Bill Text: NJ S3780 | 2022-2023 | Regular Session | Amended
Bill Title: Provides down payment assistance for benefit of certain first-time homebuyers; establishes Resilient Home Construction Pilot Program.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2023-06-30 - Substituted by A5415 (2R) [S3780 Detail]
Download: New_Jersey-2022-S3780-Amended.html
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator M. TERESA RUIZ
District 29 (Essex)
Co-Sponsored by:
Senators Johnson and Cruz-Perez
SYNOPSIS
Provides down payment assistance for benefit of certain first-time homebuyers; establishes Resilient Home Construction Pilot Program.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on June 27, 2023, with amendments.
An Act concerning housing assistance for certain homebuyers and developers, supplementing Title 55 of the Revised Statutes 1[, P.L.1974, c.80 (C.34:1B-1 et seq.), and P.L.1985, c.222 (C.52:27D-301 et seq.), and making an appropriation] and Title 52 of the Revised Statutes1.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in 1[sections 1 through 2 of]1 P.L. , c. (C. through C. ) (pending before the Legislature as this bill):
"Agency" means the New Jersey Housing and Mortgage Finance Agency established pursuant to section 4 of P.L.1983, c.530 (C.55:14K-4).
1"Commissioner" means the Commissioner of Community Affairs.
"Department" means the Department of Community Affairs.1
"Down payment assistance" or "assistance" means financial assistance for first-time homebuyers to acquire single-family housing for principal residence through the loan program.
"Executive director" means the Executive Director of the New Jersey Housing and Mortgage Finance Agency.
"First-generation homebuyer" means a first-time homebuyer, who is:
a. an individual:
(1) whose parents or legal guardians do not have any present ownership interest in any residential real property in any state or territory of the United States, or outside of the United States; and
(2) whose spouse, or domestic partner, and each member of whose household has not, during the 3-year period ending upon acquisition of the eligible home to be acquired using such assistance, had any present ownership interest in any residential real property used as their principal residence in any state or territory of the United States, or outside of the United States; or
b. an individual who has at any time been placed in foster care in the State.
"First-time homebuyer" means a homebuyer who, in accordance with rules and regulations adopted by the agency, has not owned any residential real property as their principal residence within the preceding three years, and is utilizing a mortgage product offered by the agency through an agency homebuyer program to purchase single-family housing 1, and has a gross household income that does not exceed a limitation determined by the agency1.
"Loan program" means the zero-interest, forgivable loan program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Principal residence" means a homestead that is actually and continually occupied as the permanent residence of a household, as distinguished from a vacation home, real property owned and rented or offered for rent by the household, or other secondary real property holdings.
"Single-family housing" means a one- to four-family residence, a condominium unit, a cooperative unit, a combination of a manufactured housing and lot, or a manufactured housing lot.
2. a. There is established in the agency a zero-interest, forgivable loan program to provide down payment assistance for first-time homebuyers to achieve homeownership. The loan program shall provide down payment assistance to defray the costs associated with acquiring single-family housing for principal residence, as provided for in subsection b. of this section. A first-time homebuyer shall commit to use the home as their principal residence for five years following the purchase of the home. The agency shall forgive the loan, provided that the five-year commitment is satisfied and the first-time homebuyer meets the other requirements established pursuant to 1[P.L. , c. (C. ) (pending before the Legislature as this bill)] subsection c. of this section1.
b. (1) The down payment assistance provided pursuant to this section shall be in the form of a zero-interest, forgivable loan award. The loan award shall be in the amount of $15,000.
(2) In addition to a loan award that may be provided pursuant to paragraph (1) of this subsection, a first-generation homebuyer shall be eligible for a zero-interest, forgivable loan award of an additional 1award amount of not less than $7,000 and not more than1 $10,000 to be used for down payment assistance.
(3) Each first-time homebuyer who receives down payment assistance through the loan program shall, prior to the award of down payment assistance, complete not less than eight hours of a homebuyer counseling course, as directed by the agency pursuant to subsection c. of this section. The homebuyer counseling course shall include, but not be limited to, coursework concerning:
(a) the maintenance of housing costs, including methods for budgeting mortgage payments, utility charges, property taxes, and any other applicable housing cost;
(b) the basics of home finance, property taxes, home warranties, and home inspection;
(c) the legal components of finalizing a home purchase; and
(d) the process of finding an appropriate house, including how to search real estate listings through a real estate agent or other sources.
c. The executive director shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) 1[, on or before the first day of the third month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill),]1 to effectuate, administer, and accomplish the purposes of the loan program. 1Notwithstanding the limitations established in section 1 of P.L.2011, c.215 (C.52:14B-3a) on the use of regulatory guidance documents, the executive director shall prepare and disseminate guidelines or regulatory guidance documents, on or before the first day of the third month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), in advance of the adoption of rules and regulations to effectuate, administer, and accomplish the purposes of the loan program.1 The 1guidelines, guidance documents, and1 rules and regulations shall, at a minimum, set forth the requirements for application submissions, the criteria for application selections, the eligible uses of down payment assistance, eligibility as a first-time or first-generation homebuyer, and the curriculum and provision of the homebuyer counseling course.
