Expands financing opportunities for low and moderate income housing.

S1803 TR

SENATE, No. 1803

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator TROY SINGLETON

District 7 (Burlington)

Senator ANGELA V. MCKNIGHT

District 31 (Hudson)

SYNOPSIS

���� Expands financing opportunities for low and moderate
income housing.

CURRENT VERSION OF TEXT

���� As reported by the Senate Community and Urban Affairs
Committee with Technical Review.

��

An Act

concerning financing for affordable housing and
amending and supplementing chapter 14K of Title 55 of the Revised Statutes.

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

���� 1.��� Section 3 of P.L.1983,
c.530 (C.55:14K-3) is amended to read as follows:

���� 3.��� As used in this act:

���� a.���� "Agency"
means the New Jersey Housing and Mortgage Finance Agency as consolidated by
section 4 of P.L.1983, c.530 (C.55:14K-4), or, if that agency shall be
abolished by law, the person, board, body or commission succeeding to the
powers and duties thereof or to whom its powers and duties shall be given by
law.

���� b.��� "Boarding
house" means any building, together with any related structure, accessory
building, any land appurtenant thereto, and any part thereof, which contains
two or more units of dwelling space arranged or intended for single room
occupancy, exclusive of any such unit occupied by an owner or operator,
including:

���� (1)�� any residential hotel or
congregate living arrangement, but excluding any hotel, motel or established
guesthouse wherein a minimum of
[
85%
]

85 percent

of the units of dwelling space are offered for limited tenure only; (2) a
residential health care facility as defined in section 1 of P.L.1953, c.212
(C.30:11A-1) or licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.); (3)
any resource family home as defined in section 1 of P.L.1962, c.137
(C.30:4C-26.1); (4) any community residence for the developmentally disabled as
defined in section 2 of P.L.1977, c.448 (C.30:11B-2); (5) any dormitory owned
or operated on behalf of any nonprofit institution of primary, secondary or
higher education for the use of its students; (6) any building arranged for
single room occupancy wherein the units of dwelling space are occupied
exclusively by students enrolled in a full-time course of study at an
institution of higher education approved by the Department of Higher Education;
and (7) any facility or living arrangement operated by, or under contract with,
any State department or agency.

���� c.���� "Bonds" mean
any bonds, notes, bond anticipation notes, debentures or other evidences of
financial indebtedness issued by the agency pursuant to this act.

���� d.��� "Continuing-care
retirement community" means any work or undertaking, whether new
construction, improvement or rehabilitation, which may be financed in part or
in whole by the agency and which is designed to complement fully independent
residential units with social and health care services (usually including
nursing and medical services) for retirement families and which is intended to
provide continuing care for the term of a contract in return for an entrance
fee or periodic payments, or both, and which may include such appurtenances and
facilities as the agency deems to be necessary, convenient or desirable.

���� e.���� "Eligible
loan" means a loan, secured or unsecured, made for the purpose of
financing the operation, maintenance, construction, acquisition, rehabilitation
or improvement of property, or the acquisition of a direct or indirect interest
in property, located in the State, which is or shall be: (1) primarily
residential in character or (2) used or to be used to provide services to the
residents of an area or project which is primarily residential in
character. The agency shall adopt regulations defining the term
"primarily residential in character," which may include
single-family, multi-family and congregate or other single room occupancy
housing, continuing-care retirement communities,
assisted living
communities,
mobile homes and nonhousing properties and facilities which
enhance the livability of the residential property or area; and specifying the
types of residential services and facilities for which eligible loans may be
made, which may include, but shall not be limited to, parking facilities,
streets, sewers, utilities, and administrative, community, educational, welfare
and recreational facilities, food, laundry, health and other services and
commercial establishments and professional offices providing supplies and
services enhancing the area.� The term "loan" includes an obligation
the return on which may vary with any appreciation in value of the property or
interest in property financed with the proceeds of the loan, or a co-ventured
instrument by which an institutional lender or the agency assumes an equity
position in the property. Any undivided interest in an eligible loan
shall qualify as an eligible loan.

���� f.���� "Family"
means two or more persons who live or expect to live together as a single
household in the same dwelling unit; but any individual who (1) has attained
retirement age as defined in section 216a of the federal Social Security Act,
or (2) is under a disability as defined in section 223 of that act, or (3) such
other individuals as the agency by rule or regulation shall include, shall be
considered as a family for the purpose of this act; and the surviving member of
a family whose other members died during occupancy of a housing project shall
be considered as a family for the purposes of permitting continued occupancy of
the dwelling unit occupied by such family.

���� g.��� "Gross aggregate
family income" means the total annual income of all members of a family,
from whatever source derived, including but not limited to, pension, annuity,
retirement and social security benefits; except that there may be excluded from
income (1) such reasonable allowances for dependents, (2) such reasonable
allowances for medical expenses, (3) all or any proportionate part of the
earnings of gainfully employed minors, or (4) such income as is not received
regularly, as the agency by rule or regulation may determine.

���� h.��� "Housing
project" or "project" means any work or undertaking,
[
other than a
continuing-care community,
]
whether
new construction, improvement, rehabilitation, or acquisition of existing
buildings or units which is designed for the primary purpose of providing
multi-family rental housing or acquisition of sites for future multi-family
rental housing.

���� i.���� "Housing
sponsor" means any person, partnership, corporation or association,
whether organized as for profit or not for profit, to which the agency has made
or proposes to make a loan, either directly or through an institutional lender,
for a housing project.

���� j.���� "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 the State, or any insurance company or any mortgage
banking firm or mortgage banking corporation authorized to transact business in
the State.

���� k.��� "Life safety
improvement" means any addition, modification or repair to a boarding
house which is necessary to improve the life safety of the residents of the
boarding house, as certified by the Department of Community Affairs,
including, but not limited to, the correction of a violation of the" State
Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.),
the "Rooming and Boarding House Act of 1979," P.L.1979, c.496
(C.55:13B-1 et seq.), or the "Uniform Fire Safety
Act," P.L.1983, c.383 (C.52:27D-192 et seq.) and the administrative regulations
promulgated in accordance with these acts.

