Resources

Urban Coordinating Council Contact:
Dana Irlbacher
Community Development and Planning
Telephone: (609) 278-7626
Fax: (609) 278-1754

Internet Address: www.state.nj.us/dca/hmfa/

MISSION STATEMENT

New Jersey Housing and Mortgage Finance AgencyThe People We Serve:
The New Jersey Housing and Mortgage Finance Agency (HMFA) programs are designed to help educate citizens and make available homeownership and housing opportunities to New Jersey residents in order to improve their living conditions and other related quality of life issues.

Our Expertise:
New Jersey HMFA responds to the needs of its citizens by implementing creative programs and establishing alliances that:

• fund affordable mortgages for first-time homebuyers;
  
• promote construction and rehabilitation of rental housing;
  
• encourage mixed-income, owner-occupied housing growth as a means to stabilize urban neighborhoods;
  
• advance the economic growth and development of municipalities;
  
• contribute to the quality of life of older adults, the disabled and those with special housing needs;
  
• formulate partnerships to foster the economic development of New Jersey and the personal development of its citizens.

The New Jersey Housing and Mortgage Finance Agency raises program funds by:

• selling taxable and tax-exempt bonds to private sector investors in national financial markets;
  
• applying for and administering federal and state grants and housing assistance programs; and
  
• fostering cooperative relationships with state, municipal, not-for-profit agencies and foundations.

The New Jersey Housing and Mortgage Finance Agency does not rely on any direct funding from the state Treasury to meet its core operating or administrative expenses. The HMFA does rely on favorable federal and state housing legislation to contribute to the vitality of the state's economy and the quality of life of its citizens.

[Programs marked with * are UCC priority programs]

SINGLE FAMILY DIVISION

The HMFA's Single Family Division provides a variety of residential mortgage financing programs. These programs primarily serve low, moderate and middle income first-time home buyers and urban home buyers (who do not have to be first time home buyers). In addition, Single Family administers the Police and Fire Retirement System Mortgage Program and offers a variety of other innovative loan products. Most HMFA homeownership loans are originated by private lenders that are approved to participate in our programs. Single Family also is the HMFA's focal point for construction financing and subsidy provided under the HMFA's Market Oriented Neighborhood Investment Program.

For further information on any of the programs and services provided by the Single Family Division, please call the telephone number listed under the description of each program, or write:

New Jersey Housing and Mortgage Finance Agency
Single Family Division
(include name of program here)
637 South Clinton Avenue
PO Box 18550
Trenton, New Jersey 08650-2085

Requests for brochures or other information can be made by calling 1 (800) NJ-HOUSE or by e-mail.

CONTACT: New Jersey Housing and Mortgage Finance Agency, Single Family Division, (Home Buyers Program), 637 South Clinton Avenue, P.O. Box 18550, Trenton, New Jersey 08650-2085.

HOME BUYERS MORTGAGE PROGRAM
TYPE OF PROGRAM: Home mortgage
PROGRAM DESCRIPTION: A below-market, fixed interest rate is offered to first-time home buyers and urban area buyers. Down payments of as little as three percent are required and must come from the borrower's own assets. Loans are 30-year fixed rate. Certain closing costs can be gifted by family members, non-profit organizations or government agencies. Debt to income ratios are as high as 33 percent (housing debt, i.e., mortgage, taxes, insurance) and up to 38 percent (total monthly debt load). Please see the latest income and purchase price limits.
ELIGIBILITY: First-time home buyers and urban target area buyers.
OTHER INFORMATION: Contact HMFA for latest list of income, purchase price limits and urban target areas.
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

HOME OWNERSHIP FOR PERFORMING EMPLOYEES (HOPE)
TYPE OF PROGRAM: Home mortgage with employer support.
PROGRAM DESCRIPTION: HOPE is an employer guaranteed loan program that offers no downpayment, below-market, fixed rate mortgages to eligible employees without private mortgage insurance. Employers must be approved by the HMFA. The program adheres to the same mortgage program requirements as the Home Buyer Program. Any size company can participate. The employer can establish qualifications in addition to HMFA program restrictions.
ELIGIBILITY: First-time home buyers and urban target area buyers. Limited to employees of participating companies.
OTHER INFORMATION: Contact HMFA for latest list of income and purchase price limits. CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

