55:14K-53 - Rules, regulations 

55:14K-53.   Rules, regulations 
     9.   The agency is hereby authorized to promulgate, in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), all rules and regulations necessary or expedient to the effectuation of the purposes and provisions of this act. 

    L.1992,c.114,s.9. 
 
55:14K-54.Short title1. This act shall be known and may be cited as the "Affordable Home Ownership Opportunities Act of 1995."

L.1995,c.343,s.1.
 
55:14K-55.Findings, etc. relative to housing for low and moderate income families
2. The Legislature finds, determines and declares:

a. Housing problems in this State have been, and continue to be, acute, especially in that adequate accommodations, at affordable cost, are increasingly unavailable to lower-income families, and prospective home buyers in all but the higher income categories are thwarted by the formidable costs of home acquisition.

b. Accordingly, it is the purpose of this act to establish a program to aid nonprofit organizations in endeavors to develop home-ownership opportunities for lower-income purchasers who are prepared to invest their personal efforts in the construction or rehabilitation of their own housing units.

L.1995,c.343,s.2.
 
55:14K-56.Definitions
3. As used in this act:

"Affordable Home Ownership Opportunities Bonds" means any bonds of the New Jersey Housing and Mortgage Finance Agency that provide funds to facilitate the provisions of this act.

"Agency" means the New Jersey Housing and Mortgage Finance Agency.

"Annual income" means total income, from all sources, during the last full calendar year preceding the filing of an application for a loan pursuant to this act.

"Bonds" means bonds, notes or any other form of evidence of indebtedness of the agency, bearing either a fixed rate or a variable rate of interest, issued by the agency.

"Eligible project" means a project for the creation of low or moderate income housing which meets the standards of eligibility for loans under the program created by this act.

"Eligible purchaser" means a purchaser of a dwelling unit in an eligible project to whom a loan may be made under the program pursuant to section 5 of this act.

"Fund" means the Affordable Home Ownership Opportunities Fund established by section 5 of this act.

"Housing region" means a housing region as defined in subsection b. of section 4 of the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-304) and determined by the Council on Affordable Housing pursuant to section 7 of that act, P.L.1985, c.222 (C.52:27D-307).

"Local enforcement authority" means any officer or agency of local government responsible for the implementation or enforcement of land-use and building regulations established by or pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) or the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).

"Low income" means a gross annual household income equal to 50% or less of the median gross annual household income for households of the same size within the relevant housing region.

"Moderate income" means a gross annual household income equal to not more than 80%, but more than 50% of the median gross annual household income for households of the same size within the relevant housing region.

"Program" means the Affordable Home Ownership Opportunities Program created by this act.

"Qualified nonprofit organization" means any corporation or association of persons organized under Title 15A of the New Jersey Statutes, having for its principal purpose, or as a purpose ancillary to its principal purpose, the improvement of realistic opportunities for low income and moderate income housing, as defined pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), being within the description of section 501(c)(3) of the United States Internal Revenue Code (26 U.S.C. 501(c)(3)), having been determined by the agency to be a bona fide organization not under the effective control of any for-profit organization or governmental entity, and appearing capable, by virtue of past activities, qualifications of staff or board, or other features, of furthering the purposes of this act.

"Substantial rehabilitation" means repair, reconstruction or renovation which (1) costs in excess of 60% of the fair market value of a rehabilitated dwelling after such repair, reconstruction or renovation, or (2) renders a previously vacant and uninhabitable dwelling safe, sanitary and decent for residential purposes, or (3) converts to safe, sanitary and decent residential use a structure previously in non-residential use.

L.1995,c.343,s.3.
 
55:14K-57.Amount set aside to provide mortgage loans 4. a.  In furtherance of the public policy of this act, the agency shall set aside, from the bonds of the agency, an amount to be determined by the agency of the total aggregate original principal amount of such bonds to provide mortgage loans to purchasers under the Affordable Home Ownership Opportunities Program created pursuant to this act.

b.The purpose of these bonds shall be to assist qualified nonprofit organizations in the creation of eligible low and moderate income housing projects in the manner and to the extent provided in the program established by this act.

c.The bonds shall bear the rate or rates of interest as may be determined by the agency, which interest shall be payable as may be determined by the agency.

