Establishes mortgage assistance program for benefit of certain low- and moderate-income homeowners; appropriates $200 million.

A1456

ASSEMBLY, No. 1456

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman GABRIEL RODRIGUEZ

District 33 (Hudson)

SYNOPSIS

���� Establishes mortgage assistance program for benefit
of certain low- and moderate-income homeowners; appropriates $200 million.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning mortgage assistance for benefit of
certain low- and moderate-income homeowners, supplementing chapter 14K of Title
55, and making an appropriation.

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

���� 1.��� As used in P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill):

���� "Agency" means the
New Jersey Housing and Mortgage Finance Agency, established pursuant to section
4 of P.L.1983, c.530 (C.55:14K-4).

���� "Deep subsidy" means
mortgage assistance necessary to completely cover all mortgage payments in
arrears, including fees and other penalties for delinquent mortgage payments,
court costs, attorney�s fees, all other related fees and expenses incurred as a
result of the delinquency, and six months in advance monthly mortgage payments.

���� "Executive director"
means the Executive Director of the New Jersey Housing and Mortgage Finance
Agency.

���� "Imminent risk of
homelessness" means the risk of missing one or more monthly mortgage
payments after a qualifying economic hardship that causes a 50 percent or
greater reduction in the gross household income.

����
"Low-income
homeowner" means a homeowner with a gross household income equal to 50
percent or less of the median gross household income for households of the same
size within the housing region in which the housing is located.

����
"Moderate-income
homeowner" means a homeowner with a gross household income equal to more
than 50 percent but less than 80 percent of the median gross household income
for households of the same size within the housing region in which the housing
is located.

���� "Moderate subsidy"
means mortgage assistance necessary to completely cover all mortgage payments
in arrears, including fees and other penalties for delinquent mortgage
payments, court costs, attorney�s fees, all other related fees and expenses incurred
as a result of the delinquency, and two months in advance monthly mortgage
payments.

���� "Mortgage assistance
program" means the zero-interest, forgivable mortgage assistance program
established pursuant to section 2 of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).

���� "Principal
residence" means a homestead that is actually and continually occupied as
the permanent residence of a household, as distinguished from a vacation home,
real property owned and rented or offered for rent by the household, or other
secondary real property holdings.

���� "Qualifying economic
hardship" means:

���� (1)� the involuntary
termination of employment or loss of a primary or secondary source of income;

���� (2)� the death of a family
member;

���� (3)� a divorce or separation;

���� (4)� an illness, incapacity,
disability, or economic event that causes a substantial reduction in household
income; or

���� (5)� any other economic
hardship that the agency determines to be necessary to effectuate the purposes
of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill).

���� "Shallow subsidy"
means mortgage assistance necessary to completely cover two months in advance
monthly mortgage payments.

���� "Single-family
housing" means a one- to four-family residence, a condominium unit, a
cooperative unit, a combination of a manufactured housing and lot, or a
manufactured housing lot.

���� "Single subsidy"
means mortgage assistance necessary to completely cover one month in advance
monthly mortgage payments.

���� 2.� a.� There is established
in the New Jersey Housing and Mortgage Finance Agency a mortgage assistance
program, which shall provide zero-interest, forgivable mortgage loan awards in
the form of deep, moderate, shallow, or single subsidies to provide mortgage
assistance for low- or moderate-income homeowners who are in imminent risk of
homelessness, have experienced a qualifying economic hardship, have failed to
make one or more monthly payments on their mortgage, or are at risk of failing
to make one or more monthly payments on their mortgage.

���� (2)� The mortgage assistance
program shall provide:�

���� (a)�� deep subsidies for low-
or moderate-income homeowners who are in imminent risk of homelessness and have
failed to make three or more monthly mortgage payments;

���� (b)� moderate subsidies for
low- or moderate-income homeowners who have experienced a qualifying economic
hardship and are delinquent on any mortgage payments;

���� (c)�� shallow subsidies for
low- or moderate-income homeowners who are in imminent risk of homelessness;
and

���� (d)� single subsides for low-
or moderate-income homeowners who are at risk of missing a mortgage payment or
have experienced a qualifying economic hardship.