���� l.���� "Life safety
improvement loan" means an eligible loan the proceeds of which are to be
used to finance, in whole or in part, the construction, acquisition or
rendering of life safety improvements at or to boarding houses.

���� m.�� "Loan
originator" means any bank or trust company, savings bank, national
banking association, savings and loan association, or building and loan
association maintaining an office in the State, or any insurance company or any
mortgage banking firm or mortgage banking corporation authorized to transact
business in the State, or any agency or instrumentality of the United States or
the State or a political subdivision of the State, which is authorized to make
eligible loans.

���� n.��� "Municipality"
means any city of any class or any town, township, village or borough.

���� o.��� "Mutual
housing" means a housing project operated or to be operated upon
completion of construction, improvement or rehabilitation exclusively for the
benefit of the families who are entitled to occupancy by reason of ownership of
stock in the housing sponsor, or by reason of co-ownership of premises in a
horizontal property regime pursuant to P.L.1963, c.168; but the agency may
adopt rules and regulations permitting a reasonable percentage of space in such
project to be rented for residential or for commercial use.

���� p.��� "Persons and
families of low and moderate income" mean persons and families,
irrespective of race, creed, national origin or sex, determined by the agency
to require assistance on account of personal or family income being not
sufficient to afford adequate housing. In making such determination the
agency shall take into account the following:

���� (1)�� the amount of the total
income of such persons and families available for housing needs, (2) the size
of the family, (3) the cost and condition of housing facilities available and
(4) the eligibility of such persons and families to compete successfully in the
normal housing market and to pay the amounts at which private enterprise is
providing sanitary, decent and safe housing. �In the case of projects with
respect to which income limits have been established by any agency of the
federal government having jurisdiction thereover for the purpose of defining
eligibility of low and moderate income families, the agency may determine that
the limits so established shall govern. In all other cases income limits
for the purpose of defining low or moderate income persons shall be established
by the agency in its rules and regulations.

���� q.��� "Project cost"
means the sum total of all costs incurred in the acquisition, development,
construction, improvement or rehabilitation of a housing project, which are
approved by the agency as reasonable or necessary, which costs shall include, but
are not necessarily limited to, (1) cost of land acquisition and any buildings
thereon, (2) cost of site preparation, demolition and development, (3)
architect, engineer, legal, agency and other fees paid or payable in connection
with the planning, execution and financing of the project, (4) cost of
necessary studies, surveys, plans and permits, (5) insurance, interest,
financing, tax and assessment costs and other operating and carrying costs
during construction, (6) cost of construction, reconstruction, fixtures, and
equipment related to the real property, (7) cost of land improvements, (8)
necessary expenses in connection with initial occupancy of the project, (9) a
reasonable profit or fee to the builder and developer,
in accordance
with the industry standard applicable to similar federal programs,
(10)
an allowance established by the agency for working capital and contingency
reserves, and reserves for any operating deficits, (11) costs of guarantees,
insurance or other additional financial security for the project and (12) the
cost of such other items, including tenant relocation, as the agency shall
determine to be reasonable and necessary for the development of the project,
less any and all net rents and other net revenues received from the operation
of the real and personal property on the project site during construction,
improvement or rehabilitation.

���� All costs shall be subject to
approval and audit by the agency. The agency may adopt rules and regulations
specifying in detail the types and categories of cost which shall be allowable
if actually incurred in the development, acquisition, construction, improvement
or rehabilitation of a housing project.

���� r.���� "Retirement
family" means one or more persons related by blood, marriage
,
or
adoption who live or expect to live together as a single household in the same
dwelling unit
of a continuing-care retirement community
, provided that
at least one of the persons is an individual who (1) has attained retirement
age as defined in section 216a of the Federal Social Security Act, or (2) is
under a disability as defined in section 223 of that act, or (3) such
individuals as the agency by rule or regulation shall include; and provided
further, that the surviving member of a retirement family whose other members
died during occupancy of a continuing-care retirement community shall be
considered as a retirement family for purposes of permitting continued
occupancy of the dwelling unit occupied by such retirement family.�

����
s.���� "Non-amortizing
loan" means a loan or subordinate lien made by the agency or other funding
source, which shall not be considered a debt for purposes of refinancing or
repositioning of projects for preservation, and shall only be due from annual
cash availability documented by annual audit and may be extended to facilitate
the preservation of dwelling units.

(cf: P.L.2004, c.130, s.124)

���� 2.��� Section 5 of P.L.1983,
c.530 (C.55:14K-5) is amended to read as follows:

���� 5.��� In order to carry out
the purposes and provisions of this act, the agency, in addition to any powers
granted to it elsewhere in this act, shall have the following powers:

���� a.���� To adopt bylaws for the
regulation of its affairs and the conduct of its business; to adopt an official
seal and alter the same at pleasure; to maintain an office at such place or
places within the State as it may designate; to sue and be sued in its own
name;

���� b.��� To conduct examinations
and hearings and to hear testimony and take proof, under oath or affirmation,
at public or private hearings, on any matter material for its information and
necessary to carry out the provisions of this act;

���� c.���� To issue subpoenas
requiring the attendance of witnesses and the production of books and papers
pertinent to any hearing before the agency, or before one or more of the
members of the agency appointed by it to conduct a hearing;

���� d.��� To apply to any court,
having territorial jurisdiction of the offense, to have punished for contempt
any witness who refuses to obey a subpoena, or who refuses to be sworn or
affirmed to testify, or who is guilty of any contempt after summons to appear;

���� e.���� To acquire by purchase,
gift, foreclosure or condemnation any real or personal property, or any
interest therein, to enter into any lease of property and to hold, sell,
assign, lease, encumber, mortgage or otherwise dispose of any real or personal
property, or any interest therein, or mortgage lien interest owned by it or
under its control, custody or in its possession and release or relinquish any
right, title, claim, lien, interest, easement or demand however acquired,
including any equity or right of redemption, in property foreclosed by it and
to do any of the foregoing by public or private sale, with or without public
bidding, notwithstanding the provisions of any other law;