L.1995,c.343,s.4.
 
55:14K-58.Affordable Home Ownership Opportunities Fund established
5. a.  There is hereby established in the agency the Affordable Home Ownership Opportunities Program and the Affordable Home Ownership Opportunities Fund, which fund shall be continuing and nonlapsing, for the purpose of assisting the financing of eligible projects pursuant to this act.  Moneys in the fund not immediately required for payment or liquid reserves may be invested and reinvested by the agency in the same manner in which other agency funds may be invested.

b. There shall be paid into the fund:  (1)  otherwise uncommitted reserves of the agency and available for this purpose, in amounts to be determined by the agency to be prudent and appropriate;  (2) any income earned upon investment of moneys in the fund by the agency pursuant to subsection a. of this section; and  (3) any other funds that may be available to the fund through appropriation by the Legislature or otherwise.

c. Moneys in the fund shall be used exclusively for  (1) funding loans pursuant to section 6 of this act and  (2) defraying the administrative costs of the agency in carrying out the purposes and provisions of this act, but not more than two per cent of the proceeds of the bonds authorized and actually expended pursuant to section 4 of this act shall be used for such administrative costs.

d. Interest upon loans to eligible purchasers shall be established by the agency at the lowest rate compatible with the integrity of the fund and its proper administration, maintenance of adequate reserves and the ability of the agency to pay the interest upon and repay the principal of bonds under the program.

L.1995,c.343,s.5.
 
55:14K-59.Loans by agency authorized
6.  a.  The agency is hereby authorized to make loans under the program to qualified purchasers of dwelling units from nonprofit organizations undertaking eligible projects that meet the requirements of section 7 of this act.

b. Loans made pursuant to this act shall be to low and moderate income purchasers of dwelling units within the project for which the loan is made, who intend making such dwelling units their principal place of residence, and who have entered into agreements with a qualified nonprofit organization to participate to the extent of their abilities in the actual work of construction or substantial rehabilitation.  The terms of any such agreement shall provide that, if the prospective purchaser fails or refuses to carry out his obligations thereunder, or withdraws from participation in the project before completion of the project or any portion thereof to which his obligation extends, the nonprofit organization shall provide for substitution of another prospective purchaser who shall succeed to all the rights and obligations of the previous participant subsisting at the time of substitution.

(1) Loans made pursuant to this subsection shall be made only to pre-qualified home purchasers whose eligibility for such loans under the terms of this act has been determined by the agency.

(2) A loan made to an eligible purchaser out of funds granted pursuant to this act shall be secured by a mortgage held by the agency.  The mortgage shall be secured by the property purchased by the eligible purchaser and shall be amortized monthly, with interest not to exceed a rate consistent with the provisions of subsection d. of section 5 of this act.  The loan shall be repayable in full upon sale, lease or other transfer of the property resulting in that property's ceasing to be the principal residence of that purchaser; except that such eligible purchaser shall be entitled at any prior time, and without ceasing to maintain the property as his principal residence, to make repayment in whole or part.  The agency may forebear the payment of interest to the extent it deems prudent and as may be permitted by the conditions of the bonds in any case in which it finds good cause and that the exaction of such payment would work an exceptional hardship upon the borrower.

L.1995,c.343,s.6.
 
55:14K-60.Eligibility for loans7. A project of new construction or substantial rehabilitation by a nonprofit organization shall be eligible for a loan under this act if (1) the homes to be constructed or substantially rehabilitated under the project are located within an identifiable neighborhood in which median family income does not exceed the current standard of "moderate income" pursuant to the contemporaneous standards of the Council on Affordable Housing; (2) the homes to be constructed or substantially rehabilitated under the project are sufficient in number and located on the same or contiguous parcels of land or within such proximity to each other as to render the cost per unit of housing practicable for acquisition by lower-income purchasers; and (3) each home constructed or substantially rehabilitated within the project will conform to all requirements of the State Uniform Construction Code, except as to the waiver of any fee or other requirement pursuant to subsection b. of section 9 of this act.

