N.J. Admin. Code § 5:80-33.2
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Area median income" or "AMI" means the midpoint of a region's income distribution, that is, one-half of the families in a region earn more than the area median income and one-half of the families earn less than the area median income. The area median income is calculated by the U.S. Department of Housing and Urban Development (HUD) for every metropolitan region in the country.
"At risk of losing its affordability controls" means a project with a deed restriction that expires within five years of the date of the new tax credit allocation that is "likely" to convert to market rate (as supported by the market analysis at N.J.A.C. 5:80-33.12(c)1 ii), a project with project-based assistance that expires within five years of the date of the new tax credit allocation, a project that may be condemned, or a project that is subject to foreclosure, unless NJHMFA determines such acquisition is part of an arrangement a purpose of which is to terminate such affordability controls. For multiphase projects, forestalling of a foreclosure by funding of the initial phase shall not preclude latter phases of the same project from qualifying for the set-asides at N.J.A.C. 5:80-33.4(a)1 and 33.5(a)1, provided the latter phases satisfy the remaining elements of the definition of "preservation project" below.
"At risk of losing its level of affordability" means that operating expenses or capital repair needs are so high that, without an award of tax credits, only very high rent increases will keep the project in an acceptable condition and financially feasible. If the current owner or a related party of the current owner retains an ownership interest in the project post-rehabilitation, the owner must demonstrate it did not materially contribute to the decline of the property that created the high operating expenses or capital repair needs.
"Average income set-aside" means an election made by a taxpayer on IRS Form 8609 that requires the income designations of at least 40 percent of the units in a housing project to average 60 percent or less of area median income (AMI). For underwriting purposes, the average of all income designations of tax-credit-eligible tenants shall not exceed 57.5 percent of AMI. Designated income/rent levels for tax-credit-eligible units may only be set at 10-percent increments, ranging from 20 percent of AMI up to 80 percent of AMI, and may not be amended without NJHMFA approval. All Federal minimum set-aside elections are irrevocable.
"Brownfield site" means, pursuant to the Brownfield and Contaminated Site Remediation Act, N.J.S.A. 58:10B-1 et seq., "any former or current commercial or industrial site that is currently vacant or underutilized and on which there has been, or there is suspected to have been, a discharge of a contaminant." As evidence, applicants shall submit a Remedial Action Work Plan or Response Action Outcome (RAO) approved by the New Jersey Department of Environmental Protection (DEP) or its designee (a Licensed Site Remediation Professional or LSRP) or a No Further Action (NFA) letter issued by the DEP within the past 10 years. The NFA shall be for an unrestricted use or, if it is for a limited restricted use, the applicant shall provide confirmation from an LSRP that the proposed development may still be constructed consistent with the limited use.
"Center" means an efficient and compact form of development having one or more mixed-use Cores as well as residential neighborhoods and green spaces. Center designations are based on the area, population, density, and employment of the Center being considered and features of the surrounding areas. Centers can range in scale from very large, an urban center, to the smallest, a hamlet. Centers range in scale in the following order: urban, regional, town, village, and hamlet.
"Certified minority and/or women business enterprise" or "certified M/WBE" means a minority- and/or women-owned business or enterprise that is registered with, and certified by, the Division of Revenue and Enterprise Services, Uniform Certification Service in the State of New Jersey Department of the Treasury. Information on how to register as a certified M/WBE is available at http://www.state.nj.us.treasury/revenue/ucs.shtml.
"Code" means the Internal Revenue Code, 26 U.S.C. §§ 1 et seq.
"Common area" means elements of a property available for use by all tenants.
"Community benefits agreement" means a contract between the developer and the municipality, separate from any redevelopment agreement(s), to provide specific amenities to residents of a particular census tract or tracts. A community benefits agreement must be approved by the municipality's governing body and include elements such as, but not limited to, investments in food desert remediation, green spaces, education, and healthcare for residents.
"Complete application" means an application submitted to NJHMFA that includes the application fee, completed application forms and certifications, and that meets all eligibility requirements as set forth at N.J.A.C. 5:80-33.12.