���� f.���� To acquire, hold, use
and dispose of its income revenues, funds and moneys;

���� g.��� To adopt rules and
regulations expressly authorized by this act and such additional rules and
regulations as shall be necessary or desirable to carry out the purposes of
this act. �The agency shall adopt regulations which provide for consultation
with housing sponsors regarding the formulation of agency rules and regulations
governing the operation of housing projects and which require the agency to
consult with the affected housing sponsor prior to taking any and all specific
proposed agency actions relating to the sponsor's housing project.�
The
proposed rules and regulations, and any subsequent proposed amendments, shall
be posted on the agency�s Internet

website at least 45 days prior to the
agency adopting the rules and regulations.� All rules and regulations shall
provide for public comment in writing and in person prior to their adoption.
�
The agency shall publish all rules and regulations
that have been adopted

and file them with the Secretary of State;

���� h.��� To borrow money or
secure credit on a temporary, short-term, interim or long-term basis, and to
issue negotiable bonds and to secure the payment thereof and to provide for the
rights of the holders thereof;

���� i.���� To make and enter into
and enforce all contracts and agreements necessary, convenient or desirable to
the performance of its duties and the execution of its powers under this act,
including contracts or agreements with qualified financial institutions for the
servicing and processing of eligible loans owned by the agency;

���� j.���� To appoint and employ
an executive director, who shall be the chief executive officer of the agency,
and additional officers, who need not be members of the agency as the agency
deems advisable, and to employ architects, engineers, attorneys, accountants,
construction and financial experts and other employees and agents as may be
necessary in its judgment and to determine their qualifications, terms of
office, duties and compensation; and to promote and discharge such officers,
employees and agents, all without regard to the provisions of Title 11 of the
Revised Statutes, Civil Service;

���� k.��� To contract for and to
receive and accept any gifts, grants, loans or contributions from any source,
of money, property, labor or other things of value, to be held, used and
applied to carry out the purposes of this act subject to the conditions upon
which the grants and contributions may be made, including, but not limited to,
gifts or grants from any department or agency of the United States or the State
for payment of rent supplements to eligible families or for the payment in
whole or in part of the interest expense for a housing project or for any other
purpose consistent with this act;

���� l.���� To enter into
agreements to pay annual sums in lieu of taxes to any political subdivision of
the State with respect to any real property owned
[
or
]
,
operated directly by the
agency
, or financed by the agency
;

���� m.�� To procure insurance
against any loss in connection with its operations, property and other assets
(including eligible loans) in the amounts and from the insurers it deems
desirable;

���� n.��� To the extent permitted
under its contract with the holders of bonds of the agency, to consent to any
modification with respect to rate of interest, time and payment of any
installment of principal or interest, security or any other terms of any loan
to an institutional lender, eligible loan, loan commitment, contract or
agreement of any kind to which the agency is a party;

���� o.��� To the extent permitted
under its contract with the holders of bonds of the agency, to enter into
contracts with any housing sponsor containing provisions enabling the housing
sponsor to reduce the rental or carrying charges to persons unable to pay the regular
schedule of charges where, by reason of other income or payment from the agency,
any department or agency of the United States or the State, these reductions
can be made without jeopardizing the economic stability of the housing project;

���� p.��� To make and collect the
fees and charges it determines are reasonable;

���� q.��� To the extent permitted
under its contract with the holders of bonds of the agency, to invest and
reinvest any moneys of the agency not required for immediate use, including
proceeds from the sale of any obligations of the agency, in obligations,
securities or other investments as the agency deems prudent. All
functions, powers and duties relating to the investment or reinvestment of
these funds, including the purchase, sale or exchange of any investments or
securities may, upon the request of the agency, be exercised and performed by
the Director of the Division of Investment in the Department of the Treasury,
in accordance with written directions of the agency signed by an authorized
officer, without regard to any other law relating to investments by the
Director of the Division of Investment;

���� r.���� To provide, contract or
arrange for, where, by reason of the financing arrangement, review of the
application and proposed construction of a project is required by or in behalf
of any department or agency of the United States, consolidated processing of the
application or supervision or, in the alternative, to delegate the processing
in whole or in part to any such department or agency;

���� s.���� To make eligible loans,
and to participate with any department, agency or authority of the United
States or of any state thereof, this State, a municipality, or any banking
institution, foundation, labor union, insurance company, trustee or fiduciary
in an eligible loan, secured by a single participating mortgage, by separate
mortgages or by other security agreements, the interest of each having equal
priority as to lien in proportion to the amount of the loan so secured, but
which need not be equal as to interest rate, time or rate of amortization or
otherwise, and to undertake commitments to make such loans;

���� t.���� To assess from time to
time the housing needs of any municipality which is experiencing housing
shortages as a result of the authorization of casino gaming and to address
those needs when planning its programs
, as well as considering municipal
obligations set by a court or other instrumentality of the State engaged in
efforts to increase access to affordable housing within that municipality
;

���� u.��� To sell any eligible
loan made by the agency or any loan to an institutional lender owned by the
agency, at public or private sale, with or without bidding, either singly or in
groups, or in shares of loans or shares of groups of loans, issue securities,
certificates or other evidence of ownership secured by such loans or groups of
loans, sell the same to investors, arrange for the marketing of the same; and
to deposit and invest the funds derived from such sales in any manner
authorized by this act;

���� v.��� To make commitments to
purchase, and to purchase, service and sell, eligible loans, pools of loans or
securities based on loans, insured or issued by any department or agency of the
United States, and to make loans directly upon the security of any such loan,
pools of loans or securities;

���� w.�� To provide such advisory
consultation, training and educational services as will assist in the planning,
construction, rehabilitation and operation of housing including but not limited
to assistance in community development and organization, home management and
advisory services for residents and to encourage community organizations
and local governments to assist in developing housing;

���� x.��� To encourage research in
and demonstration projects to develop new and better techniques and methods for
increasing the supply, types and financing of housing and housing projects in
the State and to engage in these research and demonstration projects and to
receive and accept contributions, grants or aid, from any source, public or
private, including but not limited to the United States and the State, for
carrying out this purpose;

