N.J. Admin. Code § 5:80-33.15

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

Section 5:80-33.15 - Point system for the Family Cycle

(a) The point system for the Family Cycle is as follows:

1. Applicants may select one of the following options (10 to 20 points):

i. Projects not located within a Targeted Urban Municipality (TUM) tinat extend tineir compliance period for an additional 15 years shall be awarded 20 points. The minimum term of the low-income occupancy commitment is 30 years: a 15-year compliance period plus a 15-year extended use period. An owner electing to extend the compliance period for 15 years will be restricting the property for 45 years-a 30-year compliance period and a 15-year extended use period. This restriction will be enforceable by NJHMFA and future tenants through a deed of easement and restrictive covenant, which shall be recorded by NJHMFA pursuant to State law at the latter of the carryover allocation described at N.J.A.C. 5:80-33.24(a)1 or acquisition of the property; or

ii. Projects located in a TUM that extend their compliance period for an additional 15 years shall be awarded 15 points; or

iii. For single-family and duplex housing that will convert to tenant ownership, 10 points shall be awarded. Such projects must convert to home ownership at the end of the compliance period. Syndication documents must reflect the conversion. The deed of easement and restrictive covenant shall reflect a right of first refusal to be granted by the owner to the tenants.

2. An application shall receive two points if the project utilizes public housing waiting lists.

3. Low-density buildings where at least 25 percent of the tax-credit units are large-family units shall be eligible for five points. Points are based on the percentage of large-family units with respect to the total number of tax-credit units, not on square footage.

4. Applicants may receive up to five points for municipal support.

i. Projects that receive a fixed-rate tax abatement for a 15-year term with a rate of 6.28 percent or less (inclusive of all fees) on the residential component shall receive five points. Projects that receive a fixed-rate tax abatement for a 15-year term with a rate on the residential component of more than 6.28 percent shall receive three points. If the specifics of the tax abatement (for example, percentage of rent roll, term) are not recited in the resolution/ordinance, the financial agreement to the tax abatement shall be included with the application. Proof of an applicant's tax-exempt nonprofit status is not sufficient to qualify for points for tax abatement. In order to receive points pursuant to this category, the resolution/ordinance approving the abatement shall be submitted and must cite the proper statutory authority. For projects receiving tax abatement pursuant to the New Jersey Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 et seq., the first stage of the exemption period shall be for no less than 15 years. Only projects utilizing financing from NJHMFA may be granted abatement pursuant to N.J.S.A. 55:14K-37(b). For information regarding NJHMFA financing, please contact the NJHMFA Division of Multifamily/Supportive Housing and Lending at NJHMFAtaxcredits@nihmfa.aov.

ii. Projects that do not receive a tax abatement at (a)4i above shall capitalize an escrow in an amount equal to two years' worth of taxes and have a 1.20 debt coverage ratio with a minimum of $ 3,000 per unit core operating expenses.

5. As the availability of social services greatly improves the quality of life for residents, NJHMFA awards up to six points for the provision of up to three social services for the compliance period. Two points will be awarded per service offered. A description of each service is required. Examples of services include, but are not limited to: social service coordinator; financial literary services; food insecurity/nutrition services; health promotion programs and screenings; job training and job search assistance; and computer literacy/lab programs. The services shall be affordable, appropriate, available, and accessible to the project's tenants. Services provided free of charge to all residents/seniors of a county/municipality based solely on residency status shall not qualify for points in this category. Applicants shall support their claim to provide social services by providing the following:

i. Evidence of funding sources or documentation of how or by whom the services shall be paid;

ii. Evidence of experience of the service provider for both provision of social service and fulfillment of prior private or governmental contracts; and

iii. Evidence of firm agreements (executed contracts) with service providers for the services.

6. Five points are awarded to projects that have a certified M/WBE with at least a 20-percent interest in the general partner/managing member or pledge to expend a sum equaling at least 20 percent of construction cost on contractors, subcontractors, and material suppliers that are certified M/WBEs.