d. The agency shall permit an individual to establish eligibility for the loan program as a first-generation homebuyer via self-attestation, under penalty of perjury. However, nothing in this subsection shall preclude the agency from establishing measures to identify and deter fraudulent attestations. If it is established that an individual has received assistance as a result of a fraudulent attestation, the individual shall reimburse the agency for the assistance.
e. A down payment assistance loan shall be recoverable as a lien on the real property that the loan is used to purchase, and shall have the priority of a mortgage lien.
f. The annual appropriations act 1for State fiscal year 2024 shall include an appropriation from the General Fund to the loan program, and the annual appropriations acts following State fiscal year 20241 shall appropriate not less than $25 million from the General Fund to the agency, during each 1State fiscal1 year in which the loan program remains in operation, to 1effectuate the purposes of the loan program and1 defray the costs associated with administering the loan program, except that the agency shall retain not more than five percent of the annual appropriation for administrative costs. 1Of the total amount of down payment assistance funding awarded each State fiscal year through the loan program, not less than 50 percent shall be awarded to first-generation homebuyers, unless the agency determines that 50 percent of the down payment assistance funding cannot be awarded to first-generation homebuyers, because too few first-generation homebuyers have applied for the loan program, in which case, more than 50 percent of the funding shall be awarded to first-time homebuyers who are not first-generation homebuyers.1
g. No later than the 730th day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the agency shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The report shall analyze the efficacy of the loan program. The report shall provide an overview of the total amount of down payment assistance provided by the agency, with information by census tract on the race and ethnicity of the recipients of assistance. The report also shall analyze:
(1) the impact of the down payment assistance on the total housing costs of the recipients of such assistance;
(2) the impact of the additional loan award for first-generation homebuyers provided pursuant to paragraph (2) of subsection b. of this section, and the other components of the loan program, on first-generation homeownership; and
(3) any other information determined by the agency to be relevant to the costs and benefits of the loan program.
1[3. As used in sections 3 through 4 of P.L. , c. (C. through C. ) (pending before the Legislature as this bill):
"Agency" means the New Jersey Housing and Mortgage Finance Agency established pursuant to section 4 of P.L.1983, c.530 (C.55:14K-4).
"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c.80 (C.34:1B-4).
"Construction or reconstruction" means the development of real property through means of new construction, or through rehabilitation or renovation of an existing structure, provided that the rehabilitation or renovation has received at least $50,000 in construction investment.
"Construction or reconstruction commitment" means a commitment, including any assurances the authority determines necessary, made by a taxpayer-developer, to the construction or reconstruction of one or more qualified residential properties in a distressed municipality for purchase by one or more first-time homebuyers in compliance with section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Distressed municipality" means a municipality with a distress score of 50 or higher according to the 2020 Municipal Revitalization Index distress score for the municipality, determined by the Department of Community Affairs.
"First-time homebuyer" means a household with a gross household income of less than 140 percent of the median gross household income for households of the same size within the housing region in which the qualified residential property is located, and for whom no member of the household has owned a home during the three-year period prior to the purchase of the home.
"Principal residence" means a qualified residential property that is actually and continually occupied by a first-time homebuyer as the homebuyer's permanent residence, as distinguished from a vacation home, real property owned and rented or offered for rent by the homebuyer, and other secondary real property holdings.
"Qualified home purchase" means the acquisition of a qualified residential property that is occupied as a first-time homebuyer's principal residence following construction or reconstruction by a taxpayer-developer; provided, however, that the value of the qualified residential property does not exceed 75 percent of the median home sale price for homes in the county in which the qualified home purchase occurs, in accordance with data approved by the agency.
"Qualified residential property" means a dwelling house, a condominium unit under the form of real property ownership provided for under the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), a unit in a cooperative or mutual housing corporation, a unit in a horizontal property regime under the form of real property ownership provided under the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.), a unit in a continuing care retirement community, or a manufactured home that is taxable as real property or that is installed in a mobile home park.
"Tax credit program" means the New Jersey Homebuyer Tax Credit Program, established pursuant to subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Taxpayer-developer" means a developer that commits to the construction or reconstruction of one or more qualified residential properties that are to be sold through qualified home purchases to first time homebuyers for use as principal residences.