L.1995,c.343,s.7.
 
55:14K-61.Selection of eligible projects
8. In selecting eligible projects to receive loans from the fund, the agency shall accord priority to programs in which:

a. Private donors or local units of government contribute land or money to make the program feasible.

b. Financial or other contributions from public or private sources, including tax abatements, waivers of fees relating to development, waivers of construction, development or zoning requirements, will reduce the cost of homes to be constructed or substantially rehabilitated.

c. Use of the loans will be efficient, as measured by the number of dwelling units produced in proportion to the amount of all loans, having due regard to the difference of construction costs in different housing regions and to the relative costs of different family-size units.

d. Construction costs per square foot compare favorably with average costs in the same housing region.

e. The project will contribute significantly to the rehabilitation of or removal or prevention of blight in the area in which it is located, in the judgment of the agency, regardless of whether the area has been formally designated, in accordance with statutory procedures, as blighted or in need of rehabilitation.

f. The design of the project provides for the involvement of local residents in its planning and execution.

g. The design of the project encourages the development of housing units suitable for and attractive to households consisting of extended families, comprising persons related by birth, marriage or descent, being of different generations or adult siblings of the same generation, or both, living together as a single household and sharing accommodations, facilities and functions within the family unit appropriate to their respective ages, abilities and resources.

L.1995,c.343,s.8.
 
55:14K-62.Eligible project declared public work
9.Any eligible project that conforms to the standards and requirements of this act and the regulations promulgated pursuant thereto is hereby declared to be a public work in furtherance of the housing policy of this State, and any contribution of property, money or services in furtherance of such a program by a unit of local government shall be deemed an expense or cost incurred in furtherance of a public purpose.

L.1995,c.343,s.9.
 
55:14K-63.Rules, regulations10. The agency is authorized to promulgate the rules and regulations necessary to effectuate the provisions and purposes of this act in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).  In developing these regulations the agency shall examine and analyze any existing programs of similar type that have been successfully effectuated in other jurisdictions, and shall endeavor to formulate criteria and procedures, both for the design and operation of viable projects and for the selection of and obligations assigned to individual participants who shall be assisted by the program.

L.1995,c.343,s.10.
 
55:14K-64.Short title
1.This act shall be known and may be cited as the "Rental Housing Incentive Guarantee Program."

L.1995,c.359,s.1.
 
55:14K-65.Findings, declarations relative to Rental Housing Incentive Guarantee Program
2. The Legislature hereby finds and declares:

a. The present depressed condition of the housing industry in this State is both an obstacle to economic recovery and a source of distress to those among our population for whom housing at affordable cost has become inadequate, insufficient or unavailable.

b. By enactment of P.L.1992, c.114 (C.55:14K-45 et seq.) this Legislature recognized the severity of this problem and endeavored to provide a stimulus to the housing industry through a program of loans and loan guarantees for housing development, to be administered by the New Jersey Housing and Mortgage Finance Agency (HMFA).

c. The aforesaid enactment, however, is limited to the encouragement of housing that is to be developed for sale to individual home owners; whereas for the foreseeable future the most pressing need for housing will be among those lower-income groups for whom home ownership remains out of reach, and to whom it is essential that affordable rental housing of a decent standard of habitability be made available.

d. The Assembly Task Force on HMFA Operations, which issued its general recommendations on January 27, 1993, recommended that additional resources be allocated towards significantly increasing rental housing production.

e. The Assembly Housing Committee, in both the 1992-1993 and 1994-1995 legislative sessions, has provided forums on numerous occasions to the banking industry, HMFA, and builders of rental housing, which enabled these parties to formulate a plan to remove the barriers to the construction of affordable rental housing.

f. It is, therefore, the intention of this act to make available, under administration of the HMFA, loan guarantees to developers of rental housing upon terms that include assurances of long-term affordability to low and moderate income renters of a significant proportion of the dwelling units thus developed.

g. It is the further intention of this act to suggest that a portion of the funding provided to the New Jersey Economic Development Authority (NJEDA) under the "Economic Recovery Act" P.L.1992, c.16 (C.34:1B-7.10 et al.), be directed to the development of affordable rental housing.