ONE HUNDRED PERCENT MORTGAGE PROGRAM FOR PURCHASING HOMES IN HMFA APPROVED HOUSING DEVELOPMENTS AND NEW HOMES
TYPE OF PROGRAM: Home mortgage with nothing down
PROGRAM DESCRIPTION: Provides no down payment, no mortgage insurance, mortgage loans at pre-approved new or rehabilitated single-family housing developments and for certain newly constructed units. Downpayment and closing cost assistance may be available under this program. The program is subject to funding and housing availability.
ELIGIBILITY: First-time and urban area buyers are eligible for 30-year fixed rate financing at the HMFA's prevailing interest rate.
OTHER INFORMATION: Please refer to the One Hundred Percent Project List for available projects in your area. Not-for- profit and for-profit developers can apply for project approval. Please see the latest income and purchase price limits.
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

PURCHASE/REHABILITATION MORTGAGE PROGRAM
*[UCC priority program]
TYPE OF PROGRAM: Home mortgage
PROGRAM DESCRIPTION: Qualified first-time home buyers and urban target area buyers can receive below-market interest rate financing for the purchase and rehabilitation of a home, or the rehabilitation of a presently owned home. Seventy-five percent of the home's existing external walls and interior structural framework must remain in place as part of the rehabilitation. Must meet FHA 203(K) requirements. Please see the latest income and purchase price limits.
ELIGIBILITY: First-time home buyers and urban target area buyers.
OTHER INFORMATION: Contact the HMFA fact sheet for current rate and designated neighborhoods and latest list of income and purchase price limits.
CONTACT: 1-800-NJ-HOUSE

MARKET ORIENTED NEIGHBORHOOD INVESTMENT PROGRAM (MONI)
*[UCC priority program]
TYPE OF PROGRAM: Low-, moderate- and market-rate for-sale housing in eligible municipalities.
PROGRAM DESCRIPTION This program provides construction financing for developers of for-sale housing. It also includes access to subsidy pool money (Housing Incentive Fund) and HMFA home buyer mortgage programs. Resale restrictions apply on subsidized units. MONI's purpose is to increase homeownership, stabilize neighborhoods, establish and increase market value and create wealth for homeowners. Please see the latest income and purchase price limits.
ELIGIBILITY: Developers of mixed-income for-sale homes.
CONTACT: 1-800-NJ-HOUSE

HOME-PLUS PROGRAMTYPE OF PROGRAM: Home mortgage with moderate rehabilitation.
PROGRAM DESCRIPTION: A fixed interest rate home mortgage to qualified first-time and urban area home buyers with immediate home improvement needs. Homeowners are allowed to finance up to $15,000 toward home repairs and improvements as part of the first mortgage. Improvements allowed include replacing a roof, painting, installing improved heating or air conditioning systems, renovating a kitchen or bath, renovating plumbing or electrical systems and enlarging rooms. Energy conservation and solar energy improvements are also eligible. Handicap accessibility improvements are also eligible repairs.
ELIGIBILITY: First-time home buyers and urban target area buyers.
OTHER INFORMATION: Contact HMFA for latest income, purchase price limits and urban target areas.
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

MORTGAGE OPPORTUNITY PROGRAM
TYPE OF PROGRAM: Home mortgage
PROGRAM DESCRIPTION: The Mortgage Opportunity Program (MOP) is available to "First Time Home Buyers" who meet certain income guidelines. Buyers purchasing in an "Urban Target Area" need not be "First Time Home Buyers", but may not own another home at closing. Eligible properties include newly constructed, fee-simple, non-condominium housing units in statewide and urban areas.The mortgage loan is offered at the prevailing fixed interest rate for a term of 30 years. Borrowers may finance the full purchase price, as well as closing costs, provided the Loan-to-Value (LTV) does not exceed 100%. Borrowers must have funds to cover escrows required at settlement. These funds cannot be financed. Please see the latest income and purchase price limits.
ELIGIBILITY: First-time home buyers and urban target area buyers.
OTHER INFORMATION: Contact HMFA for latest income and purchase price limits.
CONTACT: See Fact Sheet or call 1-800-NJ-HOUSE