"Value gap" means the amount of a loss, if any, incurred by a taxpayer-developer, determined by subtracting the income of the developer, as derived from the purchase price paid in a qualified home purchase, from the cost of developing the qualified residential property sold in the qualified home purchase.]1
1[4. a. There is established a New Jersey Homebuyer Tax Credit Program to be administered by the authority in coordination with the agency. A taxpayer-developer shall be allowed a credit against the tax otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as applicable, for each individual qualified home purchase completed with a first-time homebuyer in an amount not greater than the lesser of:
(1) 20 percent of the sale price of the qualified home purchase; or
(2) the amount of the value gap incurred by the developer following a qualified home purchase.
b. The authority shall award the tax credit established by this section to a taxpayer-developer for securing a qualified home purchase by a first-time homebuyer following construction or reconstruction of a qualified residential property in a distressed municipality; provided, however, that the first-time homebuyer commits to use the home as their principal residence for 10 years following the date of the qualified home purchase.
c. (1) The amount of all credits allowed pursuant to this section shall not exceed $100,000,000, to be conditionally approved for allocation over four terms as follows:
(a) up to $25,000,000 for construction or reconstruction commitments made on or before the 365th day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill); and
(b) up to $25,000,000 for construction or reconstruction commitments made after the 365th, but before the 730th, day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
(2) Upon a joint resolution adopted by the Senate and General Assembly and signed by the Governor that extends the tax credit program, as described in paragraph (2) of subsection g. of this section, the balance of credits allowed pursuant to an extension of the tax credit program shall be conditionally approved for allocation as follows:
(a) up to $25,000,000 for construction or reconstruction commitments made on or before the 365th day next following the date the Governor signs the joint resolution; and
(b) up to $25,000,000 for construction or reconstruction commitments made after the 365th, but before the 730th, day next following the date the Governor signs the joint resolution.
d. Tax credits shall be conditionally approved for allocation pursuant to the timelines established in subsection c. of this section. The authority shall conditionally approve a tax credit for a taxpayer-developer if the taxpayer-developer enters into a construction or reconstruction commitment. A tax credit shall be allocated upon the execution of a contract for sale of a qualified home purchase. The total amount of the credit allowed shall be applied against the tax otherwise due from the taxpayer-developer pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) or the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as applicable. A tax credit issued pursuant to this section shall be applied against taxes otherwise due during the taxable year in which the credit is allocated, or may be carried forward and applied against taxes otherwise due in any of the four subsequent taxable years.
e. The agency shall ensure that convenient means are established for first-time homebuyers to apply to purchase homes constructed pursuant to this section. A first-time homebuyer who purchases a qualified residential property pursuant to this section shall commit to using the home as the homebuyer's principal residence for 10 consecutive years after the home purchase.
f. A first-time homebuyer shall be required to pay a penalty to the authority in an amount equaling the lesser of $5,000 or one percent of the value of the home, upon a determination by the authority the first-time homebuyer has violated the requirements of this section, including but not limited to:
(1) the failure of a first-time homebuyer to use the home as the homebuyer's principal residence for 10 consecutive years after the home purchase; or
(2) the use of an agent to conceal the identity of the true purchaser of the home for purposes of completing more than one qualified home purchase pursuant to this section.
g. (1) No later than the 730th day next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), the Office of Revenue and Economic Analysis in the Department of the Treasury shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature. The report shall analyze the costs and benefits of the tax credit program provided by this section, including but not limited to:
(a) the impact of the tax credit program on State revenues;
(b) the extent to which home purchases by first-time homebuyers, including but not limited to purchases of new qualified residential property, increased during the terms the tax credit was available to taxpayer-developers, as compared with historical trends and comparable housing markets outside of New Jersey;
(c) whether the data suggests that a two-year extension of the tax credit program may have a material, positive impact on the State's construction, real estate, and any other sectors of the State economy;
(d) whether the fiscal condition and outlook of the State has materially changed such as to materially affect the purpose underlying the tax credit program to promote home ownership and strengthen key sectors of the State's economy; and
(e) any other information determined by the Office of Revenue and Economic Analysis to be relevant to the costs and benefits of the tax credit program to the State.
(2) Upon receipt of the report pursuant to this subsection, the Legislature may adopt and the Governor may sign a joint resolution that extends the tax credit, as described in paragraph (2) of subsection c. of this section, for an additional two years, except as otherwise provided in this section.
h. On or before the first day of the third month next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the authority, in coordination with the agency, shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of the tax credit program. The rules and regulations of the authority shall include, but shall not be limited to:
(1) The establishment of a limitation on tax credit conditional approvals and allocations to projects that do not obtain nine-percent tax credits provided for by the federal Low Income Housing Tax Credit program pursuant to section 42 of the Internal Revenue Code (26 U.S.C. s.42), and shall make other appropriate limitations on eligibility; and
(2) Detailed guidance on the calculation of development costs, and income derived from a qualified home purchase, for the purposes of calculating the value gap.