���� b.� (1)� A recipient homeowner
shall commit to use the home as the recipient�s principal residence for three
years following the use of a subsidy pursuant to this section.� The agency
shall forgive the loan payment, provided that the three-year commitment is
satisfied and the low- or moderate-income homeowner meets the other
requirements established pursuant to P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).

���� (2)� Each low- or
moderate-income homeowner who receives mortgage assistance through the mortgage
assistance program shall, prior to the issuance of a loan award, complete a
homeowner counseling course, as directed by the agency pursuant to subsection
c. of this section.� The homeowner counseling course may include, but not be
limited to, coursework concerning:��

���� (a)�� the maintenance of
housing costs, including methods for budgeting mortgage payments, utility
charges, property taxes, and any other applicable housing cost; and

���� (b)� the basics of home
finance, property taxes, home warranties, and home inspection.

���� c.��� The executive director
shall develop program guidelines to effectuate, administer, and accomplish the
purposes of the mortgage assistance program.� The guidelines shall, at a
minimum, set forth the requirements for application submissions, the criteria for
application selections, the eligible uses of mortgage assistance, eligibility
as a low- or moderate-income homeowner, and the curriculum and provision of the
homeowner counseling course.

���� d.��� (1)� Except as provided
pursuant to paragraph (2) of this subsection, a mortgage assistance loan shall
be recoverable as a lien on the real property that the loan is used to provide
mortgage assistance concerning, plus interest, reasonable attorney�s fees, and
court costs, and shall have the priority over all other liens on the real
property.

���� (2)� A mortgage assistance
loan shall be recoverable as a lien pursuant to paragraph (1) of this
subsection if:

���� (a)� The mortgage assistance
is not used for the eligible uses specified by the executive director pursuant
to subsection c. of this section;

���� (b)� the loan recipient is
found to have provided false information on their application, or failed to be
sufficiently forthcoming in the information required for eligibility, receipt
of the loan, or in communicating how the assistance was utilized; or

���� (c)� the three-year
requirement is not met as required pursuant to subsection a. of this section.

���� (3)� The mortgage assistance
shall not be recoverable if failure to reside in the home as the recipient
homeowner�s principal residence for three years following the use of the
subsidy is due to:

���� (a)� circumstances beyond the
homeowner�s control; or

���� (b)� the death or incapacity
of the homeowner.

���� e.��� The annual
appropriations acts following State fiscal year 2026 shall appropriate not less
than $200,000,000 from the General Fund to the agency, during each State fiscal
year in which the mortgage assistance program remains in operation, to
effectuate the purposes of the mortgage assistance program, and defray the
costs associated with administering the mortgage assistance program, except
that the agency shall retain not more than one percent of the annual
appropriation for administrative costs.� Of the total amount of mortgage
assistance funding awarded each State fiscal year through the mortgage
assistance program, no less than 25 percent shall be awarded to low-income
homeowners, and no less than 25 percent shall be awarded to low- or
moderate-income homeowners who are in imminent risk of homelessness, unless the
agency determines that 25 percent of the mortgage assistance funding cannot be
awarded to low-income homeowners, or that 25 percent of the funding cannot be
awarded to low- or moderate-income homeowners who are in imminent risk of
homelessness, because too few qualifying homeowners have applied for the
relevant category of mortgage assistance under the program, in which case, the
balance of remaining funding, subject to the relevant limitation, shall be
awarded to homeowners who otherwise qualify for assistance under the program.

���� f.���� No later than the 365th
day next following the effective date of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill) and at least once every year thereafter,
the agency shall prepare and submit a report to the Governor and, pursuant to
section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature.� The report
shall analyze the efficacy of the mortgage assistance program.� The report
shall: provide an overview of the total amount of deep and shallow subsidies
provided by the agency, with information by census tract on the race,
ethnicity, and income of the recipients of mortgage assistance; and contain any
other information determined by the agency to be relevant to the costs and
benefits of the mortgage assistance program.

