; that the veteran shall have been declared,
either during the veteran's lifetime or after the veteran's death, by the
United States Department of Veterans' Affairs to have or to have had a
service-connected disability of a character described in this act, or, in the
case of a claim for an exemption under subsection c. of section 1 of P.L.1948,
c.259 (C.54:4-3.30), that the veteran shall have been declared to have died in
active service; that the veteran was entitled to an exemption provided for in
this act, except for an exemption under paragraph (2) of subsection b. and
subsection c. of section 1 hereof, at the time of death; and that the claimant
is a resident of this State and has not remarried.� Such exemptions shall be
allowed and prorated by the assessor for the remainder of any taxable year from
the date the claimant shall have acquired title to the real property intended
to be exempt by this act.� Where a portion of a multiple-family building or
structure occupied by the claimant is the subject of such exemption, the
assessor shall aggregate the assessment on the lot or curtilage and building or
structure and allow an exemption of that percentage of the aggregate assessment
as the value of the portion of the building or structure occupied by the
claimant bears to the value of the entire building or structure.

����
b.� (1)� A veteran or
surviving spouse who has applied for a mortgage pursuant to the provisions of
section 1 of P.L.���� , c.���
(C. ) (pending
before the Legislature as this bill) shall submit a preliminary application for
a property tax exemption on the dwelling house, on a form promulgated for this
purpose by the Commissioner of Banking and Insurance.� At a minimum, the
preliminary application shall include the name and contact information for each
State-chartered bank, mortgage company, or credit union from which the veteran
or surviving spouse seeks a mortgage, as well as all of the documentation
required in subsection a. of this section.

����
(2)� In the case of an
application for a mortgage related to a dwelling house in which the veteran or
surviving spouse does not currently reside, the assessor shall certify whether
the veteran or surviving spouse meets all of the eligibility requirements for the
property tax exemption, except for the ownership of the property.� In the case
of an application for a mortgage related to a dwelling house in which the
veteran or surviving spouse currently resides, the assessor shall certify
whether the veteran or surviving spouse meets all of the eligibility
requirements for the property tax exemption, including the ownership of the
property.

����
(3)� After the assessor has
made a determination pursuant to paragraph (2) of this subsection, the assessor
shall transmit a copy of the certification to each State-chartered bank, mortgage
company, or credit union indicated on the veteran or surviving spouse�s
preliminary application.

����
(4)� Once the veteran or
surviving spouse has acquired the subject property, the person shall formally
apply to the assessor pursuant to subsection a. of this section in order to
obtain the property tax exemption.� The determination made for the preliminary
application shall not be binding on the final application.

(cf: P.L.2019, c.413, s.2)

���� 3.� (New section)� The
Commissioner of Banking and Insurance shall identify and publish on the
department�s Internet website all of the State-chartered banks, mortgage
companies, and credit unions doing business in the State in order to assist
qualified veterans in finding a financial institution with which to apply for a
mortgage in accordance with the provisions of this act.

���� 4.� (New section)� The
Commissioner of Banking and Insurance shall promulgate such rules, regulations,
and forms as may be necessary to effectuate the provisions of this act pursuant
to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et
seq.), not later than the first day of the seventh month next following its
enactment.

���� 5.� This act shall take effect
on the first day of the seventh month next following enactment, except that the
Commissioner of Banking and Insurance shall take such anticipatory actions in
advance thereof as may be necessary to implement the provisions of this act.

STATEMENT

���� This bill prohibits certain
financial institutions from requiring certain disabled veterans to include
anticipated property tax obligations as part of a mortgage applications.

���� Under current law, a veteran
who has been declared by the United States Department of Veterans' Affairs to
have a 100 percent service-connected disability, and meets all of the
requirements for a veterans� property tax exemption, may apply to the
municipality in which their principal residence is located for a property tax
exemption.� The surviving spouse of such a veteran is also entitled to the
property tax exemption for the duration of their widowhood or widowerhood,
provided that certain eligibility criteria are met.

���� Currently, when a person,
including a disabled veteran or their surviving spouse, seeks a mortgage to
purchase a home, banks, mortgage companies, and credit unions generally require
that the person qualify for the mortgage based on the calculated monthly
mortgage payment for the mortgage loan, plus the monthly share of the annual
property tax bill.� Although these persons may qualify for a total property tax
exemption after purchasing the property, the inclusion of property tax
obligations in the mortgage application can make it significantly more
difficult for these persons to obtain a mortgage, as well as increase the
interest rates that may be approved for these mortgage applicants.

���� Under the bill, when a
qualified veteran who has been declared by the United States Department of
Veterans' Affairs to have a 100 percent service-connected disability, or their
surviving spouse, seeks a mortgage loan from a State-chartered bank, mortgage
company, or credit union for a dwelling house that is to be the person�s
principal residence, the bank, mortgage company, or credit union may not
require the person to indicate or disclose the annual property tax obligation
on that dwelling house as part of the underwriting requirements for the
mortgage loan, provided that the assessor of the municipality in which the
property is located determines that the veteran or surviving spouse satisfies
all of the eligibility requirements for the disabled veterans� property tax
exemption, other than the ownership of the property, and certifies the same to
the State-chartered bank, mortgage company, or credit union on a form
promulgated for this purpose by the Commissioner of Banking and Insurance.� In
the case of a mortgage refinance application, the qualified veteran or
surviving spouse would be required to meet all of the eligibility requirements
for the disabled veterans� property tax exemption, including ownership of the
property.