���� y.��� To provide to housing
sponsors, through eligible loans or otherwise, financing, refinancing or
financial assistance for fully completed, as well as partially completed,
projects which may or may not be occupied, if the projects meet all the
requirements of this act, except that, prior to the making of the
mortgage loans by the agency, said projects need not have complied with
sections 7a.(9) and 42 of this act;

���� z.���� To encourage and
stimulate
[
cooperatives
and other forms of housing with tenant
]

participation
through financial incentives for the development of affordable
housing projects with New Jersey certified minority and women-owned businesses,
veteran-owned businesses, and certified New Jersey nonprofit organizations,
including, but not limited to, set aside provisions within the federal low
income housing tax credit program qualified allocation plan, and priority under
grants and loans
;

���� aa.�� To promote innovative
programs for home ownership, including but not limited to lease-purchase
programs, employer-sponsored housing programs, and tenant cooperatives;

���� bb.� To set aside and
designate, out of the funds that are or may become available to it for the
purpose of financing housing in this State pursuant to the terms of this act,
certain sums or proportions thereof to be used for the financing of housing and
home-ownership opportunities, including specifically lease-purchase
arrangements, provided by employers to their employees through nonprofit or
for
profit,
limited-dividend corporations or associations created by employers
for that purpose; and to establish priority in funding, offer bonus fund
allocations, and institute other incentives to encourage such
employer-sponsored housing and home-ownership opportunities;

���� cc.�� Subject to any agreement
with bondholders, to collect, enforce the collection of, and foreclose on any
property or collateral securing its eligible loan or loans to institutional
lenders and acquire or take possession of such property or collateral and sell
the same at public or private sale, with or without bidding, and otherwise deal
with such collateral as may be necessary to protect the interests of the agency
therein;

���� dd.� To administer and to
enter into agreements to administer programs of the federal government or any
other entity which are in furtherance of the purposes of this act;

���� ee.�� To do and perform any
acts and things authorized by this act under, through, or by means of its
officers, agents or employees or by contract with any person, firm or corporation;
and

���� ff.�� To do any acts and
things necessary or convenient to carry out the powers expressly granted in
this act
so long as no duplication of authority or actions impact the
efficiency of the programs to produce, manage, or maintain the financial
viability of projects
.

����
gg.� To promote the
preservation of existing affordable housing by providing an extension of
existing debt, loans, and liens while providing additional financing to insure
financial viability as long as any deed restriction is extended for a minimum
of 10 years.� All existing loans, and any non-amortizing debt or liens may be
extended under any sale or refinancing in order to facilitate the preservation
of dwelling units.� Developers who participate in the preservation of dwelling
units shall be eligible for incentives including developers� fees and grants.

(cf: P.L.1983, c.530, s.5)

���� 3.��� (New section) The agency
shall accept third party verification of compliance, eliminate duplicative
reviews, and streamline the approval of individuals seeking affordable housing.
The agency shall not establish any program, rule, or regulation which
unnecessarily obstructs or discourages participation by a �minority business�
or a �women�s business,� as defined pursuant to Section 2 of P.L.1986, c.195
(C.52:27H-21.18) or a "veteran-owned business" as defined pursuant to
section 2 of P.L.2011, c.147 (C.52:32-50). �To the extent permitted by law, the
agency shall encourage participation by a �minority business� or a �women�s
business,� as defined pursuant to Section 2 of P.L.1986, c.195 (C.52:27H-21.18)
or a "veteran-owned business" as defined pursuant to section 2 of
P.L.2011, c.147 (C.52:32-50) in all programs.

���� 4.��� Section 4 of P.L.1990,
c.90 (C.55:14K-5.1) is amended to read as follows:

���� 4.��� a.� The executive
director of the New Jersey Housing and Mortgage Finance Agency shall provide
written notice to a county or municipality, as appropriate, when any funding is
provided to a local or regional housing authority, or to a redevelopment corporation,
agency or authority,
or private developer
for the purpose of financing a
housing development project within the county or municipality.� Such
notification shall be made within five calendar days of the decision to provide
the funding.�

���� b.��� In the case of a county
organized under the "Optional County Charter Law," P.L.1972, c.154
(C.40:41A-1 et seq.), written notice shall be provided to the county executive
or other appropriate executive officer, and to the board of chosen freeholders.�
In all other counties, written notice shall be provided to the members of the
board of chosen freeholders.�

���� In the case of a municipality
other than a municipality organized under the council-manager plan pursuant to
the "Optional Municipal Charter Law," P.L.1950, c.210 (C.40:69A-1 et
seq.), written notice shall be provided to the mayor and to the members of the
council.� In the case of a municipality organized under the council-manager
plan pursuant to the "Optional Municipal Charter Law," P.L.1950,
c.210 (C.40:69A-1 et seq.), written notice shall be provided to the manager and
to the members of the council.�

(cf: P.L.1990, c.90, s.4)

���� 5.��� Section 1 of P.L.1992,
c.186 (C.55:14K-5.2) is amended to read as follows:

���� 1.��� In addition to the
powers otherwise granted in P.L.1983, c.530 (C.55:14K-1 et seq.), the New
Jersey Housing and Mortgage Finance Agency shall set aside and designate, out
of the funds that are or may become available to it for the purpose of
assisting the production of affordable housing in the State, certain amounts to
be used for assisting in the development of homeownership opportunities for
residents of public housing who seek to acquire ownership of their residential
units as part of a resident management corporation, a cooperative corporation
or a condominium association formed by the residents of that public housing
project through the program established pursuant to Subtitle B of Title IV of
Pub.L.101-625 (42 U.S.C. s.12871 et seq.) or any other program administered by
the federal government for extending homeownership opportunities to residents
of public housing
or programs intended to privatize public housing,
including the federal Department of Housing and Urban Development�s Rental
Assistance Demonstration program
.� Nothing in this act shall, in any way,
relieve a housing authority of the need to submit a plan for replacement
housing, as required under 24 CFR 970.11.�

(cf: P.L.1992, c.186, s.1)

���� 6.��� Section 6 of P.L.1983,
c.530 (C.55:14K-6) is amended to read as follows:

���� 6.��� a.� The agency, in order
to encourage the development, operation, maintenance, construction, improvement
and rehabilitation
and preservation
of safe and adequate housing in the
State, is hereby authorized and empowered to finance, by the making of eligible
loans or otherwise, the construction, improvement or rehabilitation of housing
projects in the State.