���� 3.��� The Executive Director
of the
New Jersey Housing and Mortgage Finance
Agency shall, in accordance with the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary
to effectuate the provisions of
P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill)
.

���� 4.���
There is appropriated to the New Jersey Housing and Mortgage Finance
Agency from the General Fund, a sum of $200,000,000 to effectuate the
provisions of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill).�

���� 5.��� This act shall take
effect on the first day of the third month next following enactment, except the
executive director shall take anticipatory action necessary to effectuate the
provisions of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill)
.

STATEMENT

���� This bill establishes a
mortgage assistance program in the New Jersey Housing and Mortgage Finance
Agency (agency) to provide mortgage assistance for low- or moderate-income
homeowners who are in imminent risk of homelessness, as defined in the bill;
have experienced a qualifying economic hardship; have failed to make one or
more monthly payments on their mortgage; or are at risk of failing to make one
or more monthly payments on their mortgage.

���� Specifically, the mortgage
assistance program is to provide to low- or moderate-income homeowners a
zero-interest, forgivable loan award in the form of deep, moderate, shallow, or
single subsidies to be used for mortgage assistance for the homeowner�s principal
residence.� The bill defines the term
"qualifying
economic hardship" to mean:

�

the involuntary termination of
employment or loss of a primary or secondary source of income;

�

the death of a family member;

�

a divorce or separation;

�

an illness, incapacity, disability,
or economic event that causes a substantial reduction in household income; or

�

any other economic hardship that
the agency determines to be necessary to effectuate the purposes of the bill.

The
bill also defines
a
"single
subsidy" as
mortgage assistance necessary to completely cover one
month in advance monthly mortgage payments; a
"shallow
subsidy" as
mortgage assistance necessary to completely cover two
months in advance monthly mortgage payments; a
"moderate subsidy" as
mortgage assistance necessary to
completely cover all mortgage payments in arrears, including fees and other
penalties for delinquent mortgage payments, court costs, attorney�s fees, all
other related fees and expenses incurred as a result of the delinquency, and
two months in advance monthly mortgage payments; and a
"deep subsidy" as
mortgage assistance necessary to
completely cover all mortgage payments in arrears, including fees and other
penalties for delinquent mortgage payments, court costs, attorney�s fees, all
other related fees and expenses incurred as a result of the delinquency, and
six months in advance monthly mortgage payments.

���� The bill requires the
recipient to reside in the home for which the mortgage assistance was provided
for a period of three years subsequent to the use of the subsidy payment, and
participate in a homeowner counseling course, as described in the bill, prior
to the receipt of assistance.� The mortgage assistance loan is to be
recoverable as a lien if certain criteria are not satisfied, except as provided
in the bill.

���� The bill specifies that annual
appropriations acts following the State fiscal year of the bill�s enactment are
to appropriate not less than $200 million from the General Fund to the agency,
during each State fiscal year in which the mortgage assistance program remains
in operation, to effectuate the purposes of the bill, and defray the costs
associated with administering the mortgage assistance program.� The bill
permits the agency to retain for administrative costs one percent of the annual
appropriation.�

���� The bill requires that 25
percent of funding awarded through the mortgage assistance program is to be
awarded to low-income homeowners, and no less than 25 percent is be awarded to
low- or moderate-income homeowners who are in imminent risk of homelessness.�
If the agency determines that the funding cannot be awarded, because too few
qualifying homeowners have applied for the relevant aid category, the bill
authorizes the agency to award more of the funding to otherwise qualifying
homeowners.

���� The bill requires the agency
to report on the impact of the mortgage assistance program every year, and
appropriates
to the agency, $200 million from
the General Fund to effectuate the provisions of the bill.

���� The
bill would take effect on the first day of the third month next following the
date of enactment, except that the Executive Director of the agency would be
required to take anticipatory action necessary to effectuate the provisions of
the bill.