"Continuum of care" or "CoC" means one of the 16 local planning bodies in New Jersey that coordinate service providers and other interested parties to prevent and end homelessness, as authorized by subtitle C of title IV of the McKinney-Vento Homeless Assistance Act of 1987, 42 U.S.C. §§ 11431-11435.
"Core" means a pedestrian-oriented area of commercial and civic uses serving the surrounding municipality or Center, generally including housing and access to public transportation.
"Core operating expenses" means expenses for administration, salaries, maintenance and repairs, maintenance contracts, and insurance.
"DCA" means the New Jersey Department of Community Affairs, established in the executive branch of State government pursuant to 52:27D-1.
"Density bonus" means an economic benefit for low- and moderate-income housing developers resulting from a zoning change that increases permitted density. The determination of whether a project is the recipient of a density bonus shall be made by the municipality or, in the case of a court-ordered project, the Superior Court judge or special master with jurisdiction over the suit.
"Designated Center" means a Center that has been officially recognized as such by the State Planning Commission. In the Pinelands Area, Designated Center means a Regional Growth Area, Pinelands Village, or Pinelands Town designated by the Pinelands Commission.
"Designated Highlands Center" means a Center that has been officially recognized by the Highlands Council.
"Developer fee" or "development fee" means the fee that encompasses the developer's overhead and profit. Certain fees are subsumed within the developer fee--such as acquisition fees, compensation to the general partner, financial consultants, employees of the developer, construction managers/monitors, clerk of the works, and syndicator-required consultants. Professional fees not paid out of the developer fee are the fees for the architect, engineer, lawyer, accountant, surveyor, appraiser, soil investigator, professional planner, historical consultant, and environmental consultant. (If there are costs listed under the professional planner, the executed contract shall be submitted. Only those costs NJHMFA determines are for planning purposes shall be shown as a separate line item.) All other consultant and professional fees shall be included in the developer fee and are not allowed to be shown as separate line items on the tax credit application; otherwise, those fees shown separately will be added to the developer fee line item.
The developer fee contained in the application shall be the maximum fee (dollar amount) recognized by NJHMFA at the time of cost certification so long as the project scope remains the same.
Any fee paid to the developer in excess of the developer fee, such as an acquisition fee, incentive developer fee, or other pseudonym, shall be treated as a funding source and may not be recognized as a use of funds.
To the extent there is a reasonable expectation of repayment (as evidenced by available cash flow and/or confirmation by the applicant's syndicator/investor or tax attorney), the amount of developer fee allowed for eligible rehabilitation or new construction costs is limited to 15.00 percent of total development cost excluding acquisition (that is, land and building) cost, working capital, marketing expenses, escrows, operating deficit reserves, step-in-the-shoes costs, and costs associated with syndication. However, a developer fee of up to 20.00 percent of total development cost excluding acquisition (that is, land and building) cost, working capital, marketing expenses, escrows, operating deficit reserves, step-in-the-shoes costs, and costs associated with syndication is allowed for the following types of housing:
The non-deferred portion of the developer fee shall not exceed 8.00 percent (13.00 percent for the three types of housing referenced at 1, 2, and 3 above) of total development cost excluding acquisition cost, working capital, marketing expenses, escrows, operating deficit reserves, step-in-the-shoes costs, and costs associated with syndication.
A developer fee of up to 4.00 percent shall be permitted for building acquisition costs, but the non-deferred portion shall not exceed 2.00 percent. The cost of acquiring a building shall not be allowed in the calculation of the developer fee if the acquisition is between related parties. A related party, as used in this definition, means a relationship between parties when there is a spousal or family relationship, parent-subsidiary relationship, or where owners, officers, directors, partners, stockholders, or members of one business entity hold a 10.00 percent or more interest in the other business entity.
"Eligible basis limits" are limitations on total eligible basis (except for projects in the Supportive Housing Cycle or those projects that receive credits from volume cap). A project whose total eligible basis exceeds its applicable eligible basis limit may participate in the tax credit program; however, the maximum amount of credits allowed to the project will be limited to the amount of the eligible basis limit applicable to the project. The eligible basis limit is not a per se limit on eligible basis as defined in the Code but is a mechanism that facilitates NJHMFA's exercise of its authority to limit tax credits to what is necessary to finance projects. See Code Section 42(m). The eligible basis limits are listed in the application and may change as market conditions dictate. For all projects receiving credits from the State housing credit ceiling, NJHMFA shall also limit the eligible basis used for calculating the tax credit in the following manner:
"Equity range" means the range of tax credit pricing that NJHMFA shall utilize in its needs analysis. The equity range is listed in the application and may change as market conditions dictate.