���� b.��� The agency, in order to
carry out the purposes of subsection a. of this section, may:

���� (1)�� accept applications for
loans;

���� (2)�� enter into agreements
with housing sponsors for permanent loans and temporary loans or advances in
anticipation of permanent loans for the development, operation, maintenance,
construction, improvement or rehabilitation of housing projects; and

���� (3)�� make permanent loans and
temporary loans or advances in anticipation of permanent loans to housing
sponsors under the provisions of this act.

���� c.����
[
No application
for a loan for the construction, improvement or rehabilitation of a housing
project containing rental units to be rented at below market rates to be
located in any municipality shall be processed unless there is already filed
with the secretary of the agency either:

���� (1) a certified copy of a
resolution adopted by the municipality reciting that there is a need for such
housing project in the municipality; or

���� (2) a written statement from
the municipal clerk if the municipality has enacted an ordinance pursuant to
section 1 of P.L.2024, c.5 (C.52:27D-304.1a), stating that there is a need for
such housing project in the municipality.
]

(Deleted by amendment, P.L.��� , c.��� ) (pending before the Legislature as
this bill)

���� d.��� Every application for a
loan to a housing sponsor shall be made on forms furnished by the agency and
shall contain such information as the agency shall require.

���� e.���� In considering any
application for a loan for a housing project, the agency shall give first
priority to applications for loans for the
preservation,
construction,
improvement or rehabilitation of housing projects which will be a part of or
constructed in connection with an urban redevelopment program, and also shall
give consideration to:

���� (1)�� the comparative need of
the area to be served by the proposed project for housing;

���� (2)�� the ability of the
applicant to construct, operate, manage and maintain the proposed housing
project;

���� (3)�� the existence of zoning
or other regulations to protect adequately the proposed housing project against
detrimental future uses which could cause undue depreciation in the value of
the project;

���� (4)�� the availability of
adequate parks, recreational areas, utilities, schools, transportation and
parking;

���� (5)�� the availability of
adequate, accessible places of employment;
[
and
]

���� (6)�� where applicable, the
eligibility of the applicant to make payments to the municipality
[
in which the
housing project is located in lieu of local property taxes
]

under a
payment in lieu of taxation agreement; and

����
(7)�� Whether the applicant
is a qualified New Jersey nonprofit or New Jersey minority or women-owned
development firm having a valid certification as a "minority
business" or a "women�s business" pursuant to P.L.1986, c.195
(C.52:27H-21.17 et seq.) or a "veteran-owned business" as defined
pursuant to section 2 of P.L.2011, c.147 (C.52:32-50)
.

(cf: P.L.2024, c.5, s.3)

���� 7.��� Section 7 of P.L.1983,
c.530 (C.55:14K-7) is amended to read as follows:

���� 7.��� a.� Loans made by the
agency to finance housing projects shall be subject to the following terms and
conditions:

���� (1)�� The loan shall be for a
period of time not in excess of 50 years as determined by the agency;

���� (2)�� The amount of the loan
shall not exceed
[
90%
]

90 percent

of the total project cost as determined by the agency, except that as to
projects to be owned, constructed, improved, rehabilitated, operated, managed
and maintained as mutual housing or by any corporation or association organized
not for profit
, or 95 percent in the case of minority-, women-, or veteran-owned
businesses,

which has as one of its purposes the construction, improvement
or rehabilitation of housing projects, the amount of the loan shall not exceed
[
100%
]

100
percent
of the total project cost as determined by the agency; but the
agency may make additional loans to a housing sponsor to which a loan by the
agency for the cost of a project is outstanding if and to the extent that the
agency finds that such additional loan is required to more adequately secure
and protect the project or to avoid a default by the sponsor on the original
loan for the cost of the project and is in the best interest of the agency and
the holders of its bonds issued to finance the original loan for the cost of
the project;

���� (3)�� The interest rate on the
loan shall be established by the agency at the lowest level consistent with the
agency's
capital
cost
[
of
operation
]

and its responsibilities to the holders of its bonds;

���� (4)�� The loan shall be
evidenced by a mortgage note or bond and by a mortgage which shall be a first
recorded

lien on the project and which shall contain such terms and provisions and be in
a form approved by the agency.� The agency shall require the qualified housing
sponsor receiving a loan or its contractor to post security
, either by
performance bond or other acceptable means, including letters of credit,
in
amounts related to the project cost as established by regulation and to execute
such other assurances and guarantees as the agency may deem necessary and may
require its principals or stockholders to also execute such other assurances
and guarantees as the agency may deem necessary;

���� (5)�� The loan shall be
subject to an agreement between the agency and the housing sponsor which will
subject the housing sponsor and its principals or stockholders to limitations
established by the agency as to rentals and other charges, builders' and
developers' profits and fees, and the disposition of its property and
franchises to the extent more restrictive limitations are not provided by the
law under which the borrower is incorporated or organized;

���� (6)�� The loan shall be
subject to an agreement between the agency and the housing sponsor limiting the
housing sponsor and its principals or stockholders to such rate of return on
its investment in the housing project to be assisted with a loan from the agency
as shall be fixed from time to time by the agency in its regulations which
shall take into account the prevailing rates of return available for similar
investments and the risks associated with the development of the project,
together with factors designed to promote the objectives of providing
affordable housing, encouraging investment in urban development areas,
maintaining and improving the existing housing stock, and other objectives of
this act; but agreements entered into by the predecessors of the agency prior
to the effective date of this act shall continue to be subject to any
restrictions on rate of return imposed by prior law unless those restrictions
are expressly modified pursuant to regulations of the agency.� No housing
sponsor which is permitted by the provisions of the law under which it is
organized or incorporated to earn a return on its investment, nor any of the
principals or stockholders of that housing sponsor, shall earn, accept or
receive a return on investment greater than the rate of return fixed by the
agency in any housing project assisted with a loan from the agency, whether
upon the completion of the construction, improvement or rehabilitation of the
project, or upon the operation thereof, or upon the sale, assignment or lease of
the project to any other person, association or corporation.� Any person,
association or corporation who violates the provisions of this subsection is
guilty of a crime of the fourth degree;

