The Home Express Program offers financing subsidies to developers of affordable rental housing in New Jersey under a streamlined application review process.   Funded with Balanced Housing monies supplied by the NJ Department of Community Affairs (DCA), the program lets developers apply for the needed subsidies at the same time that they apply for federal low income housing tax credits and Agency mortgage financing made available through the New Jersey Housing and Mortgage Finance Agency.

Guidelines for this program are listed below.

Document Checklist (doc 52Kb)

Eligible Applicants

For-profit developers and nonprofit developers

Eligible Project Locations

(Note that the below-listed municipalities are the same eligible locations for all prior Balanced Housing projects):

-- In any municipality which has received substantive certification from the Council on Affordable Housing (COAH), or

-- In any municipality which has petitioned COAH for substantive certification  (funds may be committed but not provided until a municipality’s Fair Share Plan has received substantive certification from COAH), or

-- In any municipality which has entered into a judicially-approved compliance agreement to settle its fair share housing obligation, or

-- In any municipality subject to a court-ordered builder’s remedy (though funding will be neither committed nor provided until the municipality’s Fair Share Plan has been judicially approved by the issuance of a judgment of repose), or

-- In any municipality designated as a receiving municipality under a regional contribution agreement and project plan approved by COAH, or

-- In any municipality which has, at any time since Fiscal Year 1988, been eligible to receive State aid pursuant to P.L. 1978, c.14 (N.J.S.A. 52:27D-178 et seq.).

Eligible Types of Projects

Rental projects in which some or all units are affordable to low/moderate income households and in which Home Express funds are being sought in conjunction with

Federal Low Income Housing Tax Credits (LIHTCs) allocated by the Agency (both 4% and 9% tax credit projects are eligible).

Note that Preservation projects, defined as existing buildings that are occupied (deed-restricted or non-deed restricted), are not eligible for Home Express funding.    Inclusionary projects, defined as mixed income/use developments having a required affordable housing component and located in a non-urban aid municipality, are also not eligible for Home Express funding.

In the event any permanent mortgage debt is also needed for a project funded with both LIHTCs and the Agency’s Home Express financing, the first mortgage loan must be an Agency multifamily permanent mortgage loan (tax-exempt or taxable).  The project’s construction financing may be provided by non-Agency sources.

Types of Available Funding

Home Express funds will be provided to projects in the form of loans.

Loan types:

(1) Construction loans (not including those for local housing authority turnkey projects); 

(2) Construction loans which convert to permanent financing;

(3) Permanent loans for take-out financing.

If needed, other loan types such as conditional bridge loans may be authorized to ensure project feasibility.

Maximum Financing Amount

The Home Express loan amounts available to each project shall be:

For eligible HOPE VI projects:  Up to $10,000 for each low and moderate income unit

For all other eligible 9% LIHTC projects:  Up to $40,000 for each low and moderate income unit

For all other eligible 4% LIHTC projects:  Up to $50,000 for each low and moderate income unit

Additional Home Express subsidy loan amounts may be provided to cover: 

(1) The costs of automatic fire suppression systems – up to $2 per square foot – which are not required by code but are required by the Home Express Program (i.e. rental townhouses), (2) Development costs which are reviewed and approved by DCA under its NJ Affordable Green Program.  

Notwithstanding the above, the total maximum Home Express loan amount per project shall be $4,000,000.

Security, Collateral and Lien Status

Each Home Express loan shall be secured by a note and mortgage and may take a subordinate position behind other lenders.

Financing Term

The financing term of a Home Express loan shall equal that of the Agency mortgage financing and/or the LIHTC requirement, whichever is applicable

Notwithstanding the above:

1. the term of a Home Express loan shall not exceed the affordability period, and
2. any project financed under Home Express must be occupied by low and moderate income households for at least 20 years.

Mortgage Interest Rate

Home Express construction loans shall be provided at a 0% interest rate.

Home Express permanent loans shall be provided at a 1% interest rate compounded annually.

Cash Flow Repayments

Repayment shall occur annually and shall equal 50% of cash flow remaining after the payment of operating expenses, required reserves and amortized mortgage debt.  Upon maturity of the loan or upon expiration of the affordability controls, whichever comes first, the balance of any unpaid principal balance, together with all accrued interest thereon, shall become due and payable. 

Any deferred developer fee may be taken by the developer as return on investment, but only after the applicable Home Express repayment requirements (50% of cash flow) have been met.

The Agency will require the developer  to  submit annual financial statements to document the project’s available cash flow.

Debt Service Coverage Ratio

Projected cash flow repayments of Home Express loans shall not be included when calculating the debt service coverage ratio for multifamily mortgage financing and/or for LIHTCs.   However, in all cases, the maximum mortgage supportable must be obtained before Home Express funding amounts will be determined.

Other Underwriting

Projects funded by Home Express must meet the requirements of the multifamily underwriting guidelines and/or the LIHTC program, as applicable.

Junior Financing and Subordinate Debt

Projects funded by Home Express must meet the requirements of the multifamily underwriting guidelines and/or the LIHTC program, as applicable.

Project Fees

Maximum limitations on the contractor fee and/or the developer fee shall be those placed on the project by the multifamily underwriting guidelines and/or the LIHTC program.  

Nevertheless, Home Express funds shall be reduced to ensure that the non-deferred portion of the developer fee for all projects does not exceed 8% of the total development cost excluding land, working capital, marketing expenses, escrows, operating deficit reserves, step-in-the-shoes costs and costs associated with syndication.

Fees Charged by the Agency

There will be no separate fees charged for the use of Home Express financing.

Tenant Income Requirements

Projects funded by Home Express must meet the requirements of the multifamily bond financing program and/or the LIHTC program, as applicable.

Also note:

A household receiving Section 8 funds shall be eligible for housing under Home Express as long as it meets all program requirements.  In such cases, the combined household rental payment and housing assistance payment exceeding the Agency-restricted rent is acceptable as long as the household rental payment meets Agency requirements and the combined household rental payment and housing assistance payment meets any and all requirements of the U.S. Department of Housing and Urban Development.  In any case, the excess portion of rent collected above the Agency-restricted rent amount must be applied directly to the repayment of the Home Express loan.

Affordability Controls

Any loan agreement entered into for Home Express funds shall incorporate contractual guarantees and procedures to ensure that any unit of housing provided for low and moderate income households shall continue to be occupied by low and moderate income households for at least 20 years.

Municipal Resolution

The developer must obtain a resolution from the municipality in which the project will be located reciting that there is a need for the particular housing project in that municipality.

Energy Efficiencies and Building Design Issues

Projects funded by Home Express must meet the requirements of the multifamily bond financing program and/or the LIHTC program, as applicable.

In addition, every building containing new units funded with Home Express must be provided with an automatic fire suppression system as per Agency requirements.    Such systems shall include the entire building and shall be installed in accordance with the Uniform Construction Code.

Authority to Approve Applications/Regulations

The DCA Commissioner