The purpose of the Affordable Housing Trust Fund Program is to provide municipalities, for-profit and non-profit developers with financial assistance to spur the development of affordable housing across the state. These affordable housing developments have the potential to not only provide high-quality, much-needed housing for NJ citizens, but also strengthen neighborhoods and stimulate economic development. The Affordable Housing Trust Fund seeks to support municipalities with court-approved affordable housing settlements in creating much needed housing, build upon existing assets and collaborations through funding projects that leverage other state and local investments, foster public-private partnerships, and support innovation. Funding for the program is generated from a portion of realty transfer fees that is deposited into the NJ Affordable Housing Trust Fund.

The Affordable Housing Trust Fund will provide funding for affordable rental and homeownership projects with no more than 25 units. Financing will be distributed through three pools of funding:

• Municipal Settlement Fund - This fund will help muncipalities create smaller-scale projects that fit into the landscapes of their neighborhoods and assist municipalities in fulfilling their court-approved affordable housing settlements. Applicants may be municipalities or developers supported by the municipality, and municipalities will be required to provide leverage in the form of funding from their own Affordable Housing Trust Funds or, where there is no AHTF, in the form of publicly owned property made available at low or no cost, or some other form of investment.
• Neighborhood Partnerships Fund – This fund will support the development of affordable housing in Qualified Urban Aid towns and will prioritize projects that further community development initiatives through:
  • a) Coordinated state investments from DCA or other state agency projects, such as:
    • Neighborhood Preservation Program (DCA)
    • Neighborhood Revitalization Tax Credit Program (DCA)
    • Main Street Program (DCA)
    • Transit Villages (Department of Transportation)
    • Local Aid and Economic Development (Department of Transportation)
    • Opportunity Zone Challenge Grant (Economic Development Authority)
    • 21st Century Redevelopment Program (Economic Development Authority) Other State agency investments; and
      
      
  • b) Partnerships with private sector investors such as:
    • Community Development Financial Institutions
    • Philanthropic Foundations
    • Anchor institutions such as hospitals
    • Other private partners
      
      
• Innovation Fund – NOT AVAILABLE AT THIS TIME- This fund will provide financing for innovative projects, as well as funds for studies, plans and technical services for municipalities as allowed under the establishing statute for these funds. This fund will prioritize innovative projects that may not fit under the umbrella of the other two funds, such as makerhoods, tiny homes, housing innovations aimed at the Asset Limited, Income Constrained, Employed (ALICE) population, healthy homes, and new technologies. A portion of these funds may also be used for grants to municipalities to create long-term affordable housing plans and for capacity building initiatives, such as the creation of a technical guidance “library” offering case studies and how-to information on the development of new models of housing, changes in redevelopment practices, reducing regulatory barriers that increase construction cost, etc.
  
  The DCA Commissioner has the discretion to alter the amount directed to each fund, or to waive provisions of these guidelines, to reflect the demand for these funds and the State’s priorities.

FY26 AHTF application will be accepted from September 5, 2025 through 5:00 pm on October 3, 2025.

FY26 AHTF RFP Guide

Required Application Document Submission
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FY26 AHTF Proforma- RENTAL

FY26 AHTF Proforma- HOMEOWNERSHIP

Eligible applicants include municipalities, for-profit and non-profit housing sponsors/developers, corporations, and limited partnerships, etc.

Creation of affordable rental housing or homeownership units in developments of 25 units or fewer (targeted to households below 80% of Area Median Income). Eligible activities include acquisition and new construction, reconstruction or rehabilitation of affordable rental or homeownership units. Eligible costs include hard costs, soft costs and developer fees, and funds can also be used to cover a lease-up reserve. Ineligible costs include:

• Project reserve accounts
• Development, operations or modernization of public housing
• Project or tenant-based rental assistance
• Payment of delinquent taxes, fees, fines or charges
• Payment of court-ordered judgments or governmentally imposed fines
• Projects that can be funded from other sources

The maximum subsidy available per project through the Municipal Settlement and Neighborhood Partnership Funds is $3,000,000. Financing will be structured as a soft second amortizing loan at 1% with a term equal to the affordability control period. Annual repayment is 50% of positive cash flow, if available. Developer’s fee will not exceed 8% of the project’s total development cost.

Basic project requirements include:

• All financial sources must have written commitments
• Projects must be financially feasible as determined through DCA underwriting
• Debt coverage ratio must be at least 1.2
• Projects must begin construction within 12 months
• Projects must be completed within two years
• Applicant must be in good standing with the State of New Jersey and the U.S. Department of Housing and Urban Development (HUD)
• Project must provide proof of site control (deed, contract of sale, option agreement, etc.)
• Project must provide original sealed resolution of support from applicant’s board
• Project must provide original sealed municipal resolution of support
• All projects must be permanent housing and housing may not be contingent upon acceptance of supportive services
• Projects must use the NJ Housing Affordability Service (HAS) as their Administrative Agent
• Projects must be affirmatively marketed and be listed with the NJHMFA Housing Resource Center.
• Projects must follow the Uniform Housing Affordability Controls (UHAC)
• Projects participating in the Municipal Settlement Fund must demonstrate investment from the municipal Affordable Housing Trust Fund and/or other municipal investment (donation of land, etc.)

DCA will review and approve applications based on the criteria outlined in the FY26 AHTF RFP.

 Please note , all projects must meet the requirements of the Neighborhood Preservation Balanced Housing Rules N.J.A.C. 5.43-1.1 et seq

• FY26 AHTF application opens September 5, 2025
• FY26 AHTF application closes at 5:00 pm October 3, 2025
• Anticipated award announcements November 7, 2025