���� (7)�� No loan shall be
executed except a loan made to a corporation or association organized not for
profit which has as one of its purposes the development, construction,
improvement or rehabilitation of housing projects or for mutual housing unless
the housing sponsor agrees (a) to certify upon completion of project
construction, improvement or rehabilitation, subject to audit by the agency,
either that the actual project cost as defined herein exceeded the amount of
the loan proceeds by
[
10%
]

10 percent

or more, or the amount by which the loan proceeds exceed
[
90%
]

90 percent

of the total project cost, and (b) to pay forthwith to the agency, for
application to reduction of the principal of the loan, the amount, if any, of
such excess loan proceeds, subject to audit and determination by the agency.�
No loan shall be made to a corporation or association organized not for profit
or for mutual housing unless the corporation or association organized not for
profit or for mutual housing agrees to certify the actual project cost upon
completion of the project, subject to audit and determination by the agency,
and further agrees to pay forthwith to the agency, for application to reduction
of the principal of the loan, the amount, if any, by which the proceeds of the
loan exceed the certified project cost subject to audit and determination by
the agency. Notwithstanding the provisions of this paragraph, the agency may
accept, in lieu of any certification of project cost as provided herein, such other
assurances of the project cost in any form or manner whatsoever, as will enable
the agency to determine with reasonable accuracy the amount of the project
cost;

���� (8)�� No loan shall be made
for the construction, improvement or rehabilitation of a housing project for
which tax exemption is granted by a municipality unless the tax exemption
remains in effect during the entire term of the loan, unless a lesser period of
tax exemption is approved by the agency;
[
and
]

���� (9)�� The loan shall be
subject to an agreement between the agency and the qualified housing sponsor
which contains a provision stating the prevailing wage rate, as determined by
either the Commissioner of Labor and Industry or the Secretary of the United
States Department of Labor in accordance with the provisions of section 42 of
this act, which can be paid to the workmen employed in the performance of any
contract for the construction or rehabilitation of any housing project, and
which stipulates that the qualified housing sponsor, or any builder, contractor
or subcontractor thereof, shall pay to such workmen not less than the
applicable prevailing wage rate pursuant to that section
; and

����
(10)� The agency shall
encourage the participation of conventional lenders in the provision of
construction and permanent loans in order to support the goals of the federal "Community
Reinvestment Act of 1977," 12 U.S.C. s.2901 et seq.� The agency shall not
adopt rules or regulations that create an unfair advantage for the use of agency
financing over conventional loans, specifically in competitive programs like
the federal low income housing tax credit program or restrict grant funds to
projects only utilizing agency financing, especially when lower cost options
for financing are available from conventional resources
.

���� b.��� As a condition of any
loan to finance a housing project, the agency shall have the power at all times
during the construction, improvement or rehabilitation of a housing project and
the operation thereof:

���� (1)�� To enter upon and
inspect without prior notice any project, including all parts thereof, for the
purpose of investigating the physical and financial condition thereof, and its
construction, improvement, rehabilitation, operation, management and maintenance,
and to examine all books and records with respect to capitalization, income and
other matters relating thereto and to make such charges as may be required to
cover the cost of such inspections and examinations;

���� (2)�� To order such
alterations, changes or repairs as may be necessary to protect the security of
its investment in a housing project or the health, safety, and welfare of the
occupants thereof;

���� (3)�� To order any managing
agent, project manager or owner of a housing project to do such acts as may be
necessary to comply with the provisions of all applicable laws or ordinances or
any rule or regulation of the agency or the terms of any agreement concerning
the project or to refrain from doing any acts in violation thereof and in this
regard the agency shall be a proper party to file a complaint and to prosecute
thereon for any violations of law or ordinances as set forth herein;

���� (4)�� To require the adoption
and continuous use of uniform systems of accounts and records for a project and
to require all owners or managers of a project to file annual reports
containing that information and verified in such manner as the agency shall
require, and to file at the times and on the forms as it may prescribe, reports
and answers to specific inquiries required by the agency to determine the
extent of compliance with any agreement, the terms of the loan, the provisions
of this act and any other applicable law;

���� (5)�� To enforce, by court
action if necessary, the terms and provisions of any agreement between the
agency and the housing sponsor and the terms of any agreement between the
housing sponsor and any municipality granting tax exemption, as to schedules of
rental or carrying charges, income limits as applied to tenants or occupants,
or any other limitation imposed upon the housing sponsor as to financial
structure, construction or operation of the project;

���� (6) (a) Subject to the
provisions of paragraph (7) of subsection b. of this section, in the event of a
violation by the housing sponsor of the terms of any agreement between the
agency and the housing sponsor, or between the municipality granting tax exemption
and the housing sponsor, or in the event of a violation by the housing sponsor
of this act or of the terms of the loan agreement or of any rules and
regulations of the agency duly promulgated pursuant to this act, or in the
event that the agency shall determine that any loan or advance from the Housing
Development Fund pursuant to section 30 of this act is in jeopardy of not being
repaid, the agency may, without resort to any judicial process, assume all of
the powers and duties of the housing sponsor in the management and operation of
the project, including but not limited to the power to receive all revenues and
pay all expenses of the project and the power to control all property,
including bank accounts and cash, owned by the housing sponsor.� The agency may
appoint such person or persons whom the agency in its sole discretion deems
advisable, including officers or employees of the agency, to perform the
functions of the officers or other controlling persons of the housing sponsor.�
Persons so appointed need not be stockholders or meet other qualifications
which may be prescribed by the certificate of incorporation, bylaws or
partnership agreement of the housing sponsor.� In the absence of fraud or bad
faith, persons so appointed shall not be personally liable for debts,
obligations or liabilities of the housing sponsor.� Persons so appointed shall
serve only for a period coexistent with the duration of the violation or until
the agency is assured in a manner satisfactory to it that the violation, or
violations of a similar nature, will not recur.� Persons so appointed shall
serve in such capacity without compensation, but shall be entitled to be
reimbursed, if and as the certificate of incorporation, bylaws or partnership
agreement of the housing sponsor may provide, for all necessary expenses
incurred in the discharge of their duties as determined by the agency; and