"Hackensack Meadowlands District" means land subject to the jurisdiction of the New Jersey Sports and Exposition Authority (NJSEA) pursuant to the Hackensack Meadowlands Agency Consolidation Act, N.J.S.A. 5:10A-1 et seq.
"Highlands Council" means the Highlands Water Protection and Planning Council established by section 4 of the Highlands Water Protection and Planning Act ("Highlands Act"), 13:20-4.
"Highlands Development Credit Receiving Area" means an area designated by the Highlands Council for the receipt of Highlands Development Credits under the Highlands Transfer of Development Rights Program authorized under section 13 of the Highlands Act, 13:20-13.
"Highlands Redevelopment Area" means a land area designated as such by the Highlands Council that is a brownfield, grayfield, and/or other previously developed area within the Highlands Region that is suitable for development.
"Historic building(s)" means any building or buildings that meet one or more of the following criteria:
"Homeless Management Information System" or "HMIS" means the system used in New Jersey to record and analyze client, service, and housing data for individuals and families who are experiencing homelessness or at risk of experiencing homelessness, as required pursuant to the McKinney-Vento Homeless Assistance Act of 1987.
"HUD" means the United States Department of Housing and Urban Development.
"Individuals and families who are homeless" means any individual or family who does not have stable housing. In addition, depending on the funding sources, individuals coming out of a State psychiatric hospital, transitional living program, halfway house, jail, or a correctional facility with no place to live upon release may be considered homeless.
"Individuals in treatment for substance abuse" means any individual who is a client of programs funded and/or licensed by the New Jersey Department of Human Services, Division of Mental Health and Addiction Services.
"Individuals with developmental disabilities" means any individual with a severe, chronic disability that is attributable to a mental or physical impairment or combination of mental or physical impairments, is manifested before the person attains 22 years of age, and is likely to continue indefinitely. The disability results in substantial functional limitations in three or more of the following areas of major life activity: self-care, receptive and expressive languages, learning, mobility, self-direction, capacity for independent living, and economic sufficiency; and reflects the person's need for a combination and sequence of special, interdisciplinary, or generic care, treatment, or other services that are of lifelong or extended duration and are individually planned and coordinated.
"Individuals with mental illness" means any individual with a mental illness as that term is defined at 30:4-27.2, incorporated herein by reference, as amended and supplemented, and/or any individual with a mental illness eligible for housing or services funded by the Division of Mental Health and Addiction Services in the New Jersey Department of Human Services.
"Individuals with physical disabilities" means any individual who, because of a physical condition, needs affordable housing with supportive services, including assistance with three or more activities of daily living (that is, bathing, dressing, using the toilet, eating, and getting in or out of a bed or chair), to live independently in community settings.
"Individuals with special needs" means:
"Large family unit" means a unit within a non-age-restricted project with three or more bedrooms. For every three bedrooms, there must be at least 1.5 bathrooms. A three-bedroom unit must measure no less than 950 square feet. A four-bedroom unit should measure no less than 1,150 square feet. (Excluded from the calculation are common halls, stairways, unfinished basements and attics, garages, balconies, and porches.) Developments must be structured in conjunction with realistic market demands (that is, if a developer's market analysis does not show a need or demand for all three-bedroom units, the developer should not be developing all three-bedroom units).
"LIHTC project" means a project participating in NJHMFA's Low-Income Housing Tax Credit Program.
"Low-density" means a building having one to four residential floors or stories.
"Minimum rehab project" means any project undertaking only a minimum amount of rehabilitation. Minimum rehab is defined as construction cost totaling less than $ 30,000 per unit. Minimum rehab projects are eligible to apply only in the Supportive Housing Cycle. NJHMFA shall utilize an amount not less than 33.33 percent of developer fee based on building acquisition costs as a funding source in its evaluation required at 26 U.S.C. § 42(m).
"Municipal Revitalization Index" or "MRI" means the Municipal Revitalization Index Distress Score by which New Jersey's municipalities are ranked according to 10 separate indicators that measure diverse aspects of social, economic, physical, and fiscal conditions. Each municipality in the State receives a composite score and ranking, ranging from the most distressed (ranking number 1) to the least distressed (ranking number 564). The MRI is available at https://www.nj.gov/dca/home/MuniRevitIndex.html.
"Neighborhood Revitalization Plan" means a plan, as further defined at N.J.A.C. 5:47-3, for the preservation or revitalization of an eligible neighborhood.
"NJHMFA" means the New Jersey Housing and Mortgage Finance Agency.
"Passive House" is a design standard that achieves thermal comfort with minimal heating and cooling by using insulation, air-tightness, appropriate window and door design, ventilation systems with heat recovery, and the elimination of thermal bridges, resulting in significantly lower-than-average energy usage and utility costs. In order to meet the Passive House standard, a project must be certified as such by either the Passive House Institute U.S. (PHIUS) or the Passive House Institute (PHI).
"Pinelands Commission" means the Pinelands Commission created by section 4 of the Pinelands Protection Act, 13:18A-4.
"Preservation project" means an existing housing project that is at least 50 percent occupied and is at risk of losing its affordability controls or at risk of losing its level of affordability. In order to qualify for the preservation set-aside, the proposal must be for the rehabilitation of at least 75 percent of the affordable units and no new construction of units is permitted. The application shall include the following:
"Public transportation" means any mode of transit available to the general public with fixed fares and daily scheduled service with no seasonal interruption. At a minimum, public transportation shall operate Monday through Friday and provide regularly scheduled service during commuter hours (defined as daily service at least once between 6:30 A.M. to 9:30 A.M. and at least once between 3:00 P.M. to 6:00 P.M.
"Qualified Census Tract," as defined in Section 42(d)(5)(C) of the Code, means a census tract designated by the Secretary of HUD in which 50 percent or more of households have an income less than 60 percent of the area median gross income or in which there exists a poverty rate of 25 percent or greater.
"Qualified nonprofit organization" means, pursuant to Section 42(h)(5)(B) of the Code, an entity that owns an interest in the project (directly or through a partnership) and materially participates (within the meaning of Section 469(h) of the Code) in the development and operation of the project throughout the compliance period and is not affiliated with or controlled by a for-profit organization.
The nonprofit points are available exclusively to Section 501(c)(3) or (4) housing sponsors comprising at least 50 percent of the general partner interest in the final ownership entity (the limited partnership). Limited liability companies and limited liability partnerships are not eligible for the nonprofit points.
In order to qualify for the nonprofit points, the application shall include:
When the project is placed in service, the owner shall be required to provide a written legal opinion attesting that neither the for-profit developer with a financial interest in the project nor any member of the investor limited partner is or has been a member of the qualified nonprofit organization's board of directors.
"Ready to grow area" means an area that has the capacity for growth and has received recognition from the State of this capacity, either through a planning process or through documentation that adequate water supply and wastewater infrastructure are available to serve the project. A project shall be considered to be in a ready to grow area if it is located within at least one of the areas designated at 1 and 2 below by the tax credit application deadline:
"Redevelopment project" means a project fully located within a "redevelopment area" or "area in need of redevelopment" or a "rehabilitation area" or "area in need of rehabilitation," as those four terms are defined in the Local Redevelopment and Housing Law at N.J.S.A. 40A:12A-3, or within the boundary of an approved "neighborhood revitalization plan," as defined in the Neighborhood Revitalization State Tax Credit Act at N.J.S.A. 52:27D-491. No later than the application deadline, the redevelopment plan must be adopted by the municipal governing body or the neighborhood revitalization plan must be approved by the Commissioner of DCA. The project must further the approved plan's goals and objectives.
"Rehabilitation" or "rehab" means the repair, renovation, alteration, or reconstruction of any building or structure.
"Related party" means a relationship between parties when there is a spousal or family relationship, parent-subsidiary relationship, or where owners, officers, directors, partners, stockholders, or members of one business entity hold an interest of 10 percent or more in the other business entity.
"Retention factor" means an increase to the base of the equity range used to calculate the value of the tax credits. NJHMFA will add a retention factor to non-syndicated tax credit projects, or projects where the general partner (and/or related entity) will retain at least a 2.00 percent ownership interest. For projects where the general partner's ownership interest is between 2.01 and 5.00 percent, $.05 shall be added to tine base of tine equity range. If the general partner's ownership interest is 5.01 to 49.99 percent, $ 0.10 shall be added to the base of the equity range. If the general partner's ownership interest is at least 50.00 percent, $ 0.20 shall be added to the base of the equity range.
"Scattered site project" means a project that consists of buildings that are not all proximate to one another, that is financed pursuant to a common financing plan, and in which 100 percent of the residential rental units are rent-restricted within the meaning of section 42(g)(2) of the Code.
"Senior project" means "housing for older persons" as defined at Section 807(b)(2) of the Fair Housing Act, 42 U.S.C. § 3607, as it may be amended. In order to be eligible for the Age-Friendly Senior Cycle, the project must meet one of the three categories of exempt "housing for older persons" as defined by the Fair Housing Act:
The familial status provisions of the Fair Housing Act prohibit discrimination against households with children under 18. This protection extends to pregnant women, foster families, legal guardians, and those in the process of obtaining guardianship of or of adopting minor children. The only exception to this prohibition against discrimination based on familial status is for property that qualifies under a Fair Housing Act exemption as "housing for older persons."
Refusing to rent to households with children is allowed under the exemption for housing for older persons as long as the age restrictions are met. Accordingly, in these properties, managers must verify the age of residents. Age verification documentation must be available on site; failure may lead to a loss of the exemption. For questions about whether a property qualifies for the exemption as housing for older persons, a fair housing attorney or other fair housing professional should be consulted.
"Services for Independent Living (SIL) Program" means a program established at NJHMFA to enhance the quality of life for residents living in NJHMFA-financed senior housing developments.
"Smart growth areas" means areas that promote growth in compact forms and protect the character of existing stable communities. A compact form of development combines an efficient use of land, natural resources, and public services. An area shall be considered to be a smart growth area if it is within Planning Area 1, Planning Area 2, or within a Designated Center on the State Plan Policy Map. In the Pinelands Area, an area shall be considered a smart growth area if it is within a Regional Growth Area, a Pinelands Village, or a Pinelands Town.
For more information on whether a project is located within a smart growth area, visit the site evaluator website at http://njogis-newjersey.opendata.arcgis.com/datasets/dosopa::new-jersey-smartgrowth-areas/explore or contact NJHMFA.
"Social service coordinator" means a person who is responsible for linking the residents of a tax credit property to appropriate supportive services. The major functions of the social service coordinator include, but are not limited to:
"Social services plan" means a description of the scope of social and support services to be provided for supportive housing projects and supportive housing units set aside within family and senior projects, including a staffing plan and how the services will be delivered and funded. The services must be affordable and appropriate to the target population to the satisfaction of NJHMFA, available and accessible to the project's tenants, and the social service provider must have the capacity to perform such services. The social services plan must address the support service needs of the target population(s) and may include a range of services across a wide continuum of care and intensity appropriate to the target population(s). Appropriate and needed services must be supported by evidence-based practice, research, and/or direct practice experience. Each special needs tenant does not have to utilize all of the services provided by the project; however, the services must be available. The social services plan shall address, but is not limited to, the following items:
Social service coordinator, case manager, and linkages coordinator/provider are not counted as separate and distinct services. NJHMFA shall view these services as all being part of the same service.
"Sponsor-based rental assistance" means rental assistance that is provided to a sponsor from the HUD McKinney-Vento Programs or other government sources.
"Sponsor certification" means the certification signed by the developer(s), applicant(s), and general partner(s) submitted at application, reapplication, carryover request, or IRS Form 8609 request that identifies the anticipated or actual date the project is placed in service. The certification shall also include a signed breakdown of costs and basis and a statement whereby the owner agrees to abide by the low-income housing tax credit requirements of the Code and a statement, under penalty of perjury, that the information contained in the certification is true and complete.
"Start construction" means to issue a notice to proceed to a project's contractor, mobilize equipment on the site, and physically commence construction/site work. It is the responsibility of the developer and contractor to ensure that all applicable local and State permits, Federal approvals, inspections, surveys, and/or reports have been received before work has commenced. NJHMFA reserves the right to conduct a site inspection to ensure the timely start of construction.
"State Planning Commission" means the New Jersey State Planning Commission established in the executive branch of State Government pursuant to 52:18A-197.
"Substantially incomplete" means an application with a total of three or more defects as described at N.J.A.C. 5:80-33.11(c)1 and 3 or an application with a total of six or more defects as described at N.J.A.C. 5:80-33.11(c)1, 2, and 3. An application deemed to be substantially incomplete is not eligible for the 48-hour period to cure such defects at N.J.A.C. 5:80-33.11(c).
"Successfully developed and operated" means a tax credit project with no uncorrected HUD Form 8823s that has achieved 93-percent occupancy and has maintained a permanent debt service coverage ratio of at least 1.15 percent for six consecutive months during the project's most recent full fiscal year preceding the application deadline.
"Supportive housing marketing plan" means a marketing plan that contains a list of State-and community-based organizations that serve the target population the sponsor is planning to house, as well as a detailed list of referral sources for tenant applications.
"Supportive housing population needs analysis" means a needs analysis conducted by the applicant and/or social services provider that demonstrates the current and projected need and demand for housing for the targeted population(s). A supportive housing population needs analysis shall address the following:
"Supportive housing project" means a project that shall rent a minimum of 25.00 percent of the total project units to individuals with special needs. At a minimum, a supportive housing project must have a social service coordinator and a social services plan that addresses the needs of the identified special needs population. If a social service coordinator is being provided through a third party, then a signed agreement between the two parties is required and the coordinator must be dedicated to the tax credit project for at least 20 hours per week. Special needs populations include individuals and families who are in need of certain types of homes and/or community-based supportive services, usually on an ongoing basis, in order to remain capable of independent living in communities. Supportive services range across a wide continuum of care (such as meal preparation, assistance with housecleaning, etc.) to high level (such as substance abuse and mental health supports) to medically intense (such as skilled nursing) and will vary from person to person depending on their particular physical, psycho-social, and/or mental limitations, and may vary for one person over time. Each special needs tenant does not have to utilize all of the services provided by the project; however, the services must be available. If tenants are not utilizing the services that are available, NJHMFA may call into question whether the project is serving a special needs population.
Examples of supportive services include, but are not limited to, the following:
"Supportive housing unit" means a unit within a project that is rented to an individual with special needs, with a social service coordinator, a supportive services plan that addresses the needs of the identified special needs population, and the provision of supportive services, just as with supportive housing projects.
"Targeted Urban Municipalities" or "TUMs" means those urban municipalities designated by the following factors: MRI, population, and housing density, relying on the most recent data from the U.S. Census Bureau. NJHMFA shall publish annually a list of the New Jersey municipalities that are designated as TUMs.
"Total development cost" or "total project cost" means the cost to complete the development of a proposed project.
"Transit-oriented development" or "TOD" means a mixed-use development within walking distance (1/2 mile) of a rail, light rail, subway, ferry, or major bus corridor station.
"Transit Village" means a community served by bus, train, light rail, or ferry that has been designated as such by the State's Transit Village Task Force pursuant to criteria available at http://www.state.ni.us/transportation/communitv/villaae/criteria.shtm. The Transit Village Initiative is designed to spur economic development, urban revitalization, and private-sector investment using access to transit as an asset. The New Jersey Department of Transportation coordinates the Task Force composed of various State agencies that review municipal applications and make recommendations. Transit Villages must be designated by the tax credit application deadline.
"Uncorrected noncompliance" means any one of the following that was reported to the owner by NJHMFA. With respect to the point category only, this refers to noncompliance that remains uncorrected as of the date of the tax credit application deadline or the correction date set forth in the formal notice of non-compliance, whichever occurs later:
Owners shall be notified of the noncompliance by either a formal notice of noncompliance or by the non-issuance of the IRS Form 8609.
"Urban transit hub" means a property defined and designated as such by the New Jersey Economic Development Authority pursuant to the Urban Transit Hub Tax Credit Act, 34:1B-207 et seq.
N.J. Admin. Code § 5:80-33.2