Awards to Total $24 Million, With New Incentives for Building Within Opportunity Zones
TRENTON – Guided by new innovative policy, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) plans to award $24 million in highly competitive federal 9 percent Low Income Housing Tax Credits (LIHTC) in 2019, which are expected to create about 1,200 affordable apartments for families, seniors and residents with special needs.
The LIHTC program is the most successful tool in creating affordable housing in the country since its creation in 1986. NJHMFA, which administers the program, currently monitors nearly 600 tax credit developments of more than 50,000 apartments statewide. No direct funding comes from the New Jersey Treasury for the LIHTC program.
“Low Income Housing Tax Credits have been key to our efforts to build affordable housing. This new round of tax credits will further incentivize construction within Opportunity Zones in urban areas to help build a stronger and fairer New Jersey,” said NJHMFA Executive Director Charles A. Richman. “We also are encouraging more mixed-income developments to boost income diversity and further deconcentrate poverty.”
The LIHTC program is a 10-year tax incentive to encourage the development of residential rental apartments at or below 80 percent of area median income. Federal tax credits are awarded to developers to build new rental apartments or rehabilitate existing apartments. Typically, the tax credits are sold to investors who then provide private equity to fund construction. In return, the investors receive a dollar-for-dollar reduction on their federal tax returns for a period of 10 years.
In April, NJHMFA’s Board adopted changes to its Qualified Allocation Plan (QAP), which governs the award of Low Income Housing Tax Credits in New Jersey. In addition to incentivizing mixed-income development and encouraging development in designated Opportunity Zones, the revised QAP will promote the integration of support services to allow seniors to age-in-place, incentivize development in high performing school districts, and encourage the preservation of existing affordable housing stock. The QAP changes, which will be in effect through 2020, are expected to be published in the NJ Register in June.
The application deadline for family, senior, special needs and mixed-income development proposals is September 12 at noon, with awards expected to be announced in December.
To review the application criteria for tax credits, visit www.njhousing.gov/dca/hmfa/developers/uniap
For more information on NJHMFA programs, visit www.njhousing.gov.