���� (b)�� the provisions of
section 18 of P.L. 1991, c. 431 (C.40A:20-18) concerning housing projects in
financial difficulty shall not apply to housing projects financed by the
agency; and

���� (7)�� The provisions of this
subsection and this act pertaining to the regulation of housing sponsors shall
be for purposes of protecting the collateral for any loan or loans;
implementing or enforcing any condition, requirement or criterion for loans as
provided in this act or other applicable law; and securing the rights and
remedies of lenders and bond holders to the extent of the undertakings of the
agency.� Subject to the foregoing, the agency shall permit, provide for and
encourage the right of local housing sponsors to exercise their own initiative
and competence in the administration of their assets and the conduct and
operation of housing projects and exercise their rights and responsibilities to
the fullest extent permitted by law.� Therefore, the agency shall exercise its
remedies and powers under paragraph (6) of this subsection only with regard to
material violations and only after reasonable notice and reasonable opportunity
to correct the violation is provided to the housing sponsor in accordance with
regulations adopted by the agency.

���� c.���� Notwithstanding any
law, rule or regulation to the contrary, the provisions of paragraphs (5) and
(6) of subsection a. of this section shall not be applicable to market rate
units.

���� d.��� As used in this section,
"market rate unit" means a housing unit for which occupancy is not
subject to limitations based on tenant income.

(cf: P.L.2021, c.34, s.10)

���� 8.��� Section 8 of P.L.1983,
c.350 (C.55:14K-8) is amended to read as follows:

���� 8.��� a.�
[
Admission to
housing projects constructed, improved or rehabilitated under this act shall be
limited to families whose gross aggregate family income at the time of
admission does not exceed six times the annual rental or carrying charges,
including the value or cost to them of heat, light, water, sewerage, parking
facilities and cooking fuel, of the dwellings that may be furnished to such
families, or seven times those charges if there are three or more dependents.�
There may be included in the carrying charges to any family for residence in
any mutual housing project constructed, improved or rehabilitated with a loan
from the agency an amount equal to 6% of the original cash investment of the
family in the mutual housing project and, to the extent authorized by the
agency where not included in the carrying charges, the value or cost of
repainting the apartment and replacing any fixtures or appliances.
Notwithstanding the provisions of this section, no family or individual shall
be eligible for admission to any housing project constructed, improved or
rehabilitated with a loan from the agency, whose gross aggregate family income
exceeds such amount as shall be established from time to time by the agency, by
rules or regulations promulgated hereunder; except that with respect to any
project financed by an agency loan insured or guaranteed by the United States
of America or any agency or instrumentality thereof, the agency may adopt the
admission standards for such projects then currently utilized or required by the
guarantor or insurer.

���� The provisions of this
subsection shall not apply to any housing project that the agency determines is
necessary to promote the long term development and viability of a neighborhood
and spur its revitalization or is situated in a qualified municipality that is
constructed, improved or rehabilitated on or after the date upon which the
commissioner determines that the municipality fulfills the definition of a
qualified municipality pursuant to section 4 of P.L.2002, c.43 (C.52:27BBB-4).
]

(Deleted
by amendment, P.L. , c.�� ) (pending before
the Legislature as this bill)

���� b.��� The agency shall by
rules and regulations provide for the periodic examination of the income of any
person or family residing in any housing project constructed, improved or
rehabilitated with a loan from the agency. If the gross aggregate family income
of a family residing in a housing project increases and the ratio to the
current rental or carrying charges of the dwelling unit becomes greater than
the ratio prescribed for admission
[
in
subsection a. of this section
]

but is not more than
[
25%
]

25 percent

above the family income so prescribed for admission to the project, the owner
or managing agent of the housing project shall permit the family to continue to
occupy the unit.� The agency or (with the approval of the agency) the housing
sponsor of any housing project constructed, improved or rehabilitated with a
loan from the agency, may terminate the tenancy or interest of any family
residing in the housing project whose gross aggregate family income exceeds by
[
25%
]

25 percent

or more the amount prescribed herein and which continues to do so for a period
of six months or more; but no tenancy or interest of any such family in any
such housing project shall be terminated except upon reasonable notice and
opportunity to obtain suitable alternate housing, in accordance with rules and
regulations of the agency; and any such family, with the approval of the
agency, may be permitted to continue to occupy the unit, subject to payment of
a rent or carrying charge surcharge to the housing sponsor in accordance with a
schedule of surcharges fixed by the agency.� The housing sponsor shall pay the
surcharge to the municipality granting tax exemption, but only up to an amount
that together with payments made to the municipality in lieu of taxes and for
any land taxes equals
[
25%
]

25 percent

of the total rents or carrying charges of the housing project for the current
and any prior years that the project has been in operation.

���� The provisions of this
subsection shall not apply to any housing project situated in a qualified
municipality that is constructed, improved or rehabilitated on or after the
date upon which the commissioner determines that the municipality fulfills the
definition of a qualified municipality pursuant to section 4 of P.L.2002, c.43
(C.52:27BBB-4).

���� c.���� For projects on which
the agency has made a loan and financed the loan with the proceeds of bonds
issued prior to January 1, 1973, any remainder of the surcharge, or the total
surcharge if tax exemption has not been granted, shall be paid into the housing
finance fund securing the bonds issued to finance the project for the use of
the agency; for projects financed on or after January 1, 1973, any remainder of
the surcharge, or the total surcharge if tax exemption has not been granted,
shall be paid to the agency.