7. Projects located within a ready to grow area shall be awarded two points.

8. NJHMFA awards up to six points for the provision of unit amenities. Two points will be awarded per amenity offered. The costs of the amenities must be shown in the capital and/or operating budgets, as appropriate. Amenities must be appropriate to the proposed tenant population. The list provided below is not all-inclusive. Substitution of amenities is only permitted with prior approval from NJHMFA. It is incumbent upon the applicant to demonstrate how each substitute amenity provides a comparable benefit to the tenants as those amenities listed below.

i. A security alarm;

ii. A washer and dryer hook-up with drip pan or floor drain;

iii. An ENERGY STAR-labeled frost-free refrigerator of 14 cubic feet for efficiencies and one bedroom, 16 cubic feet for two bedrooms, 18 cubic feet for three bedrooms, and 20 cubic feet for four bedrooms;

iv. An ENERGY STAR-labeled washer and dryer;

v. An ENERGY STAR-labeled dishwasher;

vi. Through the wall, individual dwelling unit air conditioning;

vii. A minimum bedroom size of 100 square feet;

viii. Minimum kitchen cabinets of 14 linear feet (for up to two bedrooms) and 16 linear feet (for three bedrooms or more);

ix. Minimum closet space of 14 linear feet for efficiencies and one bedroom, 24 linear feet for two bedrooms, 30 linear feet for three bedrooms, and 35 linear feet for four bedrooms;

x. Emergency panic/call button, necklace, or bracelet for all residents--senior projects only;

xi. Garages;

xii. Patios;

xiii. Outside storage lockers; and

xiv. Free high-speed internet subscription service in all units. All costs for providing highspeed internet must be shown in the operating budget.

9. NJHMFA awards up to four points for the provision of project amenities. Two points will be awarded per amenity provided. The costs of the amenities must be shown in the capital and/or operating budgets, as appropriate. Amenities must be appropriate to the proposed tenant population. Applicants may select any combination of the following amenities in order to receive the maximum four points. The list provided below is not all-inclusive. Substitution of amenities is only permitted with prior approval from NJHMFA. It is incumbent upon the applicant to demonstrate how each substitute amenity provides a comparable benefit to the tenants as those amenities listed below.

i. A playground (family projects only);

ii. A community room/building (minimum 1,600 square feet);

iii. On-site laundry facilities, using ENERGY STAR-labeled commercial equipment;

iv. Open space set aside for use by all residents, comprising at least 25 percent of the project's permanent open space, of which at least 80 percent is unpaved (rooftop gardens can be included in open space calculations if the roof area is accessible to and can be used by all residents);

v. Average interior unit sizes of 550 square feet for efficiencies, 650 square feet for one bedroom, 875 square feet for two bedrooms, 1,150 square feet for three bedrooms, and 1,250 square feet for four bedrooms;

vi. 1.0 parking spaces per unit (may be off-street: garage, parking lot, pad, or driveway, or on-street: designated/permit);

vii. Healthy food delivery program (at least twice per month); and

viii. Smoke-free community.

10. Projects that demonstrate community policing or public safety enhancements shall be awarded two points. Applicants may select any of the following strategies in order to receive the points. Tine list provided below is not all-inclusive. Substitutions are only permitted with prior approval from NJHMFA. It is incumbent upon the applicant to demonstrate how the proposed substitution provides a comparable benefit to the tenants as those items listed below.

i. An evening security guard;

ii. On-site community policing station;

iii. Camera/security system in each building;

iv. Coordination/training for community policing groups and/or property manager by a governmental law enforcement agency;

v. Incorporation of Community Policing Through Environmental Design (CPTED) characteristics in the design, layout, and construction of buildings and on-site facilities;

vi. Partnerships or agreements that increase on-site police and security patrols on the development site (that is, leveraging partnerships with other funding sources for police salaries such as State Urban Enterprise Zones, Special Improvement Districts, Community Oriented Policing grants, etc.);

vii. Innovative approaches that increase the number of community policing volunteers as residents of the development (including rent reductions or subsidies where allowable); and

viii. Using operating funds or alternative funding sources such as Urban Enterprise Zone funds or HUD grants to purchase or subsidize the purchase of take-home police vehicles for law enforcement officers in the development.

11. Applications may receive up to a maximum of six points for the following (to be eligible for points in this category, proximity to the locations at (a)11i(1) through (20) below shall be addressed in the market analysis as required at N.J.A.C. 5:80-33.12(c)1). At a minimum, structures must have building permits issued and be under construction to qualify:

i. As indicated, projects located within one-half mile of the positive land uses at (a)11i(1) through (8) below shall receive two points. Family Cycle projects located within three miles of positive land uses (a)11i(1) through (20) below shall be awarded one point. Age-Friendly Senior Cycle and Supportive Housing Cycle projects located within one mile of positive land uses at (a)11i(1) through (20) below shall be awarded one point. Multiple points shall not be awarded for proximity to multiple positive land uses of the same category (that is, a project located within one-half mile of two supermarkets will receive two points, not four points). While a project may qualify for more than six points, an application can receive no more than six points for positive land uses:

(1) Full-service grocery store or supermarket (minimum 15,000 square feet, non-senior projects only, unless dedicated transportation to the full-service grocery store or supermarket is provided as set forth at N.J.A.C. 5:80-33.16(b)2 i)--two points;

(2) Hospital/medical clinic--two points;

(3) Public school (non-senior projects only)--two points;

(4) Senior center (senior projects only)--two points;

(5) Licensed day care services (non-senior projects only)--two points;

(6) Family success center (non-senior projects only), a list of which can be found here: https://www.nj.gov/dcf/families/support/success/--two points;

(7) One-stop career center (non-senior projects only), a list of which can be found at http://nj.gov/labor/career-services/job-search/get-support/onestoplocations.shtml--two points;

(8) Community mental health center/counseling center (Supportive Housing Cycle only)--two points;

(9) Pharmacy--one point;

(10) Department or retail merchandise store--one point;

(11) Bank/credit union--one point;

(12) Restaurant (other than fast food restaurants)--one point;

(13) Indoor public recreation facilities, such as civic centers, community centers, and libraries--one point;

(14) Outdoor public recreation facilities, such as parks and swimming pools--one point;

(15) Medical day care (senior projects only)--one point;

(16) Medical offices (physician, dentistry, or optometry)--one point;

(17) Religious institution--one point;

(18) Post office, city hall, or county courthouse--one point;

(19) Fire/police station--one point; and

(20) Institution of higher education or continuing education--one point.

ii. Projects located within one mile of the following negative land uses at (a)11ii(1) through (8) below shall have three points deducted from the project score for each qualifying item, up to a maximum of six points for each application:

(1) Landfill;

(2) Garbage dump;

(3) Trash incinerator;

(4) Nuclear power plant;

(5) Oil/chemical refinery;

(6) Unremediated Superfund or toxic waste site as identified by the Environmental Protection Agency (EPA) or the New Jersey Department of Environmental Protection (DEP);

(7) Jail/prison; and

(8) Wastewater treatment facility.

iii. Example: A project is located within one-half mile of an elementary school, a grocery store, and an oil refinery. The project shall be awarded one point.

12. Applications that include a commitment letter signed by the syndicator or investor or executed partnership agreement/operating agreement specifying net pricing and net capital contributions within the NJHMFA equity range shall receive three points. Applicants utilizing the credits themselves do not have to submit a syndicator letter to receive the points. Term sheets do not qualify for these points.

13. Applications may receive up to a maximum of four points for the following:

i. Applicants may select one of the following green building options and receive four points:

(1) Enterprise Green Communities, Mandatory + 40 optional points or higher with climate-adaptive selections;

(2) Leadership in Energy and Environmental Design (LEED), Silver or higher with climate-adaptive selections;

(3) National Green Building Standard (NGBS), Silver or higher with climate-adaptive selections;

(4) NJ Zero Energy Ready Homes + renewables;

(5) Living Building Challenge; or

(6) Passive House.

ii. Alternatively, applicants may select one of the following green building options for three points:

(1) Enterprise Green Communities, Mandatory + 40 optional points;

(2) Leadership in Energy and Environmental Design (LEED), Silver or higher; or

(3) National Green Building Standard (NGBS), Silver or higher.

14. Applicants may select any of the following options. A maximum of 12 points shall be available in this category:

i. Redevelopment projects, rehabilitation of historic buildings, or projects that involve the adaptive reuse of a non-residential building shall qualify for one point. A significant component of the development (40 percent or more of the units) shall be located within a historic building or a building being adaptively reused;

ii. A project may select one of the options set forth at (a)14ii(1), (2), (3), or (4) below based on the availability of public transportation. A project will qualify for up to two additional points if the municipality in which it is fully located has a jobs-to-housing ratio of 1.5 or greater or will qualify for one additional point if the municipality in which it is fully located has a jobs-to-housing ratio between 0.95 and 1.5. NJHMFA shall rely on the most recent data available from the New Jersey Department of Labor and Workforce Development and the American Community Survey 5-Year Estimates, Table B25001, as of the application deadline, as well as the data for the preceding calendar year. Up to five points for public transportation and/or jobs availability can be received for each application.

