The Courier-News from Bridgewater, New Jersey • Page 35

tut Friday. September 30. 1 91 1 ur Nation's Housing New loan plan available now By KENNETH R. HARNEY Land Sales WASHINGTON What could become the HUNTERDON Page D2 hottest mortgage-financing tool for new-home buyers this fall a no-downpayment loan carrying discount rates and no insurance fees what soever should be available nationwide this MIDDLESEX Page D2 month. Known as a "reserve account" mortgage, the loan is designed for would-be buyers who lack downpayments but have adequate incomes to handle monthly payments at rates slightly SOMERSET Page D4 Deiow tnose in uie regular marketplace.

UNION Page D5 The reserve-account plan is being introduced without fanfare by the Federal National Mort gage Association It will be the first no-money-down, non-government-insured form of financing widely available to consumers Condos have room for expansion in years. Here's how it will work: Under a special program Fannie Mae is making available to lending institutions this month. consumers will be able to qualify for loans up to $108,300. The mortgages will be restricted to purchasers of single-family homes who will occupy the property. The loans will require no downpayment from buyers.

But it will require the builder or seller of the house or an outside party to put 5 percent ot the purchase price into an interest-bearing fully refundable savings account supervised by By NADIA ZIGALKA Courier-News Writer EDISON New concepts in condominium living abound in Park Gate, a community of 285 units designed by a builder who has won national awards for construction excellence. Barry Rosengarten of Perth Amboy built the homes in clusters around a courtyard giving access to the driveway of each dwelling an arrangement that affords greater privacy and is believed to be unique in this area. Unlike the usual multi-family structures commonly associated with condominiums, all are single-family houses with patios. Construction is in country French contemporary style, combining old world touches with modern convenience and characterized by French mansard roof lines and hand-brushed stucco exteriors. There are five one- or two-story models, each with variations.

A curving garden walk leads to one named Accent, where box bay windows, located primarily in dining and living rooms, are among other unusual features. They project inside as well as outside, giving a shadow box effect. Also innovative is the master bathroom, which is compartmented to accommodate the showers, the tub and all other accoutrements. One wall is mirrored, and there is a medicine cabinet with two vanities, each enclosing a sink. The master bath connects back to back with a guest bath.

The large living room has an angled wood-burning fireplace and opens onto a garden terrace. The kitchen is equipped with a breakfast bar, custom cabinets and color-coordinated appliances, including an Oven, a range, a dishwasher and ventilating exhaust hood. There also are a dining room, master 'bedroom suite with two large closets and its own private patio, a library-den which can be used as an additional bedroom, and a two-car garage with radio-controlled garage doors. A glass-encased vestibule leads to the model called Accent Tree Top, a ranch with a second level that offers possibilities for expansion into what could amount to another apartment. Thg space permits a library-bedroom, mas-' ter suite with walk-in closet, master bath and gourmet kitchen, plus one and a half other baths, ample storage and a large wood deck.

An already-expanded variation has two full baths, a 25xl4-foot "great room," two master bedroom suites, each with its own large bath and 9x10-foot walk-in closet, kitchen and large library-den, plus storage space and wood deck. A third bedroom may be added to this as an option. Other models are Bravo, Celebration, Domaine and Elan, all embodying the standards for which Rosengarten has been recognized. A swimming pool is planned to serve all five. Prices range from the $90 thousands to the $170 thousands.

Rosengarten is perhaps best known for his urban redevelopment approach to Bayside Villa and Bayside Terraces in Perth Amboy, which won a number of national awards and a certificate of merit from the city. Park Gate is located several minutes from Exit 131 of the Garden State Parkway. From the parkway, turn right to Route 27 south, continue a half-mile and turn right on Christie Street, pass the Edison Memorial Tower to make left on Calvert Road, following this to the end and Stephenville Parkway, at which point turn left and proceed to Park Gate. For more information, call (201) 548-4220. tne lender originating the mortgage.

The account will function as a form of temporary equity stake on the buyer's behalf: Should the property go into default and foreclosure, Fannie Mae would lay claim to it. The builder or other contributor of the funds will be able to obtain all of the reserve money back, plus interest, as early as three years after the sale. A one-time non-refundable fee of 2.5 percent of the initial loan amount also will be charged the builder or seller of the house as a "loss reserve," a form of self-insurance for Fannie Mae. For the consumer, the plan will entail the following: No equity cash need go on the table at purchase. Closing or escrow costs will be borne by the buyer, seller or both.

Interest charges on the loan will be pegged to Fannie Mae's three- and five-year adjustable-rate mortgages. Initial rates on loans may be "bought down" even further than the quoted levels. For instance, a home builder who wants to advertise "No Money Down Mortgages Under 10 Percent!" can use Fannie Mae's regular "buy down" procedures to do so. Unlike most cut-rate financing plans, re serve-account loans will never involve so-called negative amortization" for the home buyers. Negative amortization means a buildup of additional debt for the consumer over the years, rather than a decrease.

It is a common feature of graduated-payment loan programs that defer interest to later years. Unlike VA or FHA loans, buyers will pay no mortgage insurance fees because there is no direct mortgage insurance imposed on the indi vidual buyers. FHA now requires insurance- premium payments up front. On the potential negative side for the con sumer, the reserve-account loan idea could encourage some home builders or individual sellers to pad their prices to cover the cost of the cash deposits required from them. However, since most builders already factor "buydowns" iHnJ" pi! and other financing charges into the final selling prices ot their units, this may be virtually unavoidable unless you bargain hard.

Where can you sign up for these no-money-down mortgages? Fannie May pumps money to consumers via thousands of lending institutions across the country. Some of these lenders will not have heard of the new program. (Tell them to check it out at their regional Fannie Mae office. 1983 Washington Post Co. French contemporary architecture prevails at the Park Gate condominium community of 285 single-family homes in Edison, This two-story model is called Accent..