UPSTAIRS-DOWNTOWN MORTGAGES
TYPE OF PROGRAM: Home mortgages and rehabilitation loans for a residential structure with a commercial component.
PROGRAM DESCRIPTION: This program provides FHA-insured as well as private mortgage insurance below market-rate mortgage funds to acquire and rehabilitate or refinance and rehabilitate residential structures with a store-front commercial component. The program objective is to help municipalities and small businesses revive the mercantile and housing potential of main street and neighborhood commercial areas. No income limits apply.
ELIGIBILITY: Owner-occupants and small investors. FHA maximum mortgage amounts and unit size apply.
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

HMFA REVERSE MORTGAGES
TYPE OF PROGRAM: Reverse mortgages for older New Jerseyans.
PROGRAM DESCRIPTION: This FHA-insured reverse mortgage allow seniors (62 and over) to access the equity in their home without a monthly repayment schedule for as long as they live in the home. The program assists older homeowners to access money by using the equity in their homes as collateral. Loan proceeds can be taken in a lump sum, monthly payments, line of credit or some combination of these options. Loan amount is determined by property value and borrower age. Counseling is required. No restriction on value of property. No income requirements or verification. FHA maximum mortgage amounts apply against amount borrowed.
ELIGIBILITY: Limited to home owners 62 years or older. FHA maximum mortgage amounts apply.
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE.

POLICE AND FIREMEN'S RETIREMENT SYSTEM MORTGAGE PROGRAM
TYPE OF PROGRAM: Home mortgage and refinancing mortgages.
PROGRAM DESCRIPTION: Active members of the New Jersey Police and Firemen's Retirement System (PFRS) with one year of creditable service are eligible for this program. Members may buy a home (first-time or trade-up) or refinance an existing home. Maximum mortgage amount is $300,000. Interest rate is 30 year fixed. Program rates are set semi-annually in February and August.
ELIGIBILITY: Active members of the New Jersey Police and Firemen's Retirement System (PFRS).
CONTACT: Further detail is available on our Fact Sheet or call 1-800-NJ-HOUSE

MULTI-FAMILY DIVISION

ELIGIBLE DEVELOPERS

Private developers, municipalities, well established not-for- profit groups such as religious organizations and units, etc. are among those eligible for HMFA financing programs.

ELIGIBLE FINANCING ACTIVITIES
The HMFA encourages imaginative housing proposals. Developers should, however, bear in mind that a housing proposal must meet HMFA standards for the site, neighborhood location, accessibility of services, marketability, design and construction. The proposal must be financially feasible, and comply with applicable local, state and federal requirements.

The primary determinant, with regard to eligibility for HMFA financing, is that the housing have a rental cost which is financially feasible and that is consistent with low- or moderate-income needs. Beyond that, the HMFA will consider a wide variety of proposals whether the units are to be newly-constructed, rehabilitated, modular construction, townhouses, garden apartments or high-rise towers, to name a few categories.

In selecting applications for loans, a priority is given to applications for rental housing loans for the construction, improvement or rehabilitation of housing projects which will be a part of or constructed in connection with an urban redevelopment program. In addition, consideration is given to:

1. the comparative need of the area or residents to be served by the proposed housing project;
   
2. the ability of the applicant to construct, operate, manage and maintain the proposed housing project;
   
3. the existence of zoning or other regulations to protect adequately the proposed housing project against detrimental future uses which could cause undue depreciation in the value of the project;
   
4. the availability of adequate parks, recreational areas, utilities, schools, transportation and parking;
   
5. the availability of adequate, accessible places of employment; and
   
6. where applicable, the eligibility of the applicant to make payments to the municipality in which the housing project is located in lieu of local property taxes.

FINANCING PROGRAMS
The Agency has two types of multifamily housing mortgage loan programs. They are 1) permanent take-out financing and 2) construction loans that convert to permanent financing. HMFA loans are funded through the sale of bonds. These bonds may be either tax- exempt or taxable. The interest income on tax-exempt bonds are exempt from federal income tax. Tax-exempt bonds generally have a lower interest rate and, as a result, the HMFA is able to provide loan financing at below market interest rates.
Projects financed through the sale of tax-exempt bonds must comply with Section 142(d) of the Internal Revenue Code and the applicable U.S. Department of Treasury regulations. These regulations control such things as the low- or moderate-income occupancy requirements as well as the use of the buildings. Furthermore, these bonds are subject to a state-wide volume cap.
Taxable bonds are generally less restrictive; however, they usually have an interest rate of at least 100 basis points.