(1) The project is fully located within a Transit Village district--five points;

(2) The project is fully located within one-quarter mile of public transportation that is operated by a publicly owned entity or authority--three points;

(3) The project is fully located within one-half mile of public transportation that is operated by a publicly owned entity or authority--two points; and

(4) The project is fully located within one-half mile of public transportation that is paid for by the development--one point;

iii. A project shall receive points as set forth at (a)14iii(1), (2), or (3) below based on the school district in which it is fully located, according to the percentage of students that are either meeting expectations (Level 4) or exceeding expectations (Level 5) on the Grade 4 New Jersey Student Learning Assessments (NJSLA) in both Math and English Language Arts (ELA). NJHMFA shall rely on the most recent data available from the New Jersey Department of Education (DOE) as of the application deadline, as well as the data for the preceding calendar year. For example, the data released for 2021 and 2022 by the DOE will be accepted for applications submitted in 2023. If the NJSLA is no longer in use, NJHMFA will substitute whatever assessment is designated as a replacement by the DOE. A project will qualify for one additional point if the school district in which it is fully located participates in New Jersey's Interdistrict Public School Choice Program starting no later than Grade 6. Up to three points for school district characteristics can be received for each application.

(1) At least 66 percent of Grade 4 students are either Level 4 or Level 5 on the NJSLA in both Math and ELA -- three points;

(2) At least 50 percent of Grade 4 students are either Level 4 or Level 5 on the NJSLA in both Math and ELA, but the percentage of such students is below 66 for one or both subjects -- two points; and

(3) At least 40 percent of Grade 4 students are either Level 4 or Level 5 on the NJSLA in both Math and ELA, but the percentage of such students is below 50 for one or both subjects -- one point;

iv. For projects located outside of a TUM, a project in a municipality that has a ranking of 283 or greater in the most recent Municipal Revitalization Index (MRI) published by DCA shall be eligible for three points. A project in a municipality with a ranking of 282 or below shall be eligible for two points and may receive one additional point if it satisfies a municipal affordable housing obligation and is part of a court-approved municipal fair share housing development plan. To receive the additional point, sponsors must submit the fair share housing development plan listing the project and evidence of court approval in the application. Senior projects are not eligible to earn this additional point; and

v. For projects located within a TUM, two points shall be awarded to projects located within a census tract that has been designated by the Secretary of the U.S. Department of the Treasury as a Qualified Opportunity Zone pursuant to Section 1400Z-2 of the Code and as further identified in Notice 2018-48.

15. Applications that have a general partner, voting member, developer, or related party that owns a managing or controlling interest in a New Jersey LIHTC project with an uncorrected noncompliance shall have the following points deducted from the application's score: 15 points shall be deducted for violations of State and municipal maintenance ordinances or health ordinances or failure of one or more major systems (for example, roof, HVAC, elevators, plumbing, and electric); and 10 points shall be deducted for a failure to fulfill any Qualified Allocation Plan provisions as represented by an owner in a project's New Jersey LIHTC application. For noncompliance that cannot be corrected, points under this category shall only be deducted for the first year each application is submitted. Failure to respond to this point category shall result in the deduction of points as provided pursuant to this paragraph. Applications that receive negative points in this category do not qualify for the set-asides described at N.J.A.C. 5:80-33.4, 33.5, and 33.6.

16. Applications that have a general partner, voting member, developer, or related party that was involved in a full return of tax credits to NJHMFA within the past two years with such return occurring after October 15 of the year in which the project would have been required to be placed in service shall have five points deducted from the application's score. Failure to respond to this point category shall result in the deduction of points as provided pursuant to this paragraph. This point category shall only apply to the first application from the involved general partner, voting member, developer, or related party following the full return of tax credits.

17. Applications that have a general partner, voting member, developer, or related party that owns a managing or controlling interest in a New Jersey LIHTC project that has failed to pay NJHMFA monitoring fees (unless NJHMFA has formally issued a deferral) shall have 15 points deducted from the application's score. Failure to respond to this point category shall result in the deduction of points as provided pursuant to this paragraph. Applications that receive negative points in this category do not qualify for the set-asides described at N.J.A.C. 5:80-33.4, 33.5, and 33.6.

18. Applications that have a general partner, voting member, developer, or related party that owns a managing or controlling interest in a New Jersey LIHTC project that has failed to submit its annual project certifications and/or annual tenant information shall have 15 points deducted from the application's score. Failure to respond to this point category shall result in the deduction of points as provided pursuant to this paragraph. Applications that receive negative points in this category do not qualify for the set-asides described at N.J.A.C. 5:80-33.4, 33.5, and 33.6.