L.1995,c.359,s.2.
 
55:14K-66.Definitions3.As used in this act:

"Agency" means the New Jersey Housing and Mortgage Finance Agency.

"Construction costs" means all expenditures made or incurred by a qualified housing developer, inclusive of reasonable pre-construction costs, prior to the obtaining of permanent financing on a completed housing development.

"Construction loan" means a loan made to a qualified developer for the financing of construction costs.

"Development" means development within the meaning of the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).

"Fund" means the Rental Housing Incentive Guarantee Fund established pursuant to section 4 of this act.

"Housing developer" means any person, firm, corporation or association of persons that has undertaken or proposes to undertake a housing development.

"Housing development" means development undertaken for the purpose of creating one or more residential units, whether detached or attached or in the form of multiple dwellings, for occupancy under rental tenure by persons who shall occupy such units as their usual and permanent residence, together with any structures or facilities appurtenant or ancillary thereto.

"Institutional lender" means any bank or trust company, savings bank, national banking association, savings and loan association, or building and loan association maintaining an office in this State, or any insurance company or any mortgage banking firm or mortgage banking corporation authorized to transact business in this State.

"Loan guarantee" means an agreement by the agency to guarantee up to 30 percent of the remaining principal balance of a loan made to a qualified developer by an institutional lender, either through agreements to purchase loans or to otherwise indemnify the lender, up to an amount not to exceed $300,000.

"Permanent financing" means long-term financing secured by a qualified housing developer through an institutional lender, and may include construction costs and costs associated with developing, constructing, and managing a housing development.

"Pre-construction costs" means the amount approved by the agency as an appropriate expenditure that may be incurred prior to the obtaining of permanent financing on a completed housing development, exclusive of the actual costs of construction and preparatory and ancillary to actual construction, and may include, without limitation: (1) payments for options, deposits or contracts to purchase properties on the proposed housing development site; (2) legal and organizational expenses, including attorneys' fees, and salaries, office rent and other incidental expenses for a project manager and office staff; (3) fees for preliminary feasibility studies, planning advances, borings, surveys, engineering and architectural work, and fees for the services of architects, engineers, planners and attorneys in connection therewith; (4) expenses for tenant surveys and market analyses; and (5) such other expenses as the agency may deem  necessary and appropriate to effectuate the purposes of this act.

"Qualified housing developer" means a housing developer who has qualified for a loan guarantee pursuant to section 5 of this act.

"Qualified housing development" means a housing development for which a loan guarantee may be made pursuant to section 5 of this act.

L.1995,c.359,s.3.
 
55:14K-67.Rental Housing Incentive Guarantee Fund established
4.  a.  There is hereby established in the agency the Rental Housing Incentive Guarantee Fund, which shall be non-revolving, for the purpose of funding loan guarantees authorized pursuant to this act.

b. There shall be paid into the fund:  (1) moneys allocated to the agency under agreements made with the New Jersey Economic Development Authority pursuant to section 9 of this act and (2) any other funds that may be made available to the fund by the agency, such as funds available from bond redemptions or refundings, federal funds, available reserves, moneys available from the Revolving Housing Development and Demonstration Grant Program fund established pursuant to section 5 of P.L.1967, c.82 (C.52:27D-63), or any moneys available from any other program the purpose of which is to promote affordable housing, up to an amount not to exceed $10,000,000, which shall be based on lender participation and program demands.

c. Moneys in the fund shall be used exclusively for (1) making payments in fulfillment of the terms of loan guarantees entered into pursuant to section 5 of this act; and (2) defraying the administrative costs of the agency in carrying out the purposes and provisions of this act.