i. If any amount of tax credits made available pursuant to this section are not conditionally approved in accordance with the timeline established pursuant to subsections a. through d. of this section, then the Legislature shall in the next subsequent fiscal year appropriate an amount equivalent to the value of the non-conditionally approved tax credits to the New Jersey Housing and Mortgage Finance Agency for the purposes of providing further down payment assistance through the loan program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).]1
1[5. a. A municipality shall be provided with an opportunity to contribute funding towards the construction or reconstruction of a home purchased by a low- or moderate-income homebuyer through the tax credit program established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill). If a low- or moderate-income homebuyer completes a home purchase as provided in this section, and the municipality contributes no less than $10,000 towards the construction or reconstruction of the unit, then the agency shall notify the administrative agent or other appropriate official of the municipality that the municipality shall count the property towards the municipality's present or prospective fair share obligation.
b. For the purposes of this section "low- or moderate-income homebuyer" means a household that has a gross household income that is less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located.]1
13. a. There is established in the Department of Community Affairs a Resilient Home Construction Pilot Program for the purpose of providing funding for developers to rehabilitate existing homes and construct new affordable homes for sale.
b. As part of the pilot program, the department shall develop an application process and promulgate criteria that enables a developer to qualify for funding for the rehabilitation or construction of homes for sale. Among such other criteria as the department deems necessary, the department shall require that:
(1) the homes rehabilitated or constructed for sale are not located in the 500-year floodplain or the inland or coastal climate adjusted floodplain, as defined by Department of Environmental Protection;
(2) the homes rehabilitated or constructed are to be sold to households with a gross household income not to exceed 120 percent of the median gross household income for households of the same size within the housing region in which the housing is located;
(3) the prospective homebuyer is a renter that has been impacted by a storm or natural disaster that has prompted the governor to declare a state of emergency; or a first-time homebuyer, including a first-time homebuyer receiving financial assistance from the agency;
(4) the developer include a purchase discount on the home sale price, as established in accordance with criteria developed by the department; and
(5) the homes for sale contain a minimum period of affordability as determined by the department.
c. Funding to successful pilot program applicants shall be provided in a manner determined by the department and pursuant to an agreement between the department and a successful pilot program applicant, and shall be conditioned upon compliance with the provisions of such an agreement as determined by the department.
d. As part of the pilot program, the department shall permit local government entities to apply for funding to provide to developers to rehabilitate existing homes and construct new, affordable homes for sale, so long as: (1) the application process and criteria imposed by the local government entity on developers is the same as the criteria developed pursuant to subsection b. of this section; (2) the local government entity and the developer enter into an agreement subject to the same requirements as an agreement pursuant to subsection c. of this section; and that funding to the local government entity is conditioned upon compliance with the provisions of an agreement as determined by the department.
e. In addition to the funding provided to developers pursuant to the pilot program, the department may establish incentives to encourage homebuyers to remain in the homes developed pursuant to this pilot program, including through the provision of down payment assistance as a zero-interest forgivable loan for homebuyers who are not eligible or do not qualify for down payment assistance through other State programs including the program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
f. For the purpose of determining the amount of purchase discount, provided pursuant to paragraph (4) of subsection b. of this section, the department shall establish a sale price, pursuant to an appraisal conducted by a professional appraiser hired by the department.1
14. Notwithstanding the limitations established in section 1 of P.L.2011, c.215 (C.52:14B-3a) on the use of regulatory guidance documents, the commissioner may promulgate application and eligibility criteria and guidelines regarding the pilot program through regulatory guidance documents as defined in subsection d. of section 1 of P.L.2011, c.215 (C.52:14B-3a).1
1[6. There is appropriated $25 million from the General Fund to the New Jersey Housing and Mortgage Finance Agency to effectuate and defray the costs associated with administering the loan program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill)] 5. a. The pilot program shall be eligible for funding from the federal "American Rescue Plan Act of 2021," Pub.L.117-2 to the Division of Disaster Recovery and Mitigation in the Department of Community Affairs for the Resilient Home Construction Pilot Program, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), and other funding sources, and of such amounts provided, not more than five percent shall be utilized by the department for organizational, administrative, and other work and services, including salaries, equipment, services, and materials necessary to administer the activities authorized by this subsection.
b. Notwithstanding the provisions of subsection a. of this section to the contrary, the division may transfer the uncommitted balance of any funds made available pursuant to this section for any use authorized pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill). The division shall submit notice to the Joint Budget Oversight Committee, or its successor, no less than five calendar days before the date of a transfer made pursuant to this subsection. The notice shall indicate the amount of the transferred funds and the purpose for which the funds are transferred1.
1[7.] 6.1 This act shall take effect immediately 1[, except that sections 3 through 5 of this act shall take effect on the first day of the sixth month next following enactment to provide time for the authority to prepare to administer the tax credit program]1.