CREDIT ENHANCEMENT
Applicants seeking mortgages in excess of $15 million may be required to use credit enhancement. Credit enhancement may include bond insurance, surety bonds, collateralized mortgage pass through certificates and letters of credit. HMFA also offers a Risk Sharing Program in conjunction with the U.S. Department of Housing and Urban Development. These guidelines are available upon request.

FEDERAL LOW INCOME TAX CREDITS
As a result of the Tax Reform Act of 1986, a tax credit program was created to encourage the construction or rehabilitation of housing for low-income persons. To qualify for a tax credit allocation from the state's "ceiling allocation", a project must be financially feasible, have a feasible development schedule and meet the federal affordability and low-income targeting requirements. In return for fulfilling these requirements, a developer may be eligible for a federal tax credit of 4% or 9% of the eligible basis. Projects utilizing taxable financing must compete for the allocation of tax credits through the "tax credit ceiling". HMFA generally holds several application rounds per year. Developers are encouraged to consult with a qualified tax attorney or accountant, as well as staff of the HMFA Tax Credit Division, while developing their project. Projects using tax-exempt bond financing may be eligible for tax credits through the use of "volume cap bonds" provided they meet the requirements established in the Qualified Allocation Plan and are in compliance with the IRS code. The code establishes, among other things, that when seeking tax credits for all of the units within a project 50% of the "aggregate" basis, plus the costs of land of the project must be funded with tax-exempt bond proceeds. Developers are encouraged to consult with a qualified tax attorney or accountant to ensure compliance with these rules. Projects requesting tax credits solely from volume cap do not have to compete for tax credits and there are no cycle deadlines. However a complete application must be submitted before the tax-exempt bonds are sold.

EQUAL OPPORTUNITY
HMFA prohibits discrimination because of race, religious principals, color, national origin or ancestry by any housing sponsor, institutional lender, loan originator, or any agent or employee thereof in connection with any housing project or eligible loan being funded directly or indirectly by HMFA. Discrimination is prohibited because of age in admission to, or continuance of occupancy of, any housing project receiving assistance, except for any housing project constructed under a governmental program restricting occupancy of at least 90% of the dwelling units to persons 62 years of age or older and any members of their immediate households or their occupant surviving spouses, or constructed as a retirement subdivision or retirement community as defined in the "Retirement Community Full Disclosure Act," P.L. 1968, c.215 (C.45:A-1 et seq.).

AFFIRMATIVE HOUSING MARKETING PLANS
Each project application must be accompanied with an affirmative housing marketing plan. The affirmative housing marketing plan is designed to attract applications for the housing from all groups in the housing marketing area, including Caucasians, African Americans, Latinos, Orientals, American Indians, and other groups. The marketing plan should include efforts to reach those groups of persons who traditionally would not have been expected to apply for the housing. For instance, for housing in a suburban area primarily occupied by Caucasians, special steps may be needed to make its availability known to minorities, similarly, if the housing is located in an area of minority concentration, special steps may be needed to make its availability known to Caucasians.

HOW TO APPLY
Developer's may call the Multifamily Programs Division at 609-278- 7518 to set up an appointment to discuss their project before submitting an application or they can complete the application included in this processing guide and submit it to the Director of Multifamily Programs along with an application fee. When a developer files a complete application, a Loan Officer is assigned to monitor and assist the development effort.

Table of Contents
The Multi-Family Division provides construction and/or permanent financing for the development of multiple-unit new construction or rehabilitation of rental housing.

For further information on any of the programs and services provided by the Multi-Family Division, please call 609-278-7519 or write:

CONTACT: New Jersey Housing and Mortgage Finance Agency, Multi- Family Division, 637 South Clinton Avenue, P.O. Box 18550, Trenton, New Jersey 08650-2085.