L.1995,c.359,s.4.
 
55:14K-68.Powers, duties of agency
5.  a.  The agency is hereby authorized to contract with institutional lenders to guarantee on behalf of a qualified housing developer the repayment of up to 30 percent of the full principal balance of a loan outstanding at the time of any default, up to a maximum of $300,000, provided subsection c. of this section is complied with.

b. The agency shall establish within the fund sufficient reserves and liquid reserves to provide a sufficient and actuarially sound basis for its pledges contained in any guarantee contract entered into pursuant to subsection a. of this section.

c. The agency shall adopt rules and regulations governing the issuance of loan guarantees pursuant to this section, including matters related to the duties and the exercise of the powers of the agency under this section, and the provision of technical assistance to developers, including:

(1) procedures for the submission of requests for such guarantees;

(2) standards and requirements governing the allocation of guarantees to applicant institutional lenders, and determining the fees to be charged therefor and the manner of payment of those fees; and

(3) after consultation with participating institutional lenders, reasonable restrictions as to the maturities and interest rates of any loan, or the return realized therefrom by the institutional lender, and requirements as to commitments by institutional lenders with respect to loans upon which guarantees may be issued.

d. A loan guarantee may be made only with respect to a housing development of 25 units or fewer, or to a segment not exceeding 25 units of a larger housing development projected or in progress.

e. A loan guarantee shall include assurances of long-term affordability to low and moderate income tenants for a portion of the units in the development.

f. A loan guarantee with respect to any housing development may be made when it has been demonstrated to the satisfaction of the agency that the qualified housing developer has met the criteria for a loan guarantee as specified in this section.  The agency shall make such a determination within 30 days of submission of an application by a qualified housing developer.

g. Every loan subject to a loan guarantee made pursuant to this section shall be secured by a first lien upon the real property concerned in the development, or segment thereof, with respect to which the loan is made and such other collateral as the agency may consider necessary to secure the interests of the fund in accordance with the provisions and purposes of this act.   The agency may, if it deems necessary, require the loan to be secured by a personal loan guarantee by the developer or by a lien upon other real property contained in a development not included in the segment with respect to which the loan is made, or upon any other real property, or interest therein, belonging to the qualified housing developer to whom the loan is made; provided, however, that no personal loan guarantee shall be required of any agent or officer of a nonprofit housing developer.

h. The provisions of P.L.1995, c.359 (C.55:14K-64 et al.), to the extent that they can be read to be in conflict with the provisions of P.L.1983, c.530 (C.55:14K-1 et seq.), shall be read to enlarge the powers granted by that act, or when directly contrary, supersede any such provision.

L.1995,c.359,s.5.
 
55:14K-69.Agreements between agency and authority6.For the purpose of carrying out the housing component of mixed use projects of the New Jersey Economic Development Authority consisting of both housing and commercial development, the agency may enter into agreements with that authority and receive funds from the authority for any of the purposes authorized by this act and specified in the agreement between the agency and the Economic Development Authority.

L.1995,c.359,s.6.
 
55:14K-70.Funding provided by New Jersey Economic Development Authority
7.The New Jersey Economic Development Authority shall provide funding for any agreements entered into pursuant to section 6 of P.L.1995, c.359 (C.55:14K-69) on the basis of demand, utilizing (1) such amounts from the Economic Recovery Fund established pursuant to P.L.1992, c.16 (C.34:1B-7.10 et al.) as the authority determines to be necessary, within the limits of funding available from that fund, based upon executed agreements between the authority and the Housing and Mortgage Finance Agency concerning mixed-use housing and commercial developments pursuant to section 3 of P.L.1974, c.80 (C.34:1B-3) and (2) other moneys of the authority, including but not limited to moneys available from other business loan programs administered by the authority, that the authority determines to be necessary.

L.1995,c.359,s.7.
 
55:14K-71.Rules, regulations
10.The agency is hereby authorized to promulgate, in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), all rules and regulations necessary to effectuate the purposes of this act.

L.1995,c.359,s.10.