19. Applications that have a general partner, voting member, developer, or related party that owns a managing or controlling interest in a New Jersey LIHTC project that, within the last four years, has received a finding of discrimination pursuant to the Fair Housing Act, 42 U.S.C. §§ 3601 through 3619, a finding of discrimination pursuant to the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., failed to comply with New Jersey fair housing policies or tenant selection standards, or been issued a monetary penalty pursuant to the Fair Chance in Housing Act, N.J.S.A. 46:8-52 et seq., shall have 15 points deducted from the application's score. A finding of discrimination includes an adverse final decision by the Secretary of HUD, 24 CFR 180.680, an adverse final decision by a substantially equivalent State or local fair housing agency, 42 U.S.C. § 3616a(a)(1), or an adverse judgment from a Federal or State court. Failure to respond to this point category shall result in the deduction of points as provided pursuant to this paragraph. Applications that receive negative points in this category do not qualify for the set-asides at N.J.A.C. 5:80-33.4, 33.5, and 33.6.

20. Applicants may select one of the following:

i. Applications with a general partner, voting member, developer, or related party (with at least a 50-percent interest in the general partner/managing member) that has successfully developed and operated at least two other LIHTC projects with at least a 50-percent ownership stake in each project shall receive three points;

ii. Applications with a general partner, voting member, developer, or related party (with at least a 50-percent interest in the general partner/managing member) that has successfully developed and operated at least three other LIHTC projects with at least a 20-percent ownership stake in each project and has entered into a management agreement with a property management company that has at least five years of experience monitoring LIHTC projects and a tax credit portfolio of no less than 300 units shall receive three points; or

iii. Applications with a general partner, voting member, developer, or related party (with at least a 50-percent interest in the general partner/managing member) that has successfully developed and operated at least one other LIHTC project and has entered into a management agreement with a property management company that has at least five years of experience monitoring LIHTC projects and a tax credit portfolio of no less than 300 units shall receive two points.

21. Applicants may select one of the following:

i. Projects that set aside five units or five percent of the total project units, whichever is greater, for individuals or families who are homeless, and which projects meet the criteria at N.J.A.C. 5:80-33.12(c)1 4 shall receive three points. After the project is placed in service, the project shall register these units and collect tenant data in HMIS. In the Family Cycle, the mix of these units must be proportionate to one one-bedroom, two two-bedroom, and two three-bedroom units; or

ii. Projects that rent five units or five percent of the total project units, whichever is greater, to individuals with disabilities who are leaving institutions pursuant to the decision in Olmstead v. L.C., 527 U.S. 581 (1999), or individuals with disabilities who are at risk of institutionalization, and which projects meet the criteria at N.J.A.C. 5:80-33.12(c)14 shall receive two points.

22. Projects that select the 20 percent at 50 percent Federal set aside as defined under Section 42(g)(1)(A) of the Code or elect to restrict 10 percent of the tax credit units to households earning 30 percent or less of area median income adjusted for family size shall receive eight points. If the 20 percent at 50 percent election is selected, all tax credit units shall be restricted to 50 percent of the area median income adjusted for family size. For example, if the project has an applicable fraction of 100 percent, 100 percent of the units shall be restricted to 50 percent of the area median income adjusted for family size. The election shall be reflected on each building's IRS Form 8609 and/or on the deed of easement and restrictive covenant. Projects that select the 10 percent at 30 percent option must still satisfy the Code minimum tenant income elections at Section 42(g)(1)(A) or (B) and demonstrate that best efforts will be made to distribute the 30 percent units proportionately across all unit sizes.

23. Applicants that utilize the cure period at N.J.A.C. 5:80-33.11(c)1 or 3 shall have one point per each defect cured deducted from the application's score.

24. Applications that have a general partner, voting member, developer, or related party that owns a managing or controlling interest in an NJHMFA-financed property with three or more months of arrearages, with no workout plan (as approved by the Executive Director), shall have 15 points deducted from their scores.

25. Applicants may select one of the following options for one bonus point:

i. At least 20 percent of the units are set aside for unrestricted, market-rate tenants. Applicants that select this option are not eligible for the 130-percent basis boost, which is authorized pursuant to the Housing and Economic Recovery Act of 2008 (HERA);

ii. At least 20 percent of the units are underwritten at or below 30 percent of area median income (AMI). Units with rental assistance do not qualify for this point; or

iii. Traditional multifamily pooled permanent bond financing through NJHMFA.

N.J. Admin. Code § 5:80-33.15

Amended by 49 N.J.R. 435(a), effective 3/6/2017

Amended by 51 N.J.R. 833(a), effective 6/3/2019

Amended by 56 N.J.R. 343(b), effective 3/4/2024