Application Process: Requests for City Living Program Funds must be made at the time of application for NJHMFA first mortgage construction/permanent or permanent only financing by completing the applicable portion of the first mortgage application.  The following guidelines are for the City Living Program and are in addition to the regular HMFA mortgage requirements.

Eligible Borrowers: Any for-profit person, partnership, or corporation or any not-for-profit organization which has as one of its purposes the development, construction and improvement or rehabilitation of housing projects.

Sponsoring entity must be formed for the sole purpose of owning and operating the project and shall own no other assets unrelated to the project.

Eligible Projects: Project comprised of 50 or more rental housing units, which will be newly created by:

1. New construction;
2. Substantial rehabilitation of existing unoccupied housing developments; or
3. Conversion or adaptive reuse of existing structures.

Ineligible Activities

Projects are those receiving or consisting of:

• Construction only loans;
• Moderate rehabilitation loans;
• Assisted Living Facilities;
• Senior Projects;
• Projects in which more than 20 percent of the units have income-based deed restrictions; and/or
• Projects containing housing units already occupied at time of application.
  

• Maximum loan of $40,000 per rental unit containing one or more bedrooms
• Maximum loan of $10,000 per studio apartment
• Maximum loan per project is the lesser of: 1) $4 million, 2) 50 percent of the first mortgage amount, or 3) maximum subsidy per unit calculation.
• The funding is available for all units in the project, including any income restricted units.
• Funding is limited to one City Living Loan per eligible municipality.
  

Loan Structure: The City Living loan will be structured as a second mortgage subordinate only to HMFA financing

Interest Rate:

• Zero percent interest during construction.
• One percent simple interest per annum on the outstanding principal balance upon amortization of the first mortgage loan.

Repayment Terms:

• Repayment will begin on the first day of the 25th month from the first mortgage loan amortization start date to allow for a 2 year rent-up period prior to the City Living loan repayment start date. Interest will accrue at a simple interest rate of one percent per annum on the outstanding principal balance during the 24 month period.
• The payment will be in an amount equal to 25 percent of the project's available cash flow after the funding of escrows, as required by the NJHMFA, but prior to the distribution of Return of Equity.
• The City Living loan will be coterminous with the NJHMFA first mortgage loan. Any balance outstanding on the City Living loan will be due in full at the end of the term of the first mortgage loan.

Income Restrictions:

Admission to the market rate rental units in eligible housing projects shall be limited to families whose gross aggregate family income at the time of admission does not exceed six time the annual rental or carrying charges approved by the Agency, except for families with three or more dependents, whose incomes may be up to seven times the annual rental or carrying charges.  Annual rental or carrying charges shall include the value or cost of heat, light, water, sewerage, parking facilities and cooking fuel which are provided to or incurred by the family in connection with its occupancy of a dwelling.  In addition, carrying charges include rent normally associated with rental projects as well as other costs associated with cooperative apartments.  There may also be included an amount equal to six percent of the original cash investment of the family in a mutual or cooperative housing project and the value or cost of repainting and replacing any fixtures or appliances.

Financing Requirement: City Living loans must be used in conjunction with NJHMFA first mortgage construction and permanent, or permanent only loans.

Additional Underwriting Criteria:

First mortgage loans utilizing a City Living secondary loan will be underwritten at a debt service coverage ratio of 1.25 for the initial 15 years of the first mortgage loan.

Additional Documentation Required:

1. A municipal endorsed Community Revitalization Plan (“Plan”), which indicates that the project is in the area of redevelopment and is a part of the Plan.
   
   The Plan must include:
   1. Tax map that delineates revitalization area boundaries;
      
   2. Description of Community Revitalization Planning Process;
      
   3. List of stakeholders that developed the Plan;
      
   4. Land Use Survey that includes vacant building and lots, and use of each parcel;
      
   5. Demographic, social, and economic profiles of the revitalization area;
      
   6. Narrative describing the impact of the Plan on achieving long-term viability in the target area; and
      
   7. An implementation strategy that contains:
      
      1. A list of organizations participating in the implementation phase of the Community Revitalization Plan.
         
      2. A strategy for meeting objectives described in the Plan.
         
      3. A list of projects and/or proposed projects in the revitalization area. Each project should include a scheduled date of completion determined at the discretion of participating organizations.
2. A Traditional Mixed Use Criteria Narrative and supporting documentation that provide evidence that the redevelopment area consists of or, upon implementation of the Plan will consist of the following criteria:
   1. A mix of residential, retail, service, office, government, social recreational, and religious uses;
      
   2. Enough residents/workers/visitors to support the mixed uses;
      
   3. Walkable environment and people sized scale;
      
   4. Multi-modal transportation hubs in which pedestrian, bicycles, car/bus, rail, and water transportation modes are available or connect in or near to the project location;
      
   5. A visual sense of place seen in retained architectural features within individual buildings and the entire built area; and
      
   6. Notable use anchor facilities such as post office, municipal building, bank, and arts center.