���� d.��� Any family residing in a
mutual housing project required to remove from the project because of excessive
income as herein provided shall be discharged from liability on any note, bond
,

or other evidence of indebtedness relating thereto and shall be reimbursed, in
accordance with the rules of the agency, for all sums paid by the family to the
housing sponsor on account of the purchase of stock or debentures as a
condition of occupancy or on account of the acquisition of title for such
purpose.

���� The provisions of this
subsection shall not apply to any housing project situated in a qualified
municipality that is constructed, improved or rehabilitated on or after the
date upon which the commissioner determines that the municipality fulfills the
definition of a qualified municipality pursuant to section 4 of P.L.2002, c.43
(C.52:27BBB-4).

���� e.���� The agency shall
establish admission rules and regulations for any housing project financed in
whole or in part by loans authorized hereunder which shall provide priority
categories for persons displaced by urban renewal projects, highway programs or
other public works, persons living in substandard housing, persons and families
who, by reason of family income, family size or disabilities, have special
needs, elderly persons and families living under conditions violative of
minimum health and safety standards.

���� The provisions of this
subsection shall not apply to any housing project situated in a qualified
municipality that is constructed, improved or rehabilitated on or after the
date upon which the commissioner determines that the municipality fulfills the
definition of a qualified municipality pursuant to section 4 of P.L.2002, c.43
(C.52:27BBB-4).

���� f.���� Notwithstanding the
provisions of subsection e. of this section, the Commissioner of Community
Affairs, in consultation with the Adjutant General of Military and Veterans'
Affairs, shall promulgate admission rules and regulations for any housing
project, financed in whole or in part by loans authorized hereunder, to provide
a housing preference for veterans and surviving spouses, as those terms are
defined under subsection (h) of section 1 of P.L.1963, c.171 (C.54:4-8.10), who
qualify for public housing assistance, and for the spouses of veterans who
currently so qualify.

(cf: P.L.2016, c.19, s.1)

���� 9.��� Section 31 of P.L.1983,
c.530 (C.55:14K-31) is amended to read as follows:

���� 31.� a.� The agency shall
establish and maintain a fund called the "General Fund" which shall
consist of all moneys of the agency not required to be deposited in any other
fund of the agency, which the agency may deposit therein.� To the extent
available, after paying all the operating costs of the agency, the moneys
remaining in the General Fund may be used for the payment of the principal of
and interest on the bonds issued by the agency or for such other corporate
purposes of the agency as this act authorizes.

���� b.��� The agency may establish
such additional and further funds as may be necessary and desirable to
accomplish any agency purpose or to comply with the provisions of any agreement
made by the agency or any resolution approved by the agency. The resolution establishing
such a fund shall specify the source of moneys from which it shall be funded
and the purposes for which moneys held in the fund shall be disbursed.

����
c.���� In the event the
agency refinances or discharges any bonds which were used to finance an
existing project, and the refinancing or discharge reduces the effective rate
on the bond payments, the agency shall provide to projects participating in
that financing a proportionate share of savings, including the calculation of
administrative costs incurred by the agency in carrying out this section.� Commencing
on the first day of the eleventh calendar year next following the issuance of a
mortgage financed by the agency, project sponsors shall be permitted to repay
any mortgage at any time without penalty, and shall be released of any
remaining agency regulatory agreement upon repayment of the lien.

(cf: P.L.1983, c.530, s.31)

����
10.� Section
37 of P.L.1983, c.530 (C.55:14K-37) is amended to read as follows:

����
37.� a.�
It is the intent of the Legislature that in the event of any conflict or
inconsistency in the provisions of this act and any other acts concerning
housing sponsors or any rules and regulations adopted thereunder, to the extent
of such conflict or inconsistency, the provisions of this act shall be enforced
and the provisions of such other acts and rules and regulations adopted
thereunder shall be of no effect.

���� b.��� The governing body of
any municipality in which a housing project financed or to be financed by the
agency is or is to be located may by ordinance or resolution, as appropriate,
provide that such project shall be exempt from real property taxation, if the
housing sponsor enters into an agreement with the municipality for payments to
the municipality in lieu of taxes for municipal services.� Any such agreement
may require the housing sponsor to pay to the municipality an amount up to
[
20
]

10

percent of the annual
[
gross
]

net

revenue from each housing project situated on such real property for each year
of operation thereof following the substantial completion thereof. For the
purpose of this section, "annual
[
gross
]

net

revenue" means the total annual gross rental or carrying charge and other
income of a housing sponsor
[
from
]

minus
utility expenses of and federal subsidy for
a housing project.� If any such
agreement is entered into from the date of recording the mortgage on the
project to the date of substantial completion of the project, the annual amount
payable to the municipality as taxes or as payments in lieu of taxes in respect
of the project site shall not be in excess of the amount of taxes on the
project site for the year preceding the recording of the mortgage.� Any
agreement between any housing sponsor and a municipality pursuant to this
subsection shall be submitted to the agency for review in order to avoid
duplicating, overlapping or inconsistent regulations or provisions.� Any
exemption from taxation pursuant to the provisions of this section shall not
extend beyond the date on which the eligible loan made by the agency on the
project is paid in full.

���� c.���� Notwithstanding the
provisions of subsection b. of this section to the contrary, the governing body
of a municipality may agree to continue a tax exemption for a State or
federally subsidized housing project, beyond the date on which the eligible
loan made by the agency on the project is fully paid, so long as the project
remains subject to affordability controls pursuant to:

���� (1) project-based federal
rental assistance, authorized pursuant to section 8 of the United States
Housing Act of 1937 (42 U.S.C. s.1437f), or other federal or State
project-based assistance;

���� (2)�� the Uniform Housing
Affordability Controls promulgated by the New Jersey Housing and Mortgage
Finance Agency; or

���� (3)�� the rent and income
limits established by the federal Low Income Housing Tax Credit program
pursuant to section 42 of the Internal Revenue Code (26 U.S.C. s.42).

(cf: P.L.2019, c.297, s.2)

���� 11.� This act shall take
effect immediately.