Dawn Regan loves her job as a clerk at the Cherry Hill municipal building, but she does not love the half-hour commute from her one-bedroom apartment in Gloucester Township.

"It's not bad on mileage," she said, "but it's all back roads."

With the announcement that this fall Cherry Hill will be the 15th city to participate in the state's Live Where You Work program, Regan is considering a move.

The initiative to cut traffic and increase homeownership encourages a community's workers to become full-time residents. It began in Trenton and Jersey City in February 2008.

"It's an exciting time," said Mayor Leo McCabe of Glassboro, which joined the program last week. "The shovel's in the ground. There's no waiting." Atlantic City and Evesham also participate.

Live Where You Work, which is managed by the Housing and Mortgage Finance Agency and the state Department of Community Affairs, provides low-interest, subsidized loans and down-payment assistance to employees who buy houses near their employers.

So far, it has secured mortgages for 28 homes worth a total of $4.2 million. An additional 45 applications, totaling $7.1 million, are being processed.

State Community Affairs Commissioner Joseph V. Doria Jr. said that the program had a slow beginning, but that he was hopeful for the future.

"It's taken a while because of this present economy," he said. "The price of a home is decreasing, but people are afraid to take that risk."

Marge Della Vecchia, executive director of the finance agency, said some changes had been made to the program to entice home buyers and stimulate local economies.

The program lowered interest rates on its 30-year fixed-rate mortgages in May to 5.5 percent, from 6.5 percent. The national average is 5.68 percent, according to Interest.com.

"We have a forgivable loan of up to 5 percent of the mortgage to pay for opening and closing costs," Della Vecchia said. "If you stay in the home for five years, you don't have to repay it."

Approved participants can also tap into the federal first-time home-buyer tax credit early, she said. The "prefund" of up to $8,000 is available for the down payment, but must be repaid after the buyer receives the credit on his or her 2009 taxes.

"While it's great to get a refund at the end," she said, "people need money at the table to get them into a house today."

Joseph Cardona of Rowan University in Glassboro said faculty members could benefit from a similar school program that started in 2001 and has offered $1,500 a year for 10 years if they moved closer to campus.

"We know this works," he said. With Live Where You Work "on top of that, we expect a lot more people to participate."

Family income must fall within limits to qualify in target areas. Throughout much of South Jersey, a household of one or two adults needs a combined income of less than $102,720. Households with three or more can earn no more than $119,840.

Live Where You Work mortgages are sold through local lenders, Doria said, but they eschew the adjustable rates, points, and exclusions found in typical mortgages.

"This is an opportunity to get a boring mortgage," he said. "It's not the kind that causes problems."

One of the primary goals is to boost the economy by investing in responsible homeownership, Doria said.

"In every way," he said, "this program is dedicated to the community and preserving the middle class."

But several housing advocates have said the program does not address some of the root causes of the state's flagging homeownership.

Arnold Cohen, policy coordinator for the nonprofit Housing and Community Development Network of New Jersey, said Live Where You Work did not lower prices enough to make housing affordable to those who needed it most.

"It helps by reducing the cost of down payments," he said, "but it doesn't necessarily get at what's affordable for the person."

The goal, Cohen said, should be to reduce housing costs to less than 30 percent of a person's income, whether owning or renting.

Additionally, the program has not focused on places such as Parsippany, Plainsboro, and Cranbury, areas of the state with the most job growth.

"Those are places you want to be able to target," Cohen said, "so people can afford to live close to those jobs."

The Smart Housing Incentives Act, a bill that would provide incentives for communities like Parsippany to build low- and middle-income housing for renters and homeowners, has stalled in the Legislature.

"I don't want to criticize [Live Where You Work] for these limitations," Cohen said, "but it's part of an array of programs that are out there and that we need to be putting in place."

David Petrovich, executive director of the Society for the Preservation of Continued Homeownership, which helps homeowners through foreclosures, said that instead of offering more mortgages, the state should focus on creating and retaining jobs and reining in health-care costs.

"We need to get a handle on all the other expenses that make homeownership less affordable," he said.

Councilman David Fleisher said he had championed Live Where You Work for Cherry Hill because it represented a "trifecta of smart government."

"It's good for individuals looking to live in the town," he said. "It's good for the environment and life in Cherry Hill, because of shorter commutes and less traffic. And it's good for every homeowner, because the increased demand for houses helps everyone's property values."

Fleisher said that he expected a lag time as people learned about the program - there have been no mortgage applications yet from South Jersey - but that he anticipated a positive response.

"We're going to do whatever we can to move this along," he said.

Although she worries about the economy and her credit score, Regan, 30, said she looked forward to moving to Cherry Hill with her husband.

"If it all works out," she said, "I'd like to have kids here."

Contact staff writer Wallace McKelvey at 856-779-3917 or mckelvw@phillynews.com.