N.J. Admin. Code § 5:43-3.6

Current through Register Vol. 56, No. 21, November 4, 2024

Section 5:43-3.6 - Municipal land acquisition (MLA) projects

(a) The Balanced Housing Program may provide assistance to eligible municipalities, as defined in 5:43-1.3 and (b) below, to acquire land and/or any other eligible activity, for the purpose of providing future affordable housing.

(b) Eligible municipalities must meet the requirements listed in 1 through 3 below:

1. The municipality must have adopted a development fee ordinance approved either by the Superior Court or by the New Jersey Council on Affordable Housing (COAH) in accordance with N.J.A.C. 5:94-6;

2. The proposed project is contained within:

i. A COAH approved Fair Share Plan or court-approved compliance agreement; or

ii. Will meet all or part of the municipal low and moderate income housing obligation if COAH has invoked its authority pursuant to 52:27D-320(c); and

3. The municipality is in compliance with all reporting requirements of COAH or the Superior Court.

(c) Land acquired through this program must be restricted, at the time of purchase to affordable housing only, in accordance with, and by instruments approved by the Department. Mixed income and mixed use projects are not eligible.

(d) MLA assistance will be provided to the municipality in the form of a loan. The loan shall not be considered a general obligation of the municipality.

1. Repayment of the loan will be secured by an interest in the municipality's Housing Trust Fund established pursuant to N.J.A.C. 5:94-6.11.

2. The municipality will repay the loan from:

i. The proceeds generated from the sale of the property to an affordable housing developer; and

ii. Any funds within the municipality's Housing Trust Fund that were allocated in its approved spending plan, but not actually disbursed, shall be remitted to the Department as payment, unless the municipality can justify the deviation from the approved spending plan.

3. The interest rate on the loan shall be zero percent for the first five years. If, after five years, the proposed affordable housing project has not been placed in service, the interest rate shall increase to seven percent, compounded annually. When the proposed housing is placed in service, the interest rate will revert to zero percent.

4. The municipality may retain ownership of the property and sell or lease it below market value, provided that evidence is presented that the retention or sale will benefit the residents of the proposed housing.

(e) The percentage of the municipality's Housing Trust Fund that must be dedicated to repayment of the loan pursuant to paragraph (d)2ii above shall be determined on a periodic basis to coincide with approval and/or review of the municipality's spending plan.

(f) MLA projects may be combined with any other eligible project type.

N.J. Admin. Code § 5:43-3.6

New Rule R.1992 d.144, effective 4/6/1992.
See: 23 N.J.R. 1075(a), 24 N.J.R. 1385(a).
Amended by R.1995 d.339, effective 6/19/1995.
See: 27 N.J.R. 1508(a), 27 N.J.R. 2385(a).
Rewrote (e) and added the provisions in Appendices B and C concerning studios.
Recodified from 5:14-3.7 and amended by R.1996 d.226, effective 5/20/1996.
See: 28 N.J.R. 6(a), 28 N.J.R. 2573(a).
Section was "Single room occupancy projects".
Amended by R.1998 d.438, effective 9/8/1998.
See: 30 N.J.R. 1880(a), 30 N.J.R. 3239(b).
In (a), substituted a reference to reconstruction for a reference to substantial rehabilitation in the introductory paragraph.
Amended by R.2002 d.325, effective 10/7/2002.
See: 33 N.J.R. 3261(a), 34 N.J.R. 3500(a).
Rewrote (d).
New Rule, R.2007 d.202, effective 7/2/2007.
See: 38 N.J.R. 3711(a), 39 N.J.R. 2517(a).
Former N.J.A.C. 5:43-3.6, Homeownership projects, recodified to N.J.A.C. 